back to article Netherlands first European nation to adopt net neutrality

The Dutch Parliament yesterday agreed to make the Netherlands the first nation in Europe to officially put net neutrality principles into law. The law will force ISPs and telecom operators to ensure access to all types of content, services or applications available on the network. The new telecom law has won a near unanimous …

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  1. Steve Button
    Stop

    On the one hand...

    we don't want Skype and VoIP or iPlayer throttled because the ISP can make money from their own alternative.

    On the other hand, we don't want to have to pay extra for our broadband, to subsidise users who feel they need to hoard scores of Gigabytes of movies every month, just so they have used up all their "allowance", thereby treating their cap as a target rather than a limit.

    Is there not a decent compromise to this?

    "Net neutrality or not" oversimplifies the argument.

    1. Anonymous Coward
      Anonymous Coward

      What bull

      Sorry but that's bull. You are not 'paying extra' for high bandwifth users. You pay for a service. The service says 'unlimited, 10MB/s' or it says '100GB a month, 10MB/s' or what not. If you buy and unlimited service the presumption is you have some need that requires a lot of data. You're saying people should stop paying for and using such unlimited services? What kind of logic is that?

      The real problem is ISPs over-subscribing users to unlimited contracts that are far, far from being unlimited in the hope that the users don't actually use the bandwidth that has been supposedly been sold to them. Solution? Stop false advertising and sell services that you can actually provide.

      1. James 139

        Quite right

        Either its unlimited or its not.

        ISPs and Telcos should be required to state things properly, and I dont really mind which way its done, either advertised as "unthrottled capped" or "throttled capped" or actually provided as unlimited.

      2. Steve Button
        WTF?

        RE: what bull.

        No, it's not bull.

        The vast majority of normal people just use their broadband connection for web, mail and a bit of iPlayer. No BitTorrent, usenet or LoveFilm. 1Gb / month? Less? This is today, but will soon change because of LoveFilm / Netflix / iPlayer.

        The few users who are hogging huge amounts of bandwidth by using BitTorrent either a) Slow it down for everyone else or b) Put the overall price up.

        ISPs don't put together their pricing structure expecting EVERY user to use the max bandwidth and use up their whole cap every month. If they did, it would be much much more expensive and they wouldn't get any business.

        Don't be naieve and think they could run the business any other way than "over subscribing". It's just not as simple as that.

        Before I get flamed...please bear in mind that I count myself as one of those high usage users as I download a few films every month (only ones I actually want to watch though, not to hoard) stream a lot as well as Linux distros and music and occasionally manage 30-50 Gbytes. So, I'm one of the ones who benefit from most other users paying a lot more than they really need to. But I'm paying £25 / month with Zen, so I probably pay more than most.

        Probably many Reg readers are in a similar position, and we've had it good for a few years now. But don't go thinking that we're the typical user. Once everyone starts streaming films, (as they are now doing in the USA a lot) things will have to change, or the ISPs will simply go out of business.

        And pay-per-bit is not the answer either, as this really stifles innovation.

        1. Ken Hagan Gold badge

          Re: stifles innovation

          "And pay-per-bit is not the answer either, as this really stifles innovation."

          If your "innovation" has disregarded the reality of your network infrastructure then you aren't a very good engineer. You probably haven't been as innovative as you like to pretend. It would probably be better for the rest of us if you were stifled.

          1. david wilson

            @Ken

            >>"If your "innovation" has disregarded the reality of your network infrastructure then you aren't a very good engineer. You probably haven't been as innovative as you like to pretend. It would probably be better for the rest of us if you were stifled."

            I couldn't agree more with that.

            Just as fast processors, multigigabyte memories and big disks allow shit programmers to get away with writing hideously bulky and sickeningly inefficient programs, thick fast pipes allows other code-unworthy-of-life to keep existing.

        2. Anonymous Coward
          Anonymous Coward

          Rollover

          Again, you've missed the point.

          The problem is not users hogging bandwidth, it's the pricing models.

          ISPs pay per MB.

          Customers can pay for a cap but most ISPs are charging for "unlimited use".

          With the huge variations in data usage it's a cost v price mismatch.

          Customers don't like uncertainty so they overpurchase. They fear caps..

          What's missing from ISP charging is rollover. Introduce rollover and customers will jump to a safe cap and then the ISPs can start charging the heavy users properly without fear of losing a big chunk of custom.

          Even low-usage customers don't like uncertainty so they over-purchase.

          1. CD001

            I may be wrong...

            I may be wrong, but I think pretty much every ISP also "pre-purchases" their bandwidth as well - so they buy an allocation in advance and have to hope that the user base doesn't exceed that allocation (else they have to pay extra).

