Berlin/Brussels, October 14, 2022 The German Broadband Association (BREKO) today published a position paper on the “fair share” debate gaining momentum in Germany, in which major European telecommunications companies such as Telekom, Orange, Vodafone and Telefónica (“big telcos”) are calling for big tech companies to share the costs of network expansion. In the view of BREKO, which represents the majority of alternative telecommunications network operators in Germany, the debate on the fair participation of big tech companies in network costs must be conducted in a constructive and open-ended manner with the involvement of alternative network operators as drivers of fiber optic expansion in Germany and many European countries. “Fair share” contributions can further strengthen the existing expansion momentum and contribute to the security and sustainability of the networks. However, it is crucial that they are implemented by the EU Commission in a way that ensures fair competition in the telecommunications market.

In the digital ecosystem, telecommunications companies and big tech companies are symbiotically linked and dependent on each other. High-performance fiber optic networks ensure the stable transmission of content. At the same time, high-quality content ensures that high-performance connections are booked by consumers. As with any ecosystem, a good balance and burden sharing is essential for its success. BREKO is therefore generally in favor of “both sides” contributing to the network costs, but not at any price.

If the EU Commission is considering a cost contribution from big tech companies such as Google, Meta or Netflix, the specific structure must not lead to a situation where only big telcos benefit from this, thereby distorting functioning competition in the telecommunications market. This danger exists because the large telecommunications companies are campaigning for the EU Commission to issue “negotiating mandates” to network operators and big tech companies in order to agree the amount and specific conditions of the payments individually. BREKO rejects such a negotiation solution because it puts the vast majority of telecommunications companies at a disadvantage.

Instead, BREKO is calling for a solution that ensures that all companies investing in fiber optic networks receive a proportionally equal share. BREKO Managing Director Dr. Stephan Albers: “‘Fair share’ for us does not only mean a fair participation of the largest tech companies in the network costs. Rather, the EU Commission must develop a model that ensures the fair distribution of contributions among all companies involved in the expansion. There must be no solution that unilaterally favors the big telcos over all other telecommunications companies. Instead of a negotiated solution, for example, a solution via an infrastructure fund could lead to a fair distribution.”

Alternative network operators shape the future of digital infrastructure

High-performance and future-proof fiber optic networks right into buildings and homes provide the basis for the digital life of the present and future. In particular, the regional, decentralized networks of alternative network operators play a fundamental role in network resilience and cyber security. Alternative network operators implement the majority of fiber optic connections in Germany: With a share of 70%, they are the drivers of fiber optic expansion according to the recently published BREKO market analysis. Alternative network operators also dominate investments in digital infrastructure: their investments of EUR 6.5 billion correspond to 59% of the total investment volume in Germany.

Against this backdrop, it is particularly relevant to actively involve the alternative network operators as key players in the fiber optic roll-out in Germany and many European countries in the debate on fair cost sharing by internet companies and to take their position into account. Sven Knapp, Head of BREKO’s Capital Office, commented: “It is essential to consider the position of alternative network operators as drivers of fiber optic expansion in this debate in order to continue to ensure fair competition in the telecommunications market. We therefore welcome the EU Commission’s plans to launch a consultation on this topic in the near future and to involve all relevant stakeholders in the discussion.”

In order to maintain the market balance and to ensure fair conditions and efficient implementation, BREKO is also calling for the next steps to be linked to conditions. These are

Open and transparent consultation: An open consultation and analysis at EU level is essential for the further discussion regarding the required “fair share” contributions and the development of possible solutions to resolve the imbalances in the digital ecosystem between network operators and big tech companies.
Equal treatment of players: To ensure fair competition, large telecommunications companies must not exploit their negotiating power to conclude individual agreements with big tech companies. Since the liberalization of the telecommunications markets, the EU Commission has been committed to ensuring that all market players have the same rights and opportunities – in BREKO’s view, this must be maintained at all costs. “Fair share” contributions may only be implemented if alternative network operators can also participate on equal terms.
Earmarking of use: It is important that “fair share” payments are used for network costs in connection with real fiber optic connections to buildings and homes (FTTB/H), as only these future-proof infrastructures contribute to achieving the digital and environmental policy goals of the EU and Germany.
Safeguarding net neutrality: BREKO is certain that a “fair share” regulation must not compromise net neutrality and the EU’s Open Internet guidelines. Net neutrality is a central basic principle of the free internet that must be upheld.

More on the demands in the BREKO position paper on the participation of big tech companies in the costs of network expansion (“fair share”)