European carriers hope to extract wireless fees from Apple, Google

Carriers in Europe are beginning to suggest that the likes of Apple and Google need to "pay their share" for wireless data use. That suggestion didn't make any sense when AT&T said the same thing about wired broadband in 2005.

<a href='http://meincmagazine.com/apple/news/2010/12/european-carriers-hope-to-extract-wireless-fees-from-apple-google.ars'>Read the whole story</a>

 

[glutto]

I think my employer should pay for all the food I consume, since they're the primary reason I require sustenance.

 

[rawcpoppa]

Maybe carriers should just choose to sell dumbphones and see their stress from data load drop...along with revenue

 

[shadowjin]

It's the Comcast/Netflix fight basically. Except that the teleco's don't have a separate content business they are trying to protect. It basically boils down to oversold and under delivered. The people selling the pipes and the airwaves were making nice profits till some companies started providing something that people wanted a lot of. So now the internet providers are scrambling to keep the machine they created going and build out capacity without footing the whole bill themselves. Since according to them it's these other companies fault they will actually have to provide what they have been selling all along, an unlimited network connection to a consumer.

 

[Killing Time]

block google and facebook on their networks, see if anyone wants to use their phone service then.
they should pay google etc. for making a market for new phones and new excuses to charge people.


i more apt to believe facebook could charge phone companies for rights to use their site than what they are thinking. much like how viacom beats on time warner for for increased fees.

 

[Cabal]

So you pay upwards of $50/30ish Euro a month for an internet connection, and because your provider is "protecting their investment"; you can only go to your providers fluffly "product(s) info" page.

Stop being fucking retarded.

 

[thiago_pc]

So, what could they do? Block content? That'd be a shot in their own foot...

Unless specific legislation is passed, nothing is gonna happen. And even that would be hard to come by, since we're talking international.

 

[ant1pathy]

I'm pretty sure that's what I pay for already. If you want to charge online service providers, then you need to stop charging ME. You can't get paid coming and going.

 

[NavyGothic]

In other news, I will soon be asking my electricity company to compensate me for the use of my house's electrical wiring.

 

[wanorris]

The situation is different in the EU, where line-sharing rules have created a more competitive broadband market than here in the States. In fact, European Commissioner Viviane Reding said last year that net neutrality was better in Europe thanks to its "pro-competitive EU regulation."

Of course, in the US a "free market" is much more important than actual competition. Brilliant.

 

[**RTS**]

This is ridiculous. What do ISP's think the reason I pay for internet access is? I pay to access sites that provide me with a useful service (ex. google apps). Without these useful services, I would not pay for the internet. Me accessing google and apple is their product. By definition they are dumb pipes.

Maybe, if they weren't trying so hard to become something else, they could optimize their expenses and actually be profitable.

 

[lyme]

I think this is a good idea, charge the companies for providing services.. and give me my phone bandwidth for free! Ok, it's stupid.

 

[dlux]

Except that the teleco's don't have a separate content business they are trying to protect.

Actually they did. Remember ring-tones for $5? Carrier-proprietary music services? (I still got flyers for that in my AT&T paper bill until recently. Having failed at that, now they're pushing the AT&T AppCenter!)

They are desperately trying to avoid becoming dumb pipes. Too bad they suck at just about everything they attempt, with the exception of parking their asses on certain radio frequencies and collecting tolls from all who use them for traffic.

 

[Shannara]

Double dipping should be illegal in EU.

 

[Charles314]

If they're worried about congestion, shouldn't they impose data or speed caps? If bandwidth is a scarce resource, they should charge more to those using more of it. If your current prices are insufficient to pay for adequate maintenance and growth, then those prices are too low.

It's like a road - the more you drive, the more you pay in taxes (through petrol tax), so the more you contribute to the maintenance of the road.

 

[junktrunk]

Maybe, if they weren't trying so hard to become something else, they could optimize their expenses and actually be profitable.

That's the dumbest part about it- look at the Fortune 500 list and you'll see that telecoms are the most profitable companies in the world (right up there with oil).

As much as I'm a fan of net neutrality, this is one case where regulation isn't necessary. Wireless carriers have no competing content like FB or Google Search, so FB and Google clearly have the power here. I.e. it is an empty threat, b/c if a carrier shut off access to those sites, consumers would be furious and have no sympathy for the carrier's position. They can easily walk away and get another carrier (breach of contract would be at least viable enough to take it to court so carrier would just release people). As others have said, it is FB and Google who have the power here to insist on rents of the carriers if they wanted to. They won't though due to the extreme negative PR it would generate.

