European Union regulators have set their sights on major streaming services, as regulators look at ways to fund 5G and fibre infrastructure across Europe. Telco companies have long been heavily regulated in order to cover this infrastructure. Now, though, the focus is shifting to streaming and tech companies leveraging these networks.
Historically, telcos have been responsible for the implementation and management of internet infrastructure. The rationale was that telcos profited the most from this technology. However, as the internet has become more capable of handling heavier data usage, tech and streaming companies have looked to leverage this infrastructure.
This move has been revealed within a draft document, as part of the “fair-share” vision. The objective of this seeks to make data-heavy and high internet-usage companies help pay for the traffic they generate. The draft claims that “Metaverses and virtual worlds, the rapid move towards cloud, the use of innovative technologies online are making it more evident that more needs to be done to protect investment in network infrastructure.”
It’s a logical move by regulators as it is these streaming and tech companies that are putting a lot of strain on the internet. Telcos will likely see some alleviation of financial implications, which could see internet costs across Europe begin to drop. However, this will not be good news for streaming services, but also for consumers.
With stagnant or declining audience growth and the high costs of making original content, profitability is already under threat for streaming services. The potential increased operational costs across the EU, if passed, will likely be something that streaming services look to pass along to consumers. Increased subscription fees could have an impact on subscriber retention, as people assess the value exchange of maintaining their memberships with the content produced.
This move appears to be futureproofed for any technological evolutions. While recent reports have highlighted the fall of the metaverse, the potential drain on internet usage still needs to be considered. If the metaverse does not eventuate, this move would set up regulators to charge any companies in the future that develop alternative solutions.