By Marco Hugo Barsotti MHB 
You are listening to a new special from am1575news, Francia24 and Radio Centrale Milano, in podcasting and on the airwaves.
There are in France, always cited by President Macron, some “gems”—the few companies that oppose US dominance in streaming, Cloud services, and AI. One is OVH. We report in full today’s comment by the founder of one of these gems on the new ideological tax proposed and provisionally approved in the French parliament.
The Comment by Octave Klaba
I read amendment I-1358 to the PLF 2027, adopted this Friday in the Assembly: a tax of €0.055 per GB sent to subscribers of French internet providers. The figure is abstract, so let’s compare it. Correct me if you see any errors.
Two comparisons and one concrete case:
1. Transit and peering. A 100 Gbps port costs about €6,300 per month from a global transit provider. In direct interconnection with a European provider, one must count 3 to 5 times more, i.e., from 20 to 30 thousand euros per month. On this port (a), the tax reaches 1.02 million euros per month, which is about 3400% to 16300% of the price of an interconnection toward French providers. This therefore profoundly changes the economic model of bandwidth in France.
2. Hyperscalers are criticized for the price of their outbound traffic, which ranges from approximately €0.08 to €0.045 per GB depending on volume. The tax, €0.055 per GB, represents 68% to 123% of this price. We are therefore talking about doubling, for traffic toward France, a price already judged too high!
3. The case of OVHcloud. We send an order of 500 Gbps at the 95th percentile toward French providers, which is an average of about 324 Gbps. In a year, the gross tax would reach 70 million euros. The text limits it to 15% of revenue generated in France or 2% of global revenue, meaning between approximately 23 and 70 million euros per year that we would have to collect for the State, and thus pass on to our customers.
Conclusions:
1. A tax generally hits a small fraction of its tax base. This one is worth more than 3000% of the transit cost, and about 100% of the public price of hyperscalers. Remember the SREN law, voted to eliminate transfer costs that prevented customers from leaving a cloud provider. Here, we are talking about doubling the price of outbound traffic toward French internet users, a price that is already very problematic.
2. The safeguard, a cap calculated on revenue, is inconsistent. This revenue covers servers, storage, datacenters, and teams that have nothing to do with bandwidth. It is like creating a tax calculated on the electricity consumption of automobile factories in France, with a cap at 15% of the manufacturers’ revenue. What is the relationship between the two?
3. A national tax of this type certainly hits companies established in France, while their global competitors without a presence in France deliver the same traffic to the same French providers without actually paying this tax. This creates a distortion of competition to the detriment of national operators and penalizes companies that hire in France. A tax that produced the opposite effect would be a better approach.
(a) Billed at the 95th percentile, this port is not always full: with a typical daily profile (22% at 4 AM, 90% at 9 PM), it transports on average 57% of its capacity, which is 18.6 million GB per month.
That is all for now. From the newsrooms in Nice and Paris, this is am1575news, Francia24 and Radio Centrale Milano.
Source: AudioVisione – AM 1575 News