The only reason Netflix had to cave to Comcast (throwing off the typical system where content provider is PAID BY the pipe (all TV arrangements are like that, cable/sat pays content network)) is because Netflix is in a vulnerable growth period right now. They can't afford to risk losing customers while fighting a PR/legal battle with Comcast, so they paid. Comcast couldn't care less because they want Netflix to die since they compete on video content services. There are no other realistic consumer options for wired broadband in most communities. THIS is why regulation is needed.

 

[AxMi-24]

Easy to solve. Forbid carriers to be anything other than dumb pipes where each side pays for access to the cloud and that's it.

Regulate the shit out of them. Critical infrastructure should not be in hands of over boosted egomaniacs.

 

[jeffbax]

The situation is different in the EU, where line-sharing rules have created a more competitive broadband market than here in the States. In fact, European Commissioner Viviane Reding said last year that net neutrality was better in Europe thanks to its "pro-competitive EU regulation."

Of course, in the US a "free market" is much more important than actual competition. Brilliant.

I hope you're not being so confused as to imply the US has a free market for communications. It is regulated to oligarchy.

 

[Kevin Lowe]

Ugh. I don't consider myself to be a "government solves every problem" kind of guy, but in this case, the largest ISPs have proven that they're going to fuck things up first chance they get. We're going to need municipal fiber.

 

[melgross]

Maybe, if they weren't trying so hard to become something else, they could optimize their expenses and actually be profitable.

That's the dumbest part about it- look at the Fortune 500 list and you'll see that telecoms are the most profitable companies in the world (right up there with oil).

As much as I'm a fan of net neutrality, this is one case where regulation isn't necessary. Wireless carriers have no competing content like FB or Google Search, so FB and Google clearly have the power here. I.e. it is an empty threat, b/c if a carrier shut off access to those sites, consumers would be furious and have no sympathy for the carrier's position. They can easily walk away and get another carrier (breach of contract would be at least viable enough to take it to court so carrier would just release people). As others have said, it is FB and Google who have the power here to insist on rents of the carriers if they wanted to. They won't though due to the extreme negative PR it would generate.

The only reason Netflix had to cave to Comcast (throwing off the typical system where content provider is PAID BY the pipe (all TV arrangements are like that, cable/sat pays content network)) is because Netflix is in a vulnerable growth period right now. They can't afford to risk losing customers while fighting a PR/legal battle with Comcast, so they paid. Comcast couldn't care less because they want Netflix to die since they compete on video content services. There are no other realistic consumer options for wired broadband in most communities. THIS is why regulation is needed.

So, regulation isn't needed, but it is needed? Is that your pitch?

 

[Great_Scott]

This is literally retarded. So the problem with providing network access is that is gets used?

Hmm. Maybe they could, you know, charge their customers more, since the customers are requesting the data.

 

[iamwhoiam]

All it is greed.

 

[sigma8]

If Apple and Google need to pay you for the bandwidth, then why do I need to pay you for the bandwidth? Make my wireless data plan free and then maybe I'll help you lay out the case to Apple and Google.

This is pure stupid. I cannot believe the way the internet is being ... something that almost rhymes with duct-taped.

 

[sigma8]

I'm pretty sure that's what I pay for already. If you want to charge online service providers, then you need to stop charging ME. You can't get paid coming and going.

oops, I basically said the same thing. I replied before reading. But, yeah. My god. Do these carriers realize that if it weren't for Apple and Google and the like, we WOULDN'T BE PAYING FOR THEIR OUTRAGEOUS DATA PLANS IN THE FIRST PLACE?

 

[jodyfanning]

Unfortunately, the carriers seem to forget that end users are already paying monthly fees, to have the data they request sent to them. Furthermore, service providers like Apple, Google, Facebook, Yahoo, and others are already paying for servers, network access, content delivery networks, and so on. To suggest these companies are using a telecom's "pipes" or "networks" for free is simply not true.

Exactly. This little detail is usually missing completely from the debate.

 

[flashoverride]

I realize this is the internet and we're all experts here, but do any of you realize that basically what was being said was that companies like Google, et al were goin to have to pay for access - which they do to a massive extent? Tier 1 ISPs have peering agreements for free, and a lot of companies not too long ago thought they could hop on that bandwagon, to which the ILECs and Telcos responded, "Fuck No". So what they did is build or lease massive CDNs (Content Distribution Networks) with edge routers and cache servers co-located, in an attempt to keep as much data off of the ILEC or Telco's backbone as possible, reducing the amount of bandwidth they would have to pay for in that regard.

