EU telcos call on web firms to pay up

Robert Clark
09 Dec 2010

Reviving an idea once floated by AT&T, European telcos have called on US internet firms to pay for the cost of extra bandwidth consumed by their services, Bloomberg reports.

The CEOs of France Telecom, Telecom Italia and Telefonica told the Le Web conference Wednesday that companies such as Apple, Facebook and Google should contribute to the network upgrade costs.

The mismatch between investments and revenue “is set to compromise the economic sustainability of the current business model for telecom companies,” Telecom Italia Franco Bernabe said at the Paris conference.

The issue has been simmering in Europe all year, with France Telecom boss Stephane Richard complaining last month that web firms were “flooding networks with no incentive” to cut costs, Bloomberg reported. He called for “a system of payments by service providers as a function of their use.”

Telefonica CEO Cesar Alierta said in February that Google and Yahoo! “use Telefonica’s networks for free, which is good news for them and a tragedy for us.”

Five years ago, the then-AT&T CEO Ed Whitacre made the same “who pays?” complaint. It sparked a fierce debate, but Google and Facebook today pay the same transmission fees US as before.

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