The network monitoring company Sandvine clearly shows in a chart that operators have shifted their positions towards large technology companies such as Amazon and Meta (formerly Facebook).
The chart shows the percentage of traffic generated by the six largest Internet companies on the global network. According to Sandvine, during the pandemic, global network traffic from the largest Internet companies has exceeded half.
Importantly, Sandvine Chief Strategy Officer Samir Marwaha reported in a blog post that for the first time in history, the world’s six largest Internet companies will have more traffic in 2021 than all other Internet companies combined.
Marwaha describes it as a “watershed moment” for service providers. After all, the networks they manage now carry more traffic than ever before, but from a dwindling number of digital companies.
No wonder some companies in the telecommunications field have sounded the alarm. As Marvaha pointed out, the 13 largest telecommunications companies in Europe signed an open letter last month calling for regulations to require large Internet companies to provide funds for the networks they use.
The CEOs of companies such as Deutsche Telekom, Telefónica, and Vodafone Group wrote: “Large technology platforms generate and profit a large and growing amount of network traffic, but this requires continuous and intensive network traffic, investment and planning in the telecom industry. Only if such a large-scale technology platform also makes a reasonable contribution to network costs, can this model continue and allow EU citizens to enjoy the fruits of digital transformation.”
This view is now echoing all over the United States. More and more voices are calling for “large technology companies” to inject capital into the Universal Service Fund. The Federal Communications Commission established the USF in 1997 to help fund the construction of broadband networks in rural and unserved areas in the United States, and to help low-income Americans afford telecommunications services. But the main source of funding for USF is the network operators themselves (they often collect cash by charging USF fees to their customers).
FCC Commissioner Brendan Carr believes: “Considering the bandwidth consumed by digital advertising services and the benefits that large technology companies will gain from greater connections, and requiring large technology companies to pay USF] will align the incentives.”
These controversies occurred in the context of the rapid increase in the overall Internet traffic of the telecommunications network. According to a recent detailed study by Recon Analytics, during the pandemic, Internet traffic on the US fiber/copper network was 27.3% higher than normal, while mobile Internet traffic was 22.6% higher than the pre-pandemic level. The cable TV network traffic is 22.1% higher than the pre-pandemic threshold. The global trend is similar.
This growth is clearly the result of COVID-19 lockdown measures, which are forcing people to work from home and go to school. However, Internet providers generally believe that the peak recorded in 2020 has stabilized, and the traffic level has entered a permanently higher level. For example, the network monitoring company OpenVault recently reported that in the third quarter of 2021, the average monthly Internet data consumption of American households reached a staggering 434.9GB, an increase of 13% over the same period in 2020.
Additionally, as Sandvine’s Marwaha explained, the risk for network operators will only increase. He believes that the shift to more critical corporate and industry services will trigger the need for perfect connectivity and optimal performance for manufacturing robots, telemedicine, autonomous driving, public safety and other critical services.