Comcast isn't "making Netflix pay". It's telling Level 3 that it can't act as a Tier 1 and abuse that peering agreement by also acting as a CDN. Comcast isn't fucking dealing with Netflix at all. Please stop saying that, it makes you sound ignorant.

 

[wanorris]

The situation is different in the EU, where line-sharing rules have created a more competitive broadband market than here in the States. In fact, European Commissioner Viviane Reding said last year that net neutrality was better in Europe thanks to its "pro-competitive EU regulation."

Of course, in the US a "free market" is much more important than actual competition. Brilliant.

I hope you're not being so confused as to imply the US has a free market for communications. It is regulated to oligarchy.

Hence the scare quotes.

But the people who argue for keeping it the way it currently is always do it on the grounds of supporting the "free market", when their choice of words could hardly be more ironic.

 

[Yaoshi]

Easy to solve. Forbid carriers to be anything other than dumb pipes where each side pays for access to the cloud and that's it.

Regulate the shit out of them. Critical infrastructure should not be in hands of over boosted egomaniacs.

This is EXACTLY what I've been thinking for years now.

 

[MyGaffer]

I don't see the networks winning on this one. The whole reason people PAY them for access to the net is to access these places. They can ask Google for money, but if Google says no what are they going to do, block Google? Who wants to be the one smart phone that can't access Google?
They decided to offer mobile Internet service. The customers pay them, they get to access the web and everything on it. Why do they feel they are entitled to charge the the content provider too? If I was Google I would start talking about how the network providers are getting a free ride to their content and that they need to start paying for it the way a cable provider pays for its TV shows. That will shut these idiots up pretty quickly.

 

[flashoverride]

Easy to solve. Forbid carriers to be anything other than dumb pipes where each side pays for access to the cloud and that's it.

Regulate the shit out of them. Critical infrastructure should not be in hands of over boosted egomaniacs.

This is EXACTLY what I've been thinking for years now.

There *is* no cloud. That part, that part in the diagram where they draw the little cloud? That's just instructor speak for "a bunch of nuanced highly technical shit that is outside the scope of whatever I'm presenting". What the cloud represents is actually massive amounts of copper/fiber and associated transmission equipment on the layer 1 side and tons of routers on up. Guess what? All of that shit wasn't free.

 

[flashoverride]

I don't see the networks winning on this one. The whole reason people PAY them for access to the net is to access these places. They can ask Google for money, but if Google says no what are they going to do, block Google? Who wants to be the one smart phone that can't access Google?
They decided to offer mobile Internet service. The customers pay them, they get to access the web and everything on it. Why do they feel they are entitled to charge the the content provider too? If I was Google I would start talking about how the network providers are getting a free ride to their content and that they need to start paying for it the way a cable provider pays for its TV shows. That will shut these idiots up pretty quickly.

Because no one *ever* paid to be on the internet before Google! I mean fuck, they invented the thing, right? It's not like the Telcos already make fucking tons more money off of them than... oh wait, what? They do?

 

[masklinn]

As much as I'm a fan of net neutrality, this is one case where regulation isn't necessary. Wireless carriers have no competing content like FB or Google Search, so FB and Google clearly have the power here. I.e. it is an empty threat, b/c if a carrier shut off access to those sites, consumers would be furious and have no sympathy for the carrier's position. They can easily walk away and get another carrier.

Unless the other carrier implements the exact same restriction, which they will because those asshole are very good at working together to screw the customer. And it's not like the scene is very good for new entrants, especially in the US where MVNOs have even less freedom than in europe.

 

[smccarthy]

I'm receiving a letter pretty soon telling me that I have to pay extra for the phone service. Since I make money by doing business over telephone I should share my company's profits with them.

It's sad that Alierta is speaking as he is doing when Movistar (previously known as Telefonica) is the owner of portals (Terra.com) and social networks (tuenti.com). It means that they should pay the other ISP providers for saturating their pipes with their own traffic, plus the peering.

I'm sure he wasn't thinking about it when he said that since Movistar's web services are not generating as much money as they would like them to be making.

 

[Shaun Murray]

So you pay upwards of $50/30ish Euro a month for an internet connection, and because your provider is "protecting their investment"; you can only go to your providers fluffly "product(s) info" page.

