EU telecoms to Apple, Google: 'Pay up!"
You break, you pay
Customer Success Testimonial: Recovery is Everything
European telecoms want Apple, Google, and bandwidth-sucking service providers such as video streamers to help pay for improvements needed to support steadily increasing loads on their networks.
Phone companies' infrastructures are straining under the demands of data, video, music, and other bandwidth munchers, and Bloomberg reports that an impending "cold war" between network operators and network users is a hot topic at the Le Web'10 conference now underway in Paris.
Apple, Google, Facebook, Yahoo!, and others are benefitting from the billions that telecoms are pouring into network upgrades, and France Telecom, Telecom Italia, Vodafone, and others think that it's time for those service providers to pay what the telecoms believe is their fair share of the upgrade costs.
Telecom Italia CEO Franco Bernabe complained that the strain on network operators' bottom lne "is set to compromise the economic sustainability of the current business model for telecom companies," Bloomberg reports.
France Telecom CEO Stephane Richard was more direct: "Service providers are flooding networks with no incentive [to limit bandwidth]," he said recently. "It's necessary to put in place a system of payments by service providers as a function of their use."
Cesar Alierta, CEO of Spain's Telefónica, said earlier this year that Google, Yahoo!, and others "use Telefónica's networks for free, which is good news for them and a tragedy for us," adding "That can't continue."
The solution, from the telecoms' point of view: share the financial pain by rejiggering fee structures to squeeze more payments from the web companies who benefit from the telelcoms' infrastructure upgrades.
Not so fast, says Giuseppe de Martino of the French online-video provider Dailymotion: "If telecom operators want us to share in their expenses, perhaps we should talk about sharing subscription revenues as well."
Bloomberg also points out that European telecoms are not exactly being driven to the poorhouse. France Telecom's domestic data revenue, for example, was up a healthy 24 per cent in its third fiscal quarter, swollen in part by the fact that the company is the number-two iPhone purveyor, behind only AT&T in the US.
Telecoms have also found another source of increased revenue: users. Vodafone, for example, has declared that tiered pricing is inevitable in their drive to bring in more income from bandwidth-hungry users.
Richard of France Telecom couched his company's plans in careful corporate-speak: "We are progressively going to switch from the unlimited approach that has been the trademark of our industry to something which is more sophisticated," he said at Le Web'10.
It's not only the users' euros but also their loyalty that's the grand prize in this dust-up. As one analyst told Bloom, referring to the European telecoms: "They want a bigger piece not only of the pie but also ownership of the customer. There's clearly a big battle."
But at the end of the day, the question isn't whether service providers such as Apple, Google, et al. or users will be the source of telecoms' infrastructure-upgrade funding — the telecoms want both to pay.
What remains to be seen is how much a telecom will be able to charge a user before that customer jumps ship to a competitor, and how successful telecoms are in restructuring carriage deals with service providers.
That "cold war" is sure to heat up in coming months. ®
COMMENTS
What a joke...
'Cesar Alierta, CEO of Spain's Telefónica, said earlier this year that Google, Yahoo!, and others "use Telefónica's networks for free, which is good news for them and a tragedy for us," adding "That can't continue."'
Solution: Block Google, Yahoo!, and the others from your network if you think they're taking advantage of you. What's that? You need them? Stop complaining then.
Wait, what?
They *are* being paid! I'm pretty bloody sure the BBC, Yahoo, Google and their ilk are paying through the nose for their bandwidth usage.
Last time I looked, I couldn't ask BT or Telecom Italia (and I can talk about the latter from a position of personal experience as I'm currently living in Italy) for a fat fibre-optic connection to my home! I can barely get decent ADSL. As a business, getting full-fat bandwidth ain't cheap either: you pay quite a big chunk of money to lose the "A" from "ADSL" and get "DSL". If you want anything faster—as I'm sure Microsoft and Auntie Beeb do—you pay even more.
And you don't pay the buggers just the once either. You pay 'em every damned month.
So: Telecom Italia, BT, Telefónica, etc., are *already* being paid handsomely for their infrastructure. And their users are *also* paying money for *their* connections to said infrastructure. So these shysters are getting paid *twice*. And, of course, without those big companies offering bandwidth-gobbling services, none of these telcos would *have* any users. They'd be in the position of, say, a cable TV company with no television programmes.
If these idiots still haven't worked out how to turn a decent profit, perhaps they should stop pissing so much cash up the wall on idiotic, bullshit adverts that redefine the word "unlimited" to mean the exact opposite of what it says right here in my Oxford Dictionary of English.
Gah! Froth! Foam! ***EXPLODES***
First it was Tiscali vs BBC
...now it's bigger, but the same old debate.
If the telcos can't handle the traffic, they should stop promising unlimited traffic and multiplexing so much over the limited bandwidth - and upgrade it, whilst charging people for the usage they get.
On a side note, it might encourage devs to be smarter about what they implement so they use less data per request. It might not, but it can't hurt to hope, right?
IT infrastructure monitoring strategies
What you need to know about cloud backup
Agentless Backup is Not a Myth
Customer Success Testimonial: Recovery is Everything
Data control in the cloud
