Telecom operators push payments from streaming and social media giants
Australia’s biggest telecom operators are pushing the federal government to replicate the news media’s trading code and force global digital giants such as Amazon and Facebook to compensate network owners for pressure from online streaming on their infrastructure.
Singtel Optus, the country’s second-largest telecom operator, has written to the competition regulator asking it to consider a model that ensures popular video game, social media and streaming companies pay telecom operators properly for the large amounts of data used by customers who use their services. .
“It costs Optus and other industry players hundreds of millions of dollars every year to meet capacity demands,” said Optus Vice President of Regulatory Affairs Andrew Sheridan. “Our yields are falling and our income is stagnating. Meanwhile, you have some of the world’s biggest players building highly profitable businesses with our investments.
Optus claims that around 80% of the traffic on its network is generated by gaming and streaming services. Sheridan said some services — such as Netflix — use compression technology to reduce their impact on networks, which has helped, but others don’t do much to help.
Under the suggested measures, services such as Netflix, Amazon Prime Video and Paramount, as well as social media websites such as YouTube and Facebook would be required to pay local telecom operators to compensate for data used when customers use their platforms. Game providers such as Take-Two Interactive (the owner of NBA 2K League and Grant Autoflight) and Activision Blizzard (owner of Call of Duty, Crash Bandicoot and World of Warcraft) would also be required to pay a fee.
The request from the telecommunications sector comes years after the media industry began pushing the government to regulate global tech giants Google and Meta, so they could be paid for the use of their content on the Internet. search engine and in the newsfeed. This decision resulted in the creation of a news media trading code and about $200 million in trade deals for news publishers, including this masthead.
With traffic surging during the coronavirus pandemic, telecom providers say they won’t be able to afford to continue investing in technology if usage costs aren’t shared. In 2020, some media platforms compressed their bitrates – the amount of data per second consumed over a digital network – of their streams.
Telstra said at the time that managing traffic on its networks would have been even more difficult had it not been for the services’ decision to reduce streaming quality. Telstra boss Andy Penn recently slammed the lack of regulation, warning it will hurt customers in the long run. TPG Telecom boss Inaki Berroeta said earlier this month that the streaming, gaming and entertainment market had “counted, thrived and had a free ride”.
“Data-thirsty streaming companies are reaping huge profits and enjoying a free ride on the digital highway our industry spends billions to maintain and upgrade,” a TPG Telecom spokesperson said. “Government and regulators must work with the telecommunications industry to help address the investment imbalance.”