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At the height of the pandemic, when binge-watching television became a universal pastime, one of Europe’s top officials called the CEO and co-founder of Netflix Inc. to downgrade the product.
Internal Market Commissioner Thierry Breton wanted Netflix to reduce video quality to free up bandwidth amid concerns that European networks would be overloaded. Reed Hastings has followed suit, reducing his data output by about 25% in one month.
It didn’t matter that the network showed little sign of congestion or that Netflix had already adjusted the video quality to match the network’s capacity.
Politicians are wary that millions of miles of cables and tens of thousands of antennas under their jurisdiction could be at the mercy of Silicon Valley. Like I’ve been dependent on internet access my whole life to work inside.
The broadband operator suddenly saw a 40% increase in downstream traffic during the pandemic, and the payoff for doubling his upstream traffic went to U.S. tech platforms while they borne the bills. claimed to have been The Stoxx 600 Europe Telecommunications Index has lost a quarter of its value over the past five years, while the NYSE FANG+ Index, which tracks the largest tech stocks, has more than doubled.
So the European Union joined his decade-long debate with local broadband operators. Should big tech intervene in the communications infrastructure they use?
Policy makers are now voicing concerns among network operators that if Europe continues to leave all investment to telecom operators, its digital networks and the companies built on them could fall behind the United States and Asia.
“It’s time to see if the infrastructure that underpins our digital space is properly regulated and organized,” Bretton said in an interview with Bloomberg. One of his questions, he said, had to do with “who should pay for what?”
Tech companies are quick to refute these arguments. They invest in infrastructure. Meta and Alphabet have spent billions building intercontinental underwater cables, adding tens of billions of dollars to the European economy. Netflix installs thousands of server boxes in over 700 EU cities to compress and store videos locally to avoid cluttering the network. To connect more people to the internet and Facebook, Meta CEO Mark Zuckerberg endorses tools and initiatives to accelerate telecom adoption.
A Netflix spokesperson said, “We are working with European ISPs to make our network more efficient. Content does not travel long distances when watching Netflix on a mobile device, which reduces data traffic on broadband networks, reduces costs, and helps provide consumers with a quality experience. “