Often hinted at but rarely talked about in polite, mixed company (especially in the net neutrality-influenced U.S.), the idea that some content providers should pay more for higher-quality levels of access to telco networks was broached today by the head of T-Mobile. In an interview published in Germany, chief of T-Mobile’s parent company Deutsche Telekom, Rene Obermann, said content companies like Apple and Google are heavier users of mobile data networks, and thus should pay extra for faster or more reliable service delivery.
NewTeeVee has some additional details:
Deutsche Telekom is already in discussions with Google about this very subject, according to Obermann. The Telekom CEO didn’t say whether T-Mobile would want to use this approach universally or restrict it to countries with less stringent net neutrality protections. The company operates mobile networks in more than 10 European countries, as well as in the U.S.
The U.S. Federal Communications Commission is currently trying to reclassify broadband to gain the authority to enforce net neutrality rules for ISPs, but it’s unclear if and how this is going to affect mobile broadband. There is even less net neutrality protection in place in many European countries.
Connected Planet’s Take, Susana Schwartz:
Recent comments by T-Mobile’s Rene Obermann that Apple and Google should pay more for higher-quality mobile data brings a new angle to the net-neutrality debate I’ve been covering for Connected Planet.
While much of the talk has revolved around usage-based and tiered pricing to put consumers in check, relatively little has been said about actually trying to put some sort of check on the OTT players themselves. Any success in imposing surcharges would probably be passed to the consumers through higher charges from the likes of Apple, and consumers will no doubt complain. But the time has arrived for Google and Apple to field some of that criticism, just as the telcos have had to do. When AT&T spoke of tiered pricing, certain customers lashed out in blogs and on social media, but there were also many who said it’s about time “bandwidth hogs” pay their dues so the rest of the users can choose plans that best fit their needs and get assurances of quality for what they pay.
Up to now, the Googles and Apples have been very outspoken in their reproaches of the carriers, as they haven’t had to bear the burden of any backlash.
For example, when AT&T approached Apple with the idea of switching YouTube to a Wi-Fi-only feature to ease up the load on the network, Apple refused with the “its-not-our-problem” response.
Instead, AT&T went ahead and made about $19 billion in capital expenditures, with about $2 billion more than the previous year going into wireless network and backhaul investment.
But operators see the writing on the wall and know they cannot continue with the endless buildouts and network upgrades. People’s appetites are insatiable, so no amount of build will be enough; people will consume whatever is thrown at them cheaply.
Because iPhones (and other smartphones) use much more data than other devices, it makes sense that T-Mobile and others should charge an extra surcharge to make some sort of ROI on the tremendous investments they make for fast and reliable service. Though they have been demonized in the media for dropped calls and poor quality, the carriers are obviously investing and building feverishly to try and keep up with demand. At some point, the FCC will realize that like any infrastructure provider, telcos have to be reimbursed if there is to be incentive to continue with investments. If not, then eventually the experience for the greater whole of customers will be compromised because of the usage by a smaller percentage.
I find it ironic that content providers who scream the loudest about someone else needing to invest Billions $$$ need for bigger pipes to spur their businesses, also scream that no one who invest in these pipes should be allowed to control them.
Google has made Billions $$$ by selling ads and prominent search returns (for which the more you pay the more prominent and often your ad comes up) via thier search engine that allow people to read copywrited material for which they do not want to pay anything to the owners of that material!
I think Google should have to guarantee Ad Neutrality and Search Neutrality on their search engine. With their dominance in Search, they determine who has access to what and who the winners and losers are going to be in the future economy. Google should be be able to determine who’s ads come up when or who’s search results get returned more prominently. {In case you miss the satire, I realize this is a ridiculous argument, but it is essentially the exact argument that Google makes for Net Neutrality}