Telecom embraces Big Tech as political winds shift

Companies like AT&T and Dish Network are putting their core network operations into the Big Tech cloud at the same time that Republicans and Democrats are uniting in their anger at FAANG.

Mike Dano, Editorial Director, 5G & Mobile Strategies

July 7, 2021

4 Min Read
Telecom embraces Big Tech as political winds shift

The global telecom industry is embracing "FAANG" in ways that no one could have expected just a few years ago. And it's happening just as the political winds begin to shift against those same Big Tech companies.

Facebook, Amazon, Apple, Netflix and Alphabet (formerly Google) – the companies that comprise "FAANG" and are otherwise known as "Big Tech" – are the world's biggest tech companies. And for years, telecom industry executives have quietly grumbled about how those companies managed to reap incredible profits off the networks they created.

But those days are rapidly disappearing. Facebook's Telecom Infra Project (TIP) continues to serve as a meeting ground for network operators embracing a software-powered future. Netflix is an increasingly important element in many operator's pricing bundles. And Apple and Google helped develop an ecosystem of smartphone products that made 4G connections an essential part of everyday life for most humans.

Increasingly, though, some of these same tech companies are now hosting operators' core network services inside their cloud computing operations. Dish Network plans to put the vast majority of its network software into Amazon's cloud, while AT&T recently announced it will offload its core 5G network operations into Microsoft's cloud.

The importance of this shift cannot be overstated. Telecom network operators that once complained about "over-the-top" companies stealing their SMS revenues are now unloading their prized jewels – their core networking operations – into the clouds run by those same "over-the-top" companies. It's quite a change.

FAANG on the outs

But as this telecom transition gains steam, the ground is shifting under Big Tech. The latest: Former US President Donald Trump sued Facebook, Twitter and Google for blocking him from their respective social media platforms. As the New York Times reported, his lawsuit is more of a fundraising vehicle than a legal argument, but it certainly dovetails with other actions taking shape across both sides of the aisle.

For example, House Republicans recently laid out their framework for regulating Big Tech. And that comes just weeks after bipartisan support for several different antitrust bills aimed at FAANG companies. Meanwhile, President Biden named Lina Khan – a leading critic of dominant technology companies – to head the Federal Trade Commission.

Big Tech appears to be taking the topic seriously. For example, Amazon filed a 25-page motion to recuse Khan from antitrust investigations of the company, citing her past criticisms of Amazon.

This political flip-flop is also noteworthy. There was a time not so long ago when Washington policymakers fell over themselves in their courtship of shiny Silicon Valley Internet companies. According to one report, Google representatives attended White House meetings more than once a week, on average, from the beginning of Obama's presidency through October 2015 – more than any other public company.

Those days, though, appear to be over. Just this week, a group of 36 states and the federal government sued Google over the company's control of its Android app store. The lawsuit focuses on Google's plan to force all app developers that use its Google Play Store to pay a 30% commission on sales of digital goods or services.

Old telecom ideas are new again

Incredibly, that's almost the exact same complaint that telecom industry executives leveled at Big Tech companies like Google roughly a decade ago. For example, Telefonica's Cesar Alierta complained in 2013 of the "new monopolies" being created by the likes of Google, Apple, Facebook and others. He demanded a "level playing field" via transparency and non-discrimination.

Although negotiations are ongoing, one new proposal could bring the entire situation full circle. A Republican FCC commissioner has been arguing that FAANG ought to put money into the Universal Service Fund (USF). Created in the 1990s, the USF collects around $10 billion annually from telecommunications providers – many choose to pass this expense on to their customers.

USF money is used to help fund the construction of networks in rural areas and to help poor Americans pay their Internet bills.

Meaning, the network operators that are now paying Big Tech to run their networks may soon receive money from those same companies, after it's been laundered by the US government.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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