[Starlink] The French have decided to destroy the Internet within their own country by taxing Gigabits (Dr. Peering)

[Inemesit Affia <inemesitaffia@gmail.com>]

*Translated with Deepl*

I read Amendment I-1358 to the 2027 Budget Bill, which was adopted this Friday by the National Assembly:
a tax of €0.055 per GB sent to subscribers of French ISPs. The
figure is abstract, so let’s compare it. Correct me if you spot any
errors.

Two comparisons and a real-world example:

1. Transit and peering. A 100 Gbps port costs approximately €6,300 per
month from a global transit provider. For direct interconnection with
a European ISP, 3 to 5 times as much, or 20 to 30 k€ per month. For this
port (a), the tax amounts to 1.02 M€ per month, or approximately 3,400% to 16,300%
of the price of an interconnection to French ISPs. This therefore
radically changes the economic model for bandwidth in France.

2. Hyperscalers are criticized for the price of their outbound traffic, which
ranges from about €0.08 to €0.045 per GB depending on volume. The tax, at €0.055 per
GB, represents 68% to 123% of that price. This means that, for
traffic to France, the price—which is already considered too high—would effectively double!

3. The OVHcloud case. We send approximately 500 Gbps at the 95th
percentile to French ISPs, or about 324 Gbps on average. Over the course of a
year, the gross tax would amount to €70 million. The bill caps it at 15% of revenue
generated in France or 2% of global revenue, which amounts to between approximately €23 million and €70 million
per year that we would have to collect on behalf of the government and, therefore, pass on to our
customers.

Conclusions:

1. A tax generally applies to a small fraction of its tax base.
This tax base is worth more than 3,000% of the cost of transit, and approximately 100% of the
retail price of hyperscalers.

Remember the SREN law, which was passed to eliminate
the transfer fees that prevented customers from switching from one
cloud provider to another. Here, we’re talking about doubling the price of outbound traffic to
French internet users—a price that’s already very problematic.

2. The cap—a limit calculated based on revenue—is
inconsistent. This revenue figure includes servers, storage,
data centers, and teams that have nothing to do with bandwidth. It’s like
creating a tax based on the electricity consumption of
automobile factories in France, capped at 15% of the
manufacturers’ revenue. What’s the connection between the two?

3. A national tax of this kind would undoubtedly affect companies based
in France, while their global competitors with no presence in France
deliver the same traffic to the same French ISPs without paying this tax in
practice. This creates a distortion of competition to the detriment of domestic
players and puts companies that hire in France at a disadvantage. A tax
that produces the opposite effect would be a better approach.

(a) Based on the 95th percentile, this port is not constantly at full capacity: with
a typical daily profile (22% around 4 a.m., 90% around 9 p.m.), it carries, on
average, 57% of its capacity, or 18.6 million GB per month.


.....

I wonder who's meant to benefit from this law.