"The Bloodsucking Giants of Silicon Valley Must Pay Up"
A provocative and controversial argument is emerging: streaming entertainment giants like Netflix must pay to play in South Africa. And the notion is gaining traction among telecoms operators who are fed up with carrying the bulk of the costs for delivering their content to the masses.
Petrus Potgieter, a professor at Unisa and associated partner at telecoms consultancy Strand Consult, is leading the charge. "It’s only fair that they contribute to ensuring a sustainable, equitable investment in infrastructure," he says. "They’re making a killing off our networks, and it’s time they started paying their fair share."
The argument is not new, but it’s gaining momentum as telecoms operators face mounting pressure to roll out broadband services to rural areas and smaller towns. Potgieter points out that content providers like Netflix have high fixed costs, but they’re not nearly as heavily regulated as telecoms operators. They also enjoy the immense protection of copyright, which means they can dictate terms to operators.
"Netflix and the likes are not just ‘big guys’ – they’re bloodsucking giants," Potgieter says. "They’re using our networks to make a fortune, and it’s time they started paying for it."
But how would this work in practice? Potgieter suggests regulating the market in the same way as call termination rates – with a per-gigabyte fee. This would level the playing field and give operators a fair chance to recoup their costs.
And what about the regulator, Icasa? Potgieter believes they should stop opposing mergers and acquisitions in the telecoms sector, citing the example of Vodacom’s proposed acquisition of Vumatel. "The Competition Commission is a bit fanciful about the effect these mergers would have on the market," he says.
So, will the likes of Netflix and Google’s YouTube start coughing up to support the infrastructure that makes their services possible? Only time will tell. But one thing is clear – the debate is heating up, and it’s time for a solution that works for everyone.
