This week saw Amazon Web Services (AWS) share its Q3 2025 earnings, less than a fortnight after it suffered a major outage that saw 16 million user outage reports from across more than 60 countries.

AWS reported year-on-year (YoY) revenue growth of 20.2% in the quarter, its best growth rate in 11 quarters, with total revenue of $33 billion, up from $30.9bn in Q2.

In comparison, Microsoft's overall cloud revenue was $49.1 billion, up 25% YoY, with Intelligent Cloud, including its flagship cloud platform Azure, bringing in $30.9 billion, up 27%.

Microsoft, too, is no stranger to outages, with this week seeing a DNS issue knock out Azure – just like AWS the week before prior – affecting 18,000 users at its peak according to Downdetector.

Whether these sizable service failovers will have an effect on the two hyperscalers’ next set of profits is unlikely. After all, they and Google Cloud command considerable power across cloud and network real estate, and will likely control nearly two-thirds of all data center capacity worldwide by the end of this decade.

In the view of analyst John Strand, this position of privilege comes from a lack of accountability for the hyperscalers when systems go awry. According to a recent Strand Consult report, AWS escapes the kinds of statutory obligations telecoms have, such as universal service contributions, minimum backup and reliability rules, and public filing of tariffs.

Strand argued that while telecoms face extensive regulation on reliability and public-interest duties, cloud vendors operate with far less mandatory accountability. This is despite the fact the Big Three run their own networks in a manner equivalent to telecom transmission, meaning it's fairer for them to be treated like carriers by regulators.

“When we look at the regulation of this market, you can say that hyperscalers are part of a value chain where they are not subject to much regulation. On top of that, their payment for using telecom networks is quite limited,” Strand told SDxCentral.

The analyst’s report focuses on AWS in particular, highlighting the cloud giant’s lobbying and commissioning reports to influence the market in its favor. This includes a curious tendency to single out South Korea on the issue of network usage fees, with AWS adamant Korea’s usage fee arrangements “reduce investment, security, innovation, and welfare.”

“Korea is one of the top five telecom markets and a market that has been dominated by local players,” Strand said in an interview. “AWS sees Korea as a growth market where they can sell much more than storage [including] APIs and AI solutions.”

The free ride stops here

Strand contended overall that AWS’s various efforts exist to oppose rules that would force it to help fund resilient broadband or contribute to universal service schemes.

The report also claimed AWS “gets a free ride on the downstream broadband networks that carry [its] growing volumes of data, video, and advertising traffic. Contributing like every other user is the foundational obligation necessary to ensure ecosystem resilience, network reliability, and affordable access.”

This is not just limited to AWS, with Strand reminding SDxCentral that when hyperscaler customers increase traffic on their platforms, by nature, customers get lumped with a larger bill for usage.

“[It’s a] grotesque thing … We are talking about a bill where these hyperscalers do not pay the many broadband players for their increasing costs.”

Regulation is coming

In its report, Strand Consult recommends telecom-style standards to ensure “resilience and responsibility in essential digital services.”

These prevention measures include ensuring multi-region, multi-provider architectures, faster DNS recovery and isolating control systems to prevent total collapse, and publishing incident reports and dependency maps.

It also argues for minimum availability standards or financial credits for any downtime that occurs, and accountability mechanisms, whether public, contractual, or regulatory, to ensure resilience as an essential rather than a luxury.

The report stops short of calling for full utility-style regulation, as historical telecom regulation sometimes maintained monopolies and stifled innovation. Regulators may also lack the brain trusts needed to 'outwit' the hyperscalers on the latest tech knowledge, meaning surface-level mandates would further compound current bad practices.

Strand also disputes the usefulness of market competition, arguing that diversifying across providers is expensive and technically complex for many organizations. Antitrust, meanwhile, cannot “mandate redundancy or resilience.”

The first step is holding a “long overdue” public conversation about resilience, accountability, and the boundaries of Big Tech’s self-regulation.

Strand is confident what the end result would entail.

“I believe that in the future these players will be subject to regulation, while at the same time they will be forced to pay for the increasing volumes of traffic they send through the networks of broadband operators,” said the analyst.