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EU Telcos Whine, Demand Google Pay Them For Nothing
AT&T Logic Pollutes Entire Globe's Telecom Discourse
by Karl Bode Tuesday 11-Sep-2012 tags: business · bandwidth · telco · net-neutrality
AT&T's 2005 proclamation that they wanted content companies to subsidize their network build for absolutely no solid reason (since content companies and consumers alike already pay for bandwidth) has long since kind of become a cornerstone of "telco think" worldwide, in the process kicking off the modern net neutrality debate. It's an entitlement mindset forged among the disconnected executives in government-pampered, yes-men packed monopoly meeting rooms, and it has slowly infected the brains of European executives as well.

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Companies like Spain's Telefonica have tried to argue that Google should pay them extra money just because. In unison with France Telecom, Telecom Italia, and Swisscom have even taken the idea to the UN in the hopes of making it mandatory international law.

Given a company like Google already pays for bandwidth (and in fact owns significant infrastructure of their own), the logic is utterly idiotic if not downright extortion. The Earth would shake from the speed in which these same telcos would balk if Google or Microsoft decided to start charging ISPs a toll to allow ISP customers to use search engines.

With that said, Techdirt directs our attention to a new proposal by European telcos to the ITU, in which they argue (again) via their ETNO trade group that content companies should be funding their network deployments -- just because. It's almost a work of art in the way they make something that is so idiotic sound almost like a real policy, with just a few very light threats concerning Internet stability thrown in for good measure:

The aim of the ETNO proposal is to contribute to the achievement of a more sustainable model for the Internet. ETNO is not asking for increased regulatory intervention but aims to establish a reference for commercial negotiations. The current interconnection model has some shortcomings that need to be addressed. Today there is a huge disproportion amongst revenues and a clear shift of value towards players (Over the Top players -- OTT) who are not contributing to network investment. Traffic and revenue flows need to be realigned in order to assure the economic viability of infrastructure investment and the sustainability of the whole ecosystem. The revision of the ITRs offers a unique opportunity to propose high‐level principles for IP interconnection.

As Mike Masnick at Techdirt quite correctly notes, that's simply flowery language for "pay us for absolutely no reason because we don't like having to pay for network upgrades." It's again just lazy telco monopolists (who whine about government and regulation until they want protectionist laws or hand outs) demanding that government force content companies to pay a completely unnecessary tax -- one that goes right into the monopolists pocket. The fact that these ridiculous proposals get serious floor time anywhere highlights the biggest benefit of being a monopoly with an unlimited lobbying budget: government protectionism and regulatory capture.

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Sukunai
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Let them try

All Google needs to do is let them know the search engine will suddenly stop searching for them specifically without a fee being paid.

Google would only need to sit back and watch as the customer base MADE the companies stfu.

Simple reality here, this doesn't even need a court room.

I need Google more than I need my ISP. I can easily replace an idiotic company, I doubt you can replace Google.

michieru
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Miami, FL
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Are you serious?

Can't believe we are still having this discussion!
Telco

join:2008-12-19
Reviews:
·Callcentric

Google

Their rationale is like saying a toll road owned by a private company should be allowed to base the fees on the value of the goods you are transporting.

They are a prime example of why telecommunications should be nationalized and operated like a road. After all, data has become as essential as power to a home.

I applaud the growing number of developed countries that are doing just that. Having the government roll out a wholesale FTTH network; which any 'private' company can then utilize to sell their services over.

Linklist
Premium
join:2002-03-03
Longport, NJ
kudos:5

Re: Google

said by Telco:

Their rationale is like saying a toll road owned by a private company should be allowed to base the fees on the value of the goods you are transporting.

They are a prime example of why telecommunications should be nationalized and operated like a road. After all, data has become as essential as power to a home.

I applaud the growing number of developed countries that are doing just that. Having the government roll out a wholesale FTTH network; which any 'private' company can then utilize to sell their services over.

Their rationale is that the very large content companies(especially those with video streaming) create the need for last mile upgrades, where costs are hugely disproportionate to the costs of the data center to backbone network costs that the content companies see. And that the content companies therefore are garnering a larger share of the revenue while incurring a smaller share of the costs. IOW, the last mile ISPs want a bigger slice of the pie.