Stop being fucking retarded.

30 Euro? Nobody pays that for data in Europe. More like 5 to 10 Euro and upwards depending on the data allowance. Unlimited data is pretty rare here. A year ago the carriers will still calling 1GB data 'unlimited' but now they're being sensible and calling it 1GB. Some used to have fair use policies that capped the data after a certain amount but were rarely enforced.

ADSL is almost always never 'unlimited' here either so we're already used to capped or tiered broadband. You almost always make a choice based on the data allowance and contention ratios offered by the service and if you dig deeper wether the ISP uses bandwidth shaping or not. This is the norm here.

Chris wrote

"In the meantime, the European carriers plan to shift to capped and tiered service plans, much as some US carriers have done in the past year or plan to do in the near future. It seems likely that Europeans can expect wireless bills to go up while the principle of net neutrality becomes a contested political issue."

This is bollocks. Most European carriers already have capped and tiered services. It's been the case for years already. Our data bills have also gone DOWN as each carrier competes for customers by offering differing levels of service at different price points.

Then again, if Ars takes the analysts at face value. eg. from the quote in the Bloomberg piece...

"Unlimited data plans will become increasingly rare, said Rosalind Craven, an IDC analyst based in London."

...they'll go wrong. Rosalind Craven is clueless. Has she actually checked the carriers for unlimited data plans...

O2 - tops out at 3GB data (1 GB on an iPhone)
Vodafone - tops out at 5GB data (1 GB on an iPhone)
Three - tops out at 15GB data (1GB on an iPhone)
Orange - tops out at 1GB data +1GB 'quiet time' (1 GB on an iPhone)

I'd love to know where Rosalind is getting her unlimited data.

I know Ars is a US site but please get somebody from Europe to read articles about Europe before publication. Now carry on with your Apple v Android pieces ignoring Symbian.

 

[dfiler]

It's the Comcast/Netflix fight basically. Except that the teleco's don't have a separate content business they are trying to protect.

Skype is competing with one of their services though. Granted, it doesn't seem related to this ridiculous topic.

 

[smccarthy]

So you pay upwards of $50/30ish Euro a month for an internet connection, and because your provider is "protecting their investment"; you can only go to your providers fluffly "product(s) info" page.

Stop being fucking retarded.

30 Euro? Nobody pays that for data in Europe. More like 5 to 10 Euro and upwards depending on the data allowance. Unlimited data is pretty rare here. A year ago the carriers will still calling 1GB data 'unlimited' but now they're being sensible and calling it 1GB. Some used to have fair use policies that capped the data after a certain amount but were rarely enforced.

ADSL is almost always never 'unlimited' here either so we're already used to capped or tiered broadband. You almost always make a choice based on the data allowance and contention ratios offered by the service and if you dig deeper wether the ISP uses bandwidth shaping or not. This is the norm here.

Chris wrote

"In the meantime, the European carriers plan to shift to capped and tiered service plans, much as some US carriers have done in the past year or plan to do in the near future. It seems likely that Europeans can expect wireless bills to go up while the principle of net neutrality becomes a contested political issue."

This is bollocks. Most European carriers already have capped and tiered services. It's been the case for years already. Our data bills have also gone DOWN as each carrier competes for customers by offering differing levels of service at different price points.

Then again, if Ars takes the analysts at face value. eg. from the quote in the Bloomberg piece...

"Unlimited data plans will become increasingly rare, said Rosalind Craven, an IDC analyst based in London."

...they'll go wrong. Rosalind Craven is clueless. Has she actually checked the carriers for unlimited data plans...

O2 - tops out at 3GB data (1 GB on an iPhone)
Vodafone - tops out at 5GB data (1 GB on an iPhone)
Three - tops out at 15GB data (1GB on an iPhone)
Orange - tops out at 1GB data +1GB 'quiet time' (1 GB on an iPhone)

I'd love to know where Rosalind is getting her unlimited data.

I know Ars is a US site but please get somebody from Europe to read articles about Europe before publication. Now carry on with your Apple v Android pieces ignoring Symbian.

I don't know from what part of Europe are you from, but you should come over to Spain (still part of Europe ) and the 30Eur is among the lowest you can get. I would love to get it for 10 or 5 but nope. My Vodafone Spain 1GB (down to 128kb/64Kb after that) is 25Eur before taxes and my ADSL service is uncapped in data and calls for Spain (land lines not mobiles) for 36Eur and 3Mbps. In Spain there is not a data cap on ADSL for any company that I know except Movistar in a couple data plans that nobody uses because they are so expensive, at around 20Eur when for 10 more you get unlimited plus phone calls.

