Caribbean telecoms operators to meet with Big Tech to push for compensation

Caribbean telecommunications operators will hold a second meeting with Big Tech operators – Meta, Google and Netflix – where they will address the impact Big Tech has on the Caribbean telecommunications industry and the need for these companies to contribute financially to regional telecoms network infrastructure.

The Caribbean Telecommunications Union (CTU) will host the meeting at the Sheraton Miami Airport Hotel and Executive Meeting Centre on Friday. This meeting comes on the heels of the first meeting, held on February 17.

That meeting's focus was on three work streams: business/financial/commercial, technical and regulatory. The first stream will analyse the economics of data delivery in the Caribbean Basin; the second will seek co-operative approaches to content delivery; and the third will consider regulatory issues.

A release from C6 Working Group members – Telecommunications Services of TT (TSTT), Digicel Group, Cable and Wireless Communications, Tele SUR, Guyana Telephone and Telegraph Co Ltd (GTT) and Cable Bahamas – said regional operators face a significant financial burdern associated with over-the-top media service (OTT) driven costs.

It said Meta (Facebook, Instagram and WhatsApp), Alphabet (Google), TikTok, Netflix, Amazon and Microsoft are responsible for 67 per cent of the total internet traffic in the Caribbean, but despite this, Big Tech providers make no contribution or investment to local delivery networks.

"That market failure is taking place against a backdrop of stalled revenues for telecommunications, with limited prospects for future growth. By contrast, OTT providers’ revenues grew by over 150 per cent between 2017 and 2021. The rationale behind Big Tech operators paying their fair share is to address this market failure, ensure a level playing field, and promote the sustainability of telecommunications infrastructure which benefits the region’s citizens," said the release.

Caribbean telecommunications operators, working together as the Canto Working Group on Fair Share (C6 Operators) thanked the CTU for its leadership in this area and welcomed the discussion with global technology companies to accelerate the growth of future-proofed digital economies in the Caribbean region.

Chair of the C6 Working Group and TSTT CEO Lisa Agard said, “The C6 Group of Caribbean network operators welcomes and endorses this CTU initiative and calls on all interested parties, network providers, Big Tech players, and regional policy makers and regulators to participate fully and in good faith in this process. This is about the future sustainability of the sector and the realisation of critical connectivity goals for the entire region.”

These meetings are being held as a result of a recent report commissioned on the issue that showed OTT-driven traffic generates annual costs of between US$232 million and US$332 million for Caribbean network operators.

These could represent 45-65 per cent of the annual investment incurred by Caribbean network operators and seven-ten per cent of their retail revenues. The report also noted that OTT-driven annual costs are estimated at between US$34 million and US$73 million in Jamaica and between US$16 million and US$39 million in TT.

The release also said the only way network integrity is maintained is by individual users and businesses who bear the cost through data plans and subscriptions. The report also noted the growth in data traffic has forced network operators in the Caribbean to invest over US$500 million a year in network infrastructure and that an indicative contribution of US$250 million per year by OTTs would produce a significant impact on a series of key socioeconomic and environmental indicators and address the current market failure.

It said global discussions on this issue are regaining momentum, with the European Union supporting a fair-share resolution in June. In 2022, European Commissioners and policymakers announced the intention to have OTTs make fair contributions to telecom networks. South Korea has already proposed legislation to ensure global content providers such as Netflix and Alphabet's Google pay South Korean network fees.