We recognise the financial challenges that European telecom operators now face after decades of strong performance. However, proposals by some European telecom operators to impose network fees on Content Application Providers (CAPs) such as Meta are not the solution. Network fee proposals are built on a false premise because they do not recognise the value that CAPs create for the digital ecosystem, nor the investments we make in the infrastructure that underpins it.
Telecom operators and CAPs are symbiotic businesses, occupying different but complementary roles in the digital ecosystem. Every year, Meta invests tens of billions of euros in our apps and platforms – such as Facebook, Instagram and Quest – to facilitate the hosting of content. Billions of people go online every day to access this content, creating the demand that allows telecom operators to charge people for internet access. Our investment in content literally drives the revenue and business model of telecom operators.
But there’s much more to it than that. At Meta, we also invest to sustainably build and improve complementary infrastructure to make the internet ecosystem more reliable and efficient. Over the last decade, CAPs have collectively invested over $880 billion in global digital infrastructure, including approximately $120 billion a year from 2018 to 2021. These infrastructure contributions made by technology companies save telecom operators around $6 billion per year.
Since 2017, Meta alone has invested more than $100 billion of capex and opex in global digital infrastructure, including billions of euros in Europe. And in 2022, we invested over $30 billion globally in digital infrastructure, with a capex to revenue ratio in line with or higher than that of major European telecom operators.
Through our investment with partners in submarine cables like Marea, Havfrue, Havhingsten and Amitie, transatlantic capacity has increased approximately fourfold since 2016. These investments, combined with other technical innovations that Meta has led, have fuelled significant demand growth for telco data services. Meanwhile, the cost per bit has plummeted, and we estimate is less than a quarter of what it was five years ago.
More capacity at a lower cost has benefited people and businesses on both sides of the Atlantic. For example, since 2019 the Marea cable has contributed approximately $18 billion each year to Europe’s economy – and this will increase as other cables go live in 2024 and 2027.
We have also pioneered vital network investments connecting Europe to Africa, the Middle East and South Asia through landmark submarine cable projects including 2Africa and 2Africa Pearls. To deliver these, we have partnered with a range of telecom operators, including Vodafone and Orange. In addition, Meta is a large customer of the European telecom industry. Since 2018, we have invested more than half a billion euros leasing or purchasing over one million kilometres of terrestrial fibre.
We have also invested to build and deploy a Content Delivery Network (CDN), including an extensive European fibre network, enabling over 99% of user-requested content to be delivered more efficiently. We don’t charge telecom operators for this. Our passion for network efficiency and keeping content local is also embodied through our ground-breaking partnership with the Internet Society to develop new Internet Exchanges (IXPs) in countries such as Colombia and the Democratic Republic of the Congo.
Fixed networks will drive metaverse adoption in the near term
From education to medical training to construction, millions of people are already using immersive technology. This number will inevitably grow. We know that some European telecom operators have justified network fee proposals by speculating about capacity constraints caused by metaverse adoption – but this is nonsense. The development of the metaverse will not require telecom operators to grow capital expenditures for greater network investment.
That’s because metaverse adoption for the foreseeable future will continue to be driven predominantly through Virtual Reality (VR). Almost all VR content is currently consumed over fixed networks through Wi-Fi. These fixed networks are already established across the majority of Europe, and carry almost 20 times the traffic of mobile networks. We know from our own data that over three-quarters of Meta’s traffic in Europe is delivered through fixed networks.
In fact, Europe should be lauded for its progress in installing Fibre to the Home/Building (FTTH/B) which, given its lifespan of over 30 years, is a cornerstone of access technology and a ‘once in a generation’ investment. Over 60% of Europeans now enjoy FTTH/B coverage. Deployments are well on their way to reach the EU Commission’s goal of full coverage of homes with a gigabit network by 2030. Large markets such as Spain (89%) and France (63%) invested early to build capacity, with Orange reporting lower 2022 capital expenditures citing ‘deployment at an advanced stage’.
