The European Commission’s move to make traffic intensive online platforms to contribute to the cost of digital infrastructure will include the rise in data volumes used by the metaverse and virtual platforms.
This initiative seeks to address a long-standing grievance by telecom operators in the EU who have accused online platforms of using large amounts of data but without investing towards cost of that capacity.
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A letter seen by EURACTIV signed by European Commission president Ursula von der Leyen dated Dec. 22, 2022, says there will be consultations and discussions on the matter this year.
“The metaverse and virtual worlds, the rapid move towards cloud, the use of innovative technologies online are making this even more evident,” von der Leyen said in his letter.
“We intend to launch a thorough discussion on the future of Europe’s connectivity through a consultation to be launched in early 2023. The amount of data harvested and exchanged and harvested is larger than ever and will increase,” added von der Leyen.
Virtual worlds, metaverse a strain?
Von der Leyen’s letter is a response to Renew MEP Valerie Hayer, who in September last year coordinated another letter endorsing the so called ‘fair share’ initiative calling for quick progress.
Also known as sender-pays principle, ‘fair share’ is based on the argument by EU telecoms operators that online platforms like Netflix and Google do not sufficiently contribute to network costs while reaping most of the benefits of the digital economy.
In May last year, internal market commissioner Thierry Breton announced that the executive would present a proposal before the end of the year that would force platforms to pay a “fair contribution” to developing digital infrastructure such as 5G network.
In another submission later in September, Breton emphasized that virtual worlds put intense pressure on connectivity infrastructure which is needed to allow for developments towards vast digitalization to happen.
“In Europe, all market players benefiting from digital transformation should make fair and proportionate contribution to public goods, services and infrastructures, for the benefit of all Europeans,” he said.
“We will launch a comprehensive reflection and consultation on the vision and business model of infrastructure that we need to carry the volumes of data and the instant and continuous interactions which will happen in the metaverse.
“We are ready to roll out our European ambition,” Breton said.
‘Fair share’ not fair
Chief executive officers of Telefonica, Deutsche Telekom, Vodafone and Orange have called on the Commission in an open letter to make large content providers to contribute to infrastructure investments.
According to a study by the European Telecommunications Network Operators’ Association (ETNO), a small number of internet companies formed by Alphabet, Apple, Meta, Microsoft and Netflix count for more than 56% of the world’s data traffic.
Another study sponsored by telecom companies estimates that such platforms might generate costs ranging between €36 billion to €40 billion per year for telecom companies.
EURACTIV has reported the tech giants have not remained silent. A study published in 2018 showed that online service providers have been increasingly contributing to internet infrastructure such as hyper-scale data centers.
According to the report, Google and Facebook have been increasingly deploying submarine cables as telecom operators could not keep up with the explosion in the global data demand the two companies contributed to creating.
The online platforms have also said they contribute to creating demand for telecom services, for which consumers effectively pay for.
Charging them would equal nothing short of double-dipping, the argument goes.