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EU's Breton cites telcos' investment gap for Big Tech network fee push

FILE PHOTO: EU Internal Market and Industry Commissioner Breton speaks at a news conference in Brussels

By Foo Yun Chee

BRUSSELS (Reuters) - Europe is falling behind other regions and needs to invest massively in its telecoms network to achieve its digital goals, EU industry chief Thierry Breton said on Tuesday as he defended a push to get Big Tech to help fund the rollout of broadband and 5G.

Breton's comments put him at odds with the EU telecoms regulators' body which said last month it did not see a competition problem or market failure to warrant any legislation on this issue.

"The market capitalization of the EU telcos consistently falls behind that of the United States. It is better to be a telco in the U.S. than in Europe," Breton told a conference.

"In terms of 5G deployment, the EU lags behind other regions of the world. Just for some figures, 5G population coverage is 95% in the U.S. versus 72% in the EU. Adjusted for GDP, 5G investment in the EU is lower than in other regions of the world," he said.

He said Europe also needs to invest in edge cloud computing, artificial intelligence and network virtualisation.

"We have no time to lose and this is why it starts first with the infrastructure. Is our infrastructure, telecommunications in network and connectivity fit for purpose to match our digital data? My answer today is no," Breton said.

He dismissed fears that requiring some users to pay more than others would breach EU net neutrality rules which say all users should be treated equally.

"We will not touch net neutrality. It is not a question of changing net neutrality. This is embedded in our values and our Digital Decade, so please stop saying this," Breton.

Breton, who has sought feedback from all interested parties on the subject, said he has received 437 submissions. He is expected to issue a report by the end of June which will indicate his next steps.

Any legislative proposal needs to be thrashed out with EU countries and EU lawmakers before it can become law.

The issue pits Deutsche Telekom, Orange, Telefonica and Telecom Italia against Alphabet's Google, Apple, Meta Platforms, Netflix, Amazon and Microsoft.

(Reporting by Foo Yun Chee; Editing by Richard Chang)