Just days after the European Commission and Europe’s leading telcos warned global tech giants that they could be forced to pay a share in developing the region’s next-generation networks, Netflix co-CEO Greg Peters has defended the role companies like his plays, claiming that content drives people to pay for better broadband services.
In a keynote speech just after the world’s leading mobile trade show MWC opened its doors, European Commission internal market commissioner Thierry Breton joined Telefónica chairman and CEO José María Álvarez-Pallete to look at how the shift in innovation enabled by artificial intelligence, 5G and augmented reality has set the industry on a new trajectory – one that is both immersive and inclusive.
In his address Breton welcomed the new world and the prospects for Europe, but warned that despite the massive advances being made in the European communications sector, the region’s current networks were not fully prepared for the anticipated massive traffic growth due to the massive uptick in applications such as streaming video and immersive experiences.
The speech came days after the EC outlined a raft of proposals including regulation designed to put forward new rules to enable a faster, cheaper and more-effective roll-out of gigabit networks across the European Union (EU). The new regulations consist of a proposal for a Gigabit Infrastructure Act, and a draft Gigabit Recommendation, which seeks to provide guidance to National Regulatory Authorities on the conditions of access to telecom networks of operators with significant market power, to incentivise faster switch-off of legacy technologies and accelerated gigabit networks deployment.
At MWC, Breton hinted very clearly that the funding required to build out these generation mobile and fixed should involve all actors within the ecosystem, in particular the tech giants such as Google, Meta and Netflix whose services were the primary drivers of this massive growth. Álvarez-Pallete deployed the phrase “fair shares” when came to who would pay for tomorrow’s infrastructures, namely not just the telcos and infrastructure providers.
Yet in his keynote, Peters struck back noting that growing demand for the internet does not cause growing traffic costs. He said that there was a very clear and correct symbiotic relationship between a thriving creative industry and a thriving Internet ecosystem and that ws due to people wanting to watch great films and TV shows and that they were willing to pay for high quality internet service to enjoy the content that they love.
Addressing the investment issue outlined at MWC he said: “I know there are some here today that are concerned that this consumer demand leads to unsustainable internet traffic growth. These concerns are not new. I remember being here in Europe about 10 years ago talking to our partners and talking to regulators about the same conversation, the same concern but the last decade has shown and telco leaders have recently affirmed that growing internet usage is actually a huge opportunity. It reflects the growing demand for the services that we all provide together. Of course increasing usage requires investment. For our part, Netflix has invested over $60 billion in content over the last five years. That's equivalent to roughly 50% of all of our revenue in that timeframe. That is the part that we play in creating this virtual slightly better, more varied content, leading to more people willing to pay for better broadband services.”
Peters added that as broadcasters shift from linear to streaming, Netflix wanted a system that encourages more investment in hits, whether those hits come from Netflix or the BBC, Disney+ or Viaplay. “Some of our ISP partners have proposed taxing entertainment companies to subsidise their network infrastructure. But as Commissioner Breton said yesterday, and as I very much believe, it shouldn't be a binary choice between big telco or entertainment companies. This is because a tax like that would have a significant adverse effect. It would reduce investment content, which hurts local creative communities. It hurts the attractiveness of high priced broadband packages, and ultimately, it hurts consumers."
In his address Breton welcomed the new world and the prospects for Europe, but warned that despite the massive advances being made in the European communications sector, the region’s current networks were not fully prepared for the anticipated massive traffic growth due to the massive uptick in applications such as streaming video and immersive experiences.
The speech came days after the EC outlined a raft of proposals including regulation designed to put forward new rules to enable a faster, cheaper and more-effective roll-out of gigabit networks across the European Union (EU). The new regulations consist of a proposal for a Gigabit Infrastructure Act, and a draft Gigabit Recommendation, which seeks to provide guidance to National Regulatory Authorities on the conditions of access to telecom networks of operators with significant market power, to incentivise faster switch-off of legacy technologies and accelerated gigabit networks deployment.
At MWC, Breton hinted very clearly that the funding required to build out these generation mobile and fixed should involve all actors within the ecosystem, in particular the tech giants such as Google, Meta and Netflix whose services were the primary drivers of this massive growth. Álvarez-Pallete deployed the phrase “fair shares” when came to who would pay for tomorrow’s infrastructures, namely not just the telcos and infrastructure providers.
Yet in his keynote, Peters struck back noting that growing demand for the internet does not cause growing traffic costs. He said that there was a very clear and correct symbiotic relationship between a thriving creative industry and a thriving Internet ecosystem and that ws due to people wanting to watch great films and TV shows and that they were willing to pay for high quality internet service to enjoy the content that they love.
Addressing the investment issue outlined at MWC he said: “I know there are some here today that are concerned that this consumer demand leads to unsustainable internet traffic growth. These concerns are not new. I remember being here in Europe about 10 years ago talking to our partners and talking to regulators about the same conversation, the same concern but the last decade has shown and telco leaders have recently affirmed that growing internet usage is actually a huge opportunity. It reflects the growing demand for the services that we all provide together. Of course increasing usage requires investment. For our part, Netflix has invested over $60 billion in content over the last five years. That's equivalent to roughly 50% of all of our revenue in that timeframe. That is the part that we play in creating this virtual slightly better, more varied content, leading to more people willing to pay for better broadband services.”
Peters added that as broadcasters shift from linear to streaming, Netflix wanted a system that encourages more investment in hits, whether those hits come from Netflix or the BBC, Disney+ or Viaplay. “Some of our ISP partners have proposed taxing entertainment companies to subsidise their network infrastructure. But as Commissioner Breton said yesterday, and as I very much believe, it shouldn't be a binary choice between big telco or entertainment companies. This is because a tax like that would have a significant adverse effect. It would reduce investment content, which hurts local creative communities. It hurts the attractiveness of high priced broadband packages, and ultimately, it hurts consumers."