Europe has many countries so I will not say what is it like in the rest of the countries but at least that is the situation in Spain and Italy (BTW the price of Vodafone ADSL in Italy without promotions is 44Eur for a 7Mb connection) and for 3G connection we have unlimited data plans (Oro and so on on Vodafone) for about 50Eur no calls or line included.

 

[MrMickS]

Erm... what did the carriers think was going to go over their data capable networks? They are all advertising Internet usage from the phones that they sell you at a subsidised price. They advertise the fact that you can access this content over their networks. They then charge you a small fortune if you exceed your data allowance on your price plan.

Access to the content it was the network providers are using to sell their service. If there was no content they wouldn't be able to sell their service. If they can't afford to provide the service at the price they are selling at then they need to review their pricing. We've already seen the removal of unlimited data plans in the UK. Other measures will surely follow.

 

[adminfoo]

I can see at least the possibility that the wireless companies may not be completely full of BS here.

As demands for wireless broadband go up, costs to these companies do rise. They have to upgrade equipment at every cell tower, and that's a huge capital expense. They have to upgrade their (wired?) bandwidth to every one of those sites as well. There may be costs of securing additional wireless spectrum (I don't know how that's administered in the EU). They may need to build new towers to get adequate coverage. There may be higher electricity costs to pay for higher wattage transmitters.

All of the above is just a guess on my part; I'm not an RF/data engineer for a cellco. So this is really my point, and my question. Are the cellcos facing higher capital build-out costs right at the point when they had expected their existing network to finish paying off the loans secured to pay for the original build-out? Are they facing unexpectedly higher operating costs?

If the answers to theses questions are yes and yes, then indeed, somehow those higher costs have to be paid. The cellcos can attempt to pass the costs on to their customers, or they can try to find a way to strike new deals on the other side of the fence, or they can seek some other business model which distributes payments elsewhere. None of this is written in stone after all.

Now before you bite my head off for asking these questions (and that is all they are: questions), ask yourself: do you really understand the costs of running a major wireless data company? I worked for a cellco once upon a time, and had stock options there. My options never paid out, and when I started digging into the reasons for this, I was staggered by the huge build-out costs it took, just to get the company to a spot where it could start selling phones and plans at all! The network had basically no chance of paying its original build-out costs in anything under a decade.

I am certainly not suggesting that these companies should get a free ride. What I'm saying is that the original article really doesn't give enough numbers to say whether the cellcos basic premise (that changing data use patterns create a revenue gap which has to be addressed somehow) is true or false.

 

[scrizt]

I'd say that it's the customers who's using the network, and sure as hell not for free.

 

[junktrunk]

Maybe, if they weren't trying so hard to become something else, they could optimize their expenses and actually be profitable.

That's the dumbest part about it- look at the Fortune 500 list and you'll see that telecoms are the most profitable companies in the world (right up there with oil).

As much as I'm a fan of net neutrality, this is one case where regulation isn't necessary. Wireless carriers have no competing content like FB or Google Search, so FB and Google clearly have the power here. I.e. it is an empty threat, b/c if a carrier shut off access to those sites, consumers would be furious and have no sympathy for the carrier's position. They can easily walk away and get another carrier (breach of contract would be at least viable enough to take it to court so carrier would just release people). As others have said, it is FB and Google who have the power here to insist on rents of the carriers if they wanted to. They won't though due to the extreme negative PR it would generate.

The only reason Netflix had to cave to Comcast (throwing off the typical system where content provider is PAID BY the pipe (all TV arrangements are like that, cable/sat pays content network)) is because Netflix is in a vulnerable growth period right now. They can't afford to risk losing customers while fighting a PR/legal battle with Comcast, so they paid. Comcast couldn't care less because they want Netflix to die since they compete on video content services. There are no other realistic consumer options for wired broadband in most communities. THIS is why regulation is needed.

So, regulation isn't needed, but it is needed? Is that your pitch?

What I said was that in this case (wireless carriers threatening to make content providers pay to send content to wireless subscribers), market forces alone will be just fine at shutting that down. Especially in Europe there is plenty of choice in carriers.

And in the case of wired networks, specifically the Netflix/L3 situation in the US, there is much less competition, and considerably weaker content providers, so regulation here makes sense.