And where governments can change the pie sharing percentages by changing the law, like in most of the EU, the telcos will use their lobbying muscle to get the rules changed.
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Metatron2008
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join:2008-09-02
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Re: Google

This would mean though that you should pay your ISP every time you upload. You should pay your isp for having things on the internet. If they are trying to argue that anyone using services should pay, then everyone and everything in the end would pay the isp.
nonymous
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Glendale, AZ
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[BQUOTE=Romney2012Their rationale is that the very large content companies(especially those with video streaming) create the need for last mile upgrades, where costs are hugely disproportionate to the costs of the data center to backbone network costs that the content companies see. And that the content companies therefore are garnering a larger share of the revenue while incurring a smaller share of the costs. IOW, the last mile ISPs want a bigger slice of the pie.

And where governments can change the pie sharing percentages by changing the law, like in most of the EU, the telcos will use their lobbying muscle to get the rules changed.
[/BQUOTEThe last mile ISPs can and do have CAPS and overages. Why should it matter what content the customer is using? They are billed according to their tier of service. If telcos wanted to and they do just put CAPs in place and charge for more usage. Oh wait customers revolt. So who is their next victim?

Kilroy
Premium,MVM
join:2002-11-21
Ann Arbor, MI
said by Linklist:

And where governments can change the pie sharing percentages by changing the law, like in most of the EU, the telcos will use their lobbying muscle to get the rules changed.

And where we will continue to see the golden rule, "He who has the gold rules", put into application a.k.a. the best government money can buy.

People should not be afraid of their governments. Governments should be afraid of their people. - V
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Kearnstd
Elf Wizard
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the thing is the whole reason Broadband is hugely profitable is the content companies putting stuff on the net that is worth buying the faster packages for.
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openbox9
Premium
join:2004-01-26
japan
kudos:2

Re: Google

Bingo. And that's why ISPs will continue to raise rates for consumers as well as looking for these additional streams of revenue.
Kearnstd
Elf Wizard
Premium
join:2002-01-22
Mullica Hill, NJ

Re: Google

of course because the ISPs like to double dip.

best way to compare that I can find is this. the NJ Turnpike charging me a toll for using the road but also wanting General motors, Honda, Ford, Toyota, etc to also give them money for every one of their cars using it.
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openbox9
Premium
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Re: Google

Double-, triple-, quadruple-dipping, it doesn't really matter. The fact is that businesses like to make money and will conduct business accordingly.

How about the silliness of the Turnpike charging tolls in the first place when drivers already pay fees for licensing, road use, gasoline tax, income tax to both state and federal that is disbursed for highway improvements, etc.? How double-dippings is that?

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
This is as stupid as the idea that everytime I view a website, the owner should have to pay me. After all they should have to pay for "Access" to my home.

Or how about I deserve a commission from the website everytime I buy something.

ETC ETC ETC

It's all incredibly stupid.

Their users pay them. End of story.
--
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tanzam75

join:2012-07-19
said by Telco:

Their rationale is like saying a toll road owned by a private company should be allowed to base the fees on the value of the goods you are transporting.

Toll roads do not, but railways do.

In the US, for example, railways base the transportation fee on the value of the goods transported. A container will cost more to ship than the same weight/volume of coal. Specialty industrial chemicals will cost more than ethanol, even if they are nonhazardous and thus require no additional handling.

There is an implicit societal judgment involved -- that grain and coal should get to use the railway at slightly above cost. In contrast, the railway should be allowed to make more of a profit on the high-value cargo, which can better bear the transportation charge.

In addition to the per-commodity pricing, there are also discounts for types of traffic that costs less for the railroad to handle. A single unit train will cost less than the same number of cars spread over several mixed trains. An unscheduled train that is permitted to be delayed will cost less than a high-priority scheduled train that pushes the other trains into sidings.
Skippy25

join:2000-09-13
Hazelwood, MO

I love the spin!

Not a single telco/cable/backbone provider pays for their own upgrades. Every single one of them incur revenues from their consumers and it is those consumers that pay for ALL the upgrades and keeps your lights on.

All they are simply doing is trying to create a new revenue stream. They are not trying to recoup cost of upgrades. It are the content companies that are the single most important part of the internet. We can all have 100GB symmetrical fiber connections to our brains, but if there is not a single thing out there we want it will go unused.

So ISP morons, stop trying to bite the hands that feed you.

EDIT: Love the crying baby picture for this though.

Anonymous
Premium
join:2004-06-01
IA
kudos:1

Re: I love the spin!

That pic made made me laugh.

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
said by Skippy25:

Not a single telco/cable/backbone provider pays for their own upgrades. Every single one of them incur revenues from their consumers and it is those consumers that pay for ALL the upgrades and keeps your lights on.

