Europe’s Bold Move to Tax Online Traffic Giants Sparks Debates on Environmental Responsibility
Source: Bursa.ro
The European Commission is on the verge of introducing a groundbreaking tax, termed the ‘fair share’ tax, based on the ‘sender pays’ principle. The tax is set to target major online traffic generators such as Netflix and Google, compelling them to contribute financially to the maintenance of telecommunication networks in proportion to the traffic they attract.
The revelation comes from a material published by Euractiv.fr, shedding light on the upcoming document titled ‘Building Europe’s Digital Infrastructure of Tomorrow.’ Scheduled for presentation on Wednesday, February 21, this document will form the basis for consultations with key industry stakeholders to propose a new telecommunications regulation at the EU level.
The proposed tax is part of a broader vision for the future of telecommunications, involving the ‘softwarisation’ and ‘cloudification’ of the telecommunications market. The European Union’s Executive emphasises the need for all actors in the digital network ecosystem to cooperate for the efficient use of resources. Environmental considerations, including carbon footprint, emission transparency, and the ecological impact of video quality, are key aspects highlighted by the EU.
European Commissioner for the Single Market, Thierry Breton, describes the forthcoming regulation as the ‘Digital Networks Act’ (DNA). The proposal has gained support from Laure de la Raudiere, the President of ARCEP (French Regulatory Authority for Telecommunications), and a member of the Body of European Regulators for Electronic Communications (BEREC). In an interview in late January, de la Raudiere expressed agreement with the idea that major technology companies should be financially responsible for their environmental footprint.
According to de la Raudiere, digital giants bear responsibility for the implicit high-definition streaming and automatic caching of videos on social networks like Netflix, Instagram, TikTok, and YouTube. This increase in traffic leads to the acquisition of terminals, contributing to an 80% carbon footprint from digital activities.
The document to be presented by the European Commission focuses on market deregulation, cloudification, infrastructure resilience, and spectrum utilisation, according to sources closely following the drafting process. The Commission has identified approximately 50 mobile operators and over 100 fixed-line operators in the EU, expressing concern about the lack of active European operators at the cross-border level.
While the document does not explicitly suggest deregulation of EU telecommunications legislation, legal expert Innocenzo Genna suggests that the Commission’s proposal aims at a gradual elimination of EU telecommunications laws. The Commission intends to exert pressure on national regulatory authorities not to apply price regulations for fixed network operators, complicating the cross-border integration of telecommunications operators.
The Commission’s proposal emphasises the management and use of spectrum, suggesting coordination in auction calendars and the authorisation of new frequency bands. The convergence of cloud infrastructure and telecommunications services is deemed critical, raising questions about whether actors should be subjected to universally applicable rules.
The Commission’s vision revolves around aligning communication and cloud services with the development of pan-European basic network operators. However, the need for over €200 billion in investments, as calculated by the Commission for companies to rely on autonomous 5G communication services or fiber optic communication, poses uncertainties regarding funding.
Officials express concern about investor reluctance caused by the fragmentation of the European telecom market, raising doubts about whether telecom operators can secure the required funding. The document underscores the importance of an efficient digital infrastructure, acknowledging that the future of communication, including 5G and fiber optic services, depends on the availability of such infrastructure.
Editor: Andreea Gudin
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