Above: C6 Working Group Chair Lisa Agard.

Caribbean telecommunications operators will participate in a critical meeting in Miami on June 23rd in their ongoing quest to have Big Tech companies contribute financially to regional telecoms network infrastructure. This is the second meeting where these operators will address the impact that companies like Meta, Google and Netflix continue to have on the Caribbean telecommunications industry. The Caribbean Telecommunications Union (CTU) will host the meeting at the Sheraton Miami Airport Hotel & Executive Meeting Centre.

Regional operators face a significant financial burden associated with OTT driven costs. Meta (Facebook, Instagram and WhatsApp), Alphabet (Google), TikTok, Netflix, Amazon and Microsoft are responsible for 67% of the total internet traffic in the Caribbean. Despite this, the Big Tech/OTT providers make no contribution or investment to local delivery networks. That market failure is taking place against a backdrop of stalled revenues for telcos, with limited prospects for future growth. By contrast, OTT providers’ revenues grew by over 150% between 2017 and 2021.

The rationale behind OTTs/Big Tech paying their fair share is to address this market failure, ensure a level playing field, and promote the sustainability of telecommunications infrastructure which benefit the region’s citizens.

Caribbean telecommunications operators, working together as the CANTO WORKING GROUP ON FAIR SHARE (the C6 Operators), thank the CTU for its leadership in this arena and warmly welcome 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 Chief Executive Officer Ms Lisa Agard said, “The C6 Group of Caribbean network operators welcomes and endorses this CTU initiative and calls on all interested parties, network providers, OTT/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.”

This second meeting will advance the discussion on recommendations developed in the first meeting on February 17th 2023, focusing 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 cooperative approaches to content delivery, and the third will consider regulatory issues.

Background

According to a recent report commissioned on this issue, OTT-driven traffic generates annual costs between US$232 and US$332 million for Caribbean network operators. These could represent 45-65% of the annual investment incurred by Caribbean network operators and 7-10% of their retail revenues.’ The report also noted that ‘OTT-driven annual costs are estimated at between US$34 and US$73 million in Jamaica and between US$16 and US$39 million in Trinidad and Tobago.’ The only way in which 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.’

Global discussions on this issue are regaining momentum, with the European Union supporting a “fair share” resolution in June 2023. 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.

C6 Working Group Members

Telecommunications Services of Trinidad and Tobago (TSTT)

Digicel Group

Cable & Wireless Communications

Tele SUR

Guyana Telephone and Telegraph Company Ltd (GTT)

Cable Bahamas