Meta Correctly Calls The EU Plan To Impose A Broadband Tax On ‘Big Tech’ Arbitrary Nonsense

In case you’d missed it, the EU is currently proposing a telecom-industry backed plan to effectively tax Big Tech companies, and throw that money at Big Telecom companies for broadband expansion.

On the surface, the proposal is part of the EU’s efforts to craft digital policies for the next few decades, with an eye on shoring up lagging broadband access.

In reality, the effort is a lobbying gambit by telecom giants looking to offload their network deployment and maintenance costs onto somebody else. All being pushed by EU Internal Market Commissioner Thierry Breton, himself a former CEO of France Telecom.

It’s effectively an extension of the net neutrality wars, in which telecom monopolies insisted they should be paid even more money if you want to access their networks — for no coherent reason.

We’ve repeatedly noted there are several problems with the proposal. One, the whole effort is based on the lie that Big Tech companies “don’t pay their fair share” for broadband (in reality they pay countless billions for bandwidth, cloud storage, CDNs, transit, and even undersea cables). Two, it’s being driven by telecom monopolies with long, rich histories of bullshit on this subject (not to mention subsidy fraud).

It’s effectively yet another effort by the telecom lobby to “double dip,” dressed up as a serious, adult policy proposal. But throwing billions of dollars at telecom monopolies (without reforming existing broadband subsidy programs) in the hopes that this just magically fixes the digital divide this time is a fool’s errand. Yet here we are, having learned nothing from decades of policy experience.

Both Google and Netflix have come out swinging against the EU’s Big Tech tax, pointing out how the claim they “don’t pay their fair share” and should be directly responsible for paying to bridge the digital divide is telecom industry nonsense.

And now Meta’s Kevin Salvadori, VP of Network, and Bruno Cendon Martin, Senior Director of Wireless Technologies, have issued a blog post also pointing out that Facebook has spent more than $100 billion of capital expenditures and operational expenditures on global digital infrastructure:

proposals by some European telecom operators to impose network fees on Content Application Providers (CAPs) such as Meta are not the solution. Network fee proposals are built on a false premise because they do not recognise the value that CAPs create for the digital ecosystem, nor the investments we make in the infrastructure that underpins it.

Facebook/Meta has no shortage of dumb problems (including clumsy and sometimes predatory missteps on efforts to shore up global broadband access), but they’re correct here.

While broadband subsidy programs in the U.S. and EU do need shoring up, that shouldn’t necessarily be the job of Big Tech companies. Especially given that, in both the EU and U.S., telecom monopolies have routinely driven up the cost of essential broadband access for everyone through regulatory capture and relentless attacks on disruptive competition.

When it comes to telecom monopolies, nobody gets a “free ride.”

Some groups have warned that the EU’s telecom industry’s plan to tax Big Tech giants would simply drive up online costs for consumers, given Big Tech companies would just pass these added costs on to users already paying an arm and a leg for bandwidth. Some groups have warned the internet could also become less stable as online companies try to reroute their traffic around such fees.

And in South Korea, where telecoms convinced regulators to implement a similar tax on Big Tech companies, ISPs have taken to suing Netflix simply because Squid Game was popular with consumers and that resulted in a bandwidth consumption spike.

Content companies and consumers already pay an arm and a leg for bandwidth due to corruption, regulatory capture, and monopolization. It’s the telecoms’ responsibility to use that money — in addition to the billions in taxpayer subsidies they already get — to ensure their networks are ready for customer bandwidth demands. Suggesting it’s Netflix’s fault because you weren’t prepared is preposterous.

Again, if policymakers were serious about bridging the digital divide, they’d embrace policies that take aim at concentrated telecom monopoly power. They’d reform telecom subsidy programs that, for decades, have thrown billions of unaccountable dollars at these monopolies in exchange for networks that are always only half completed. And they’d more seriously police fraud by major telecoms.

Forcing tech giants to pay telecom giants billions of dollars for no coherent reason isn’t actually a solution for the digital divide, but telecom lobbyists have convinced many captured regulators otherwise. And if the push in the EU is successful, you can be absolutely assured it will see a renewed push in the U.S. by the likes of AT&T and Comcast, with captured regulators like the FCC’s Brendan Carr at the fore.