Telefónica asks EU to follow South Korean model: make Google, Amazon, Facebook, Apple pay for networks

TelefónicaJosé María Álvarez-Pallete, Executive Chairman of Telefónica

Telefónica continues to lobby, along with the major European operators, for the GAFA (Google, Amazon, Facebook and Apple) to collaborate in investments to expand and improve telecommunications networks.
Telefónica defends the South Korean model, a country with a regulation focused on ensuring that the players that generate the most traffic make a fair contribution to financing telecommunications networks. It is a policy that has led Netflix to file a lawsuit against the country’s operator SK Broadband in relation to network access fees, according to the digital newspaper Voz Populi, which reports an article by Juan Luis Redondo Maíllo, Telefónica’s Director of Digital Public Policy, in which he explains that “South Korea was one of the first countries to realise that the Internet interconnection model of the 1990s has been distorted by the recent emergence of new players. Large traffic originators have created an extraordinary imbalance in traffic exchanges, and this situation was not being reflected in interconnection agreements between operators”.

In 2018, South Korea developed an IP interconnection regulation with a compensatory model, based on the imbalance of the volume of traffic exchanged. The system applies a rule centred on traffic between similar telecommunications operators – the regulation further states who similar operators are. In the event that an operator exceeds these traffic ratios, it will have to make interconnection payments at a regulated price.

The South Korean regulator also decided to define content providers (Google, Amazon, Netflix, Spotify, etc.) as internet users. It established considerable differences between operators and traffic originators, which have a much lower cost structure and do not invest in access networks, the part that costs the most.

He explained that Europe must “react”, pointing out that only six technology companies generate more than 55% of internet traffic on operators’ national networks. The solution proposed by the old continent’s telecommunications corporations involves a commercial agreement between the parties, operators and content or technology companies.


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