Amen. The end users pay for everything. The end users want to access YouTube or Netflix? Then their ISP better provide the network necessary to do so. That's WHAT THEY ARE BEING PAID FOR.

These days, they want to FORCE consumers to pay them, and also not have to provide anything at all, and just pass the costs to EVERYONE else but them, but they keep all the revenue.

It's asinine in every way. Greed, lack of competition, lack of true choices all fuel this entitlement mindset.
--
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openbox9
Premium
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Re: I love the spin!

said by KrK:

Amen. The end users pay for everything. The end users want to access YouTube or Netflix? Then their ISP better provide the network necessary to do so. That's WHAT THEY ARE BEING PAID FOR.

And the argument from ISPs is that they should be paid more for you to be able to access YouTube, Netflix, or any other content for that matter.
Skippy25

join:2000-09-13
Hazelwood, MO

Re: I love the spin!

So let them raise their prices. They are certainly capable of doing that and there isnt even any competition in a vast majority of the markets to prevent them from doing so.

So let them raise their rates and see how much that limits the usage. If it is not enough, let them keep raising them until they discourage enough people from using their resources that it frees up the necessary bandwidth they feel they "need".
openbox9
Premium
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japan
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Re: I love the spin!

said by Skippy25:

So let them raise their prices. They are certainly capable of doing that and there isnt even any competition in a vast majority of the markets to prevent them from doing so.

I agree. And it will continue happening. The rhetoric coming from the ISPs is just that, nothing more. ISPs will not be successful with charging content owners for priority routing or for directly connecting them to consumers.
said by Skippy25:

So let them raise their rates and see how much that limits the usage. If it is not enough, let them keep raising them until they discourage enough people from using their resources that it frees up the necessary bandwidth they feel they "need".

That's happening here in the US. Caps and overages are only the first step. Next comes metered usage....IMO.

KrK
Heavy Artillery For The Little Guy
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Tulsa, OK

Re: I love the spin!

Only because of regulatory capture and the prevention of competition however is this possible.
openbox9
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Re: I love the spin!

So? I don't believe you'll find many to dispute the limited competition that the US currently has on the ISP front.

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK

Re: I love the spin!

Many do. They argue the market takes care of itself, and no regulation to foster competition is needed. They compare apples to oranges, like Satellite Internet to Cable, DSL to LTE or FTTH to everything else.

They act like there are so many choices and options and everything is fine.... just fine.

It isn't.... and barring competition, consumers aren't really freely able to vote with their wallet or walk away from bad policies or service.

Therefore they have to accept hikes, caps, overages, metering.... no matter how much they don't like it or agree. It's like forking over money for the crumbs they choose to give you, not what you actually want. Sure, you could always do without. People argue that that is a choice as well, claiming it's all a luxury and frivolous.

I disagree.
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openbox9
Premium
join:2004-01-26
japan
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Re: I love the spin!

said by KrK:

Many do.

Sorry, I should have qualified my statement. Many to legitimately argue the lack of competition in the US. I won't dispute the lack of competition, but I will argue that if there's a will, there's a way. Startups, businesses branching to new territories and ventures, and even municipalities if done properly and fairly. I'm not sold on the need for regulation, or if it will necessarily make the market healthier or not. I believe it's a dangerous road that needs to be tread on carefully. Regulation is not the answer to everything...especially poorly thought out regulation.

KrK
Heavy Artillery For The Little Guy
Premium
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Tulsa, OK

Re: I love the spin!

said by openbox9:

Startups, businesses branching to new territories and ventures, and even municipalities if done properly and fairly.

Que Regulatory capture. Actual rules and laws that PREVENT said competition from ever getting rolling.

This site regularly covers laws the incumbents have passed that ban, block, impair or otherwise stymie just said efforts to bring competition to the market.
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openbox9
Premium
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japan
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Re: I love the spin!

And this continues to be disproved for a majority of the situations. In most municipalities, competition is not prevented...even by the municipalities themselves.

BTW, the incumbents don't pass laws.

KrK
Heavy Artillery For The Little Guy
Premium
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Tulsa, OK

Re: I love the spin!

Don't be naive. It's prevented in a myriad of different methods.

As for the incumbents not passing laws.... They just write them, and then give them to their beholden politicians to put it into effect.
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"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
openbox9
Premium
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kudos:2

Re: I love the spin!

Don't believe all of the inflammatory headlines that you read.

