Google Should Pay for Network Usage, France Says
French Industry Minister Eric Besson
Lionel Bonaventure/AFP/Getty Images
French Industry Minister Eric Besson.
French Industry Minister Eric Besson. Photographer: Lionel Bonaventure/AFP/Getty Images
Google Inc. and other providers of Web content aren’t contributing enough to the costs of telecommunications networks and may be forced to pay, the French minister responsible for the Internet said.
The French government plans to convene a working group including Internet companies with “the objective that services that occupy the largest part of our networks contribute to the deployment and maintenance of those networks,” Industry Minister Eric Besson told reporters in Paris today.
The minister’s comments back up complaints from some of Europe’s largest telecom operators, who are investing in networks to cope with the growth of services like Google’s YouTube. France Telecom Chief Executive Officer Stephane Richard, Telefonica SA CEO Cesar Alierta and Telecom Italia SpA CEO Franco Bernabe have said that Internet companies are getting an unfair deal from their networks.
“These companies are based in foreign countries, don’t pay any tax in France, and occupy at the same time very dominant positions in the French market,” Besson said. “The digital economy is developing thanks to the investments of operators.”
Bill Echikson, a Brussels-based spokesman for Mountain View, California-based Google, didn’t immediately return a telephone call seeking comment.
Net Neutrality
A related debate, over whether telecommunications operators can interfere with subscribers’ Web service to manage the flow of data, is currently playing out in the U.S. The Federal Communications Commission is set to vote today on so-called net neutrality rules.
France last week delayed the implementation of a small tax on online advertising revenue to allow more time for discussion with operators.
While the number of mobile data connections in western Europe will rise by an average of 15 percent a year to 270 million in 2014, overall end-user revenue will fall about 1 percent a year, researcher IDC estimates. Operators’ annual spending on network gear in the period will surge 28 percent from last year to about $3.7 billion, according to researcher Canalys.
As network spending climbs, operators are looking for ways to win new revenue from data-hogging customers as well as content providers. Vodafone Group Plc and France Telecom have announced plans to shift to tiered pricing based on data use, following a similar move away from unlimited-data plans by AT&T Inc., the largest U.S. phone company.
‘Severe Ramifications’
Tensions between Web companies and operators are “a huge issue, which has potentially severe ramifications,” said Paolo Pescatore, a telecommunications analyst at CCS Insight in London. “Other countries will be watching France very carefully, and much will depend on how effective the operators’ lobbying is.”
With hundreds of thousands of workers, European telecom operators such as Madrid-based Telefonica and Deutsche Telekom AG are among their countries’ biggest employers. California- based companies such as Google, Apple Inc., and Facebook Inc. have relatively small operations in Europe.
French regulators and cultural groups have clashed with Google over copyright, privacy and artist compensation. This year, the owner of the world’s largest search engine signed accords with French artistic collection agencies and pledged to build a research-and-development center in Paris.
To contact the reporters on this story: Matthew Campbell in Paris at mcampbell39@bloomberg.net.
To contact the editor responsible for this story: Vidya Root in Paris at vroot@bloomberg.net;
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