Looking ahead, Europe’s fixed network capacity, with easily upgradeable FTTH/B deployments, is more than enough to supply demand for the metaverse and other internet services for decades to come. Initial GPON (Gigabit Passive Optical Network)-based FTTH/B deployments already support speeds of 2.4 gigabits-per-second. These are upgradeable today to 10 gigabits-per-second symmetrical speeds with available XGS-PON equipment and work is already progressing on further upgrades to 25 and 50 gigabits per-second speeds – all on the same underlying fibre.
For European consumers, the priority is to ensure that the fixed networks which carry the vast majority of data have the technical capabilities to capitalise on the internet of tomorrow – and the good news is that the industry’s existing investment roadmap is already on track to enable home connection speeds tens of times higher than today’s. Combined with expected improvements in latency through continued growth in edge data centres, Europe’s network has more than enough potential to address demand for the metaverse and other internet services for decades to come.
AR devices will not create a capacity constraint
The immersive worlds we can discover in VR are just one possible way to experience the metaverse. Augmented Reality (AR) devices, which overlay digital content onto the real world in a small form factor, will be another important part of the metaverse in the future.
As we set out in December, our vision for the creation of true AR glasses will require years of progress to make our devices slimmer, lighter, faster, and more powerful, all while consuming less battery power and generating less heat. Devices will need to understand both the world and user expressions to effectively overlay pixels on top of reality to offer a truly transformative experience.
Our engineers are some of the best in the world, and they continue to be at the vanguard of bringing our AR vision to life. It is one of the most ambitious R&D efforts in the world today, focused on building a truly revolutionary new kind of computing platform. However, to overcome the challenges set out above, it will take years before AR devices become ubiquitous.
AR glasses will be ‘on the go’ devices, like mobile phones. But just as you use your mobile phone in locations with access to Wi-Fi such as your home or place of work, we expect the vast majority of AR usage to be over Wi-Fi through fixed networks. This furthers the rationale for the upper 6GHz band to be adopted as unlicensed to support expected Wi-Fi growth.
Of course, AR devices will also use mobile networks in the future. However, evidence does not suggest that there will be mobile network capacity constraints resulting from AR. This is principally because of 5G, which is expected to be over two and a half times more efficient than 4G. We expect speeds for AR applications to be no more than low double digit megabits per second, whereas 5G can support speeds up to a gigabit per second in low (<1 GHz) and mid-band (1.7-4.7 GHz) deployments. That’s why we do not expect AR devices to result in traffic growth that would drive a major change in the physical architecture and required capillarity of mobile networks.
5G network costs are also proving much less expensive than previously thought. With Massive MIMO radio improvements, telecom operators are seeing overlay mid-band (3.5GHz) 5G network deployments achieving similar propagation to 4G networks at 2.1GHz, resulting in dramatically lowered 5G network rollout costs with reuse of existing passive site and transport network assets.
The good news is that Europe’s 5G coverage has grown dramatically, with almost three-quarters of the population in EU27 countries now having access to 5G. Of course there is still work to be done, but the EU’s goal of 100% coverage should be achievable by 2030. This 5G infrastructure will allow the metaverse, in time, to deliver AR mobile experiences of real value to society and there is no evidence that additional investment is required to make this happen.
Collaboration is key to unlocking the metaverse’s potential
Over recent decades, the digital economy has helped to drive economic growth and build community in ways no one could have imagined. One reason for this is because the internet evolved as an open infrastructure, with organisations collaborating to unlock opportunity. CAPs and telecom operators have collaborated successfully for many years, such as during the Covid pandemic when organisations worked together to help keep people connected. And we will continue to work with partners globally and in Europe to improve the user experience, enhance network efficiency, and bring immersive experiences to life.
But partnership requires an honest diagnosis of the opportunities and challenges that we all face along the way. For the reasons set out above, there is simply no evidence to support a metaverse capacity wall – which is why we are adding our voice to the chorus of concern shared by a range of organisations about the network fee proposals (including from civil society, academia, industry bodies and regulatory experts). As noted earlier, we do recognise the challenges that some European telecom operators now face, but imposing an arbitrary network fee on companies that bring investment and innovation to the digital ecosystem is not a sustainable solution.
The post Network fee proposals are based on a false premise appeared first on Meta.
source https://about.fb.com/news/2023/03/network-fee-proposals-are-based-on-a-false-premise/
0 Comments