Lawyers write laws, lobbyists push them on their Congress critters, then your elected officials go from there. This doesn't just happen in the world of telecom.
ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

Call their bluff

Google should simply call their bluff. All Google would have to do is say, "No, we won't pay, but we won't block your users, either. If you don't like it, then you can block your users' access to us." If these ISP's then choose to block their users, Google can simply point out that these ISP's customers are the ones paying the bills, yet they aren't getting their money's worth and that it's the ISP's, not Google, that's blocking access. The fallout will be lightning fast and severe to the extreme. I'd give it maybe two days before the blocks are removed.

axiomatic

join:2006-08-23
Tomball, TX

Re: Call their bluff

THIS... do it like now. End this debate for good just like this.
mgamer20o0

join:2003-12-01
Norwalk, CA
google should then ask them to share part of their profits. if it wasnt for sites like youtube netflix google and so forth less people would be connected less people would pay for the faster speeds. so it works both ways.
Kearnstd
Elf Wizard
Premium
join:2002-01-22
Mullica Hill, NJ
said by ISurfTooMuch:

Google should simply call their bluff. All Google would have to do is say, "No, we won't pay, but we won't block your users, either. If you don't like it, then you can block your users' access to us." If these ISP's then choose to block their users, Google can simply point out that these ISP's customers are the ones paying the bills, yet they aren't getting their money's worth and that it's the ISP's, not Google, that's blocking access. The fallout will be lightning fast and severe to the extreme. I'd give it maybe two days before the blocks are removed.

Exactly, calls into their support centers cost money. if they blocked Google their call volume would skyrocket and it would cost them way more money to man extra phones than it does to simply have an open link to Google.
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openbox9
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This debate is not much different than the one that routinely occurs between pay TV distributors and the content owners, except the roles are somewhat reversed. When push comes to shove, the hard choices usually aren't made. We'll see how this plays out.

Metatron2008
Premium
join:2008-09-02
Stockbridge, GA

Solution: Global Gfiber network.

If the whiney entitled telcos won't 'let you ride their pipes for free', put em out of business.
FLATLINE

join:2007-02-27
Buffalo, NY

Re: Solution: Global Gfiber network.

Who said anything about free? We the consumer pays our ISP. And Google invests in infrastructure, the content that makes use of all the bandwidth and they pay for bandwidth. There's no free ride on any side?

I see a few posters complaining about this argument popping up and I agree this is tiresome. It really is time to settle these internet issues once and for all. I just hope Googles Kansas experiment does well and Google decides to be an isp. I'm in Google sign me up!
openbox9
Premium
join:2004-01-26
japan
kudos:2
Great in theory for consumers, but the reality is that Google can't afford to wire the world. Incumbent ISPs aren't going anywhere, so we'll continue seeing statements like these thrown around and the whining back and forth between the content owners and distributors.
Kearnstd
Elf Wizard
Premium
join:2002-01-22
Mullica Hill, NJ

Re: Solution: Global Gfiber network.

I am guessing its investors that actually shut the ISPs up when they start this whining. Because while an investor loves profit over all else and nothing but profit. The smart ones know that the PR backlash of actually blocking say Youtube because Google did not pay into a protection racket will do more harm to their stock price than just eating the cost of last mile expansion so customers can stream HD video.

And profits can always be repaired fairly easy, reputation cannot be repaired easy. in all forms of business that is true though. reputation is earned over time and lost in a day. especially in the era of Twitter and Blogging where backlash moves faster than a PR spin team can ever hope to clean up.
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openbox9
Premium
join:2004-01-26
japan
kudos:2

Re: Solution: Global Gfiber network.

said by Kearnstd:

The smart ones know that the PR backlash of actually blocking say Youtube because Google did not pay into a protection racket will do more harm to their stock price than just eating the cost of last mile expansion so customers can stream HD video.

Management is smart enough not to make that PR blunder without any investor activism.
WhatNow
Premium
join:2009-05-06
Charlotte, NC

Problem solved

This problem would disappear if customer billing was based on usage not a flat rate with no caps. The new content like video streaming do cost the the ISPs upgrade cost that do not bring in any more revenue. As each customer uses more data the ISP has to make the pipe upstream bigger. The only way to cover that cost is to raise the price or cut their profit margin. If there is competition it is hard to raise your price with out losing customers.
If networks, upgrades were so cheap to built and ISPs like the Telcos and Cable were rolling in money then there would be more ISP building the last mile network. Verizon tried with Fios and found out how much more it costs. At the moment Google Fiber is one of the few companies that is placing a new network in a big city. They are also one of the few that can absorb the costs.
To put it simply when your customers data use reach the capacity of a piece of equipment what ever the ISP does to increase capacity does not bring in a single extra dime unless more customers are added.

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