            The price they charge customers is based on the cost of their bandwidth purchase which, in turn, in based on expected usage from previous records of customer usage.

            "Unlimited with fair usage policy" works well for for ISPs as they can claim to offer unlimited bandwidth without ever needing to BUY enough bandwidth to cover it in the first place (as that would be impossible). Any ISP that sells a 50GB a month service had better make sure it buys 50GB per customer from the higher tier providers otherwise they're genuinely not provisioning their service - if you offer an unlimited service (with fair usage policy) and your user-base averages say 10 Gigs a month per user - then you only have to buy perhaps 11 Gigs per user for that month from your providers.

            The problem, as ISPs are finding now, is that as more services come online that allow users to eat up more of their "Unlimited" bandwidth (iPlayer was one such service) then the average user bandwidth consumption goes up - if your average customer is now consuming 12 GB a month worth of data when all your pricing was based on 10 GB per user - then you've GOT to put your prices up to be able to afford the additional bandwidth yourself ... hell, I remember getting snotty letters from BT (many years ago - on dial-up) because I'd exceeded their undisclosed fair usage limit of... 150 MEGAbytes for the month!

            150MB ... games patches are bigger than that now! Hell, the two games I downloaded from the PSN "Welcome back" offer came to 8GB worth of data - more than 50x the entire monthly allowance from BT a decade or so ago.

        3. Blitterbug
          Meh

          @Steve Button

          Sorry Steve, it *is* Bull. You and I share similar high usages, but I pay a higher rate (around £40) for a 45GB monthly allowance (unlimited between 8pm & 8am). Why the hell should I then have to pay *again* if I choose to stream a lot of youtube, or even pron? Actually I'm on a business tariff for my business but anyone can use this ISP / tariff.

          Once the ISPs stop whining, and wake up to the fact that the 'golden age' of the ISP scam is almost over, more of 'em will start setting up slightly higher tariffs for peeps who wish to use more b/width.

          That should take care of their poor old 'lost' margins without us having to pay extra for high usage sites

      3. rciafardone
        Thumb Up

        100% agree.

        Nothing else to add, since that almost exactly word by word what i would have said.

    2. blackcat
      Thumb Up

      Yeah

      "Is there not a decent compromise to this?"

      Yeah, pay per GB you download each month.

    3. Martijn Otto

      Traffic shaping

      The problem is not, as many people think, the high volume of data.

      For example, WhatsApp barely uses any data (it's just text), so 'scores of Gigabytes' does not exactly apply.

      The point was that providers are using DPI to see what kind of traffic users are sending, and blocking/allowing based on that, not the amount of data.

      Providers are still free have data limits, different prices for different speeds, etc. Just not discriminate on the *kind* of traffic.

      1. Chad H.
        FAIL

        It is bullshit

        If the ISPs can't make money offering an unlImited service at a givenprice then they need to change the price or move to a pay for what you use (in raw bandwidth) not artificially cap certain type of services to scare off certain types of users.

        If you can't provide the service you say in your marketing you offer, stop offering it, don't rely on tricky small print to save you.

  2. NoneSuch
    Joke

    \o/

    Yay for the Netherlands. Now we just have to get Holland and the Dutch on board...

  3. Michael H.F. Wilkinson

    Calling the VVD liberal

    is like calling Margaret Thatcher a moderate conservative. On the other hand, they are probably as liberal in practice as Nick Clegg is today.

  4. dotdavid
    Thumb Up

    Finally

    "In recent months, Dutch telecom operators have complained that the volume of text messaging is slowing sharply because of cross-platform mobile messaging apps which allow users to exchange messages without having to pay for SMSes"

    So, the telcos' favoured cash-cow SMS is fading away as people realise they're being extorted and move to less extortionate services that use mobile data. Fine. It's happening everywhere.

    But unlike in most places The Netherlands is stopping the telcos simply switching to another extortion racket (i.e. data costs differentiated by application) by passing a law. Excellent news.

    I think it's sad that it is very much the exception. Extortion of mobile customers seems to have been accepted around most of the world as the norm - I can't see the UK following in the Netherlands' footsteps.

    1. Elmer Phud
      Meh

      Fading SMS

      So, companies are complaining that punters are using something to reduce costs. I would assume that the companies, themselves, also engage in practices that are to reduce costs.

      Is there a problem or is it just simple business ?

      1. ravenviz
        Terminator

        No problem

        You are witnessing the minutae of progress.

    2. Oliver 7
      Thumb Up

      I don't need no steenking title

      Was going to post that very quote myself. I am constantly disgusted by the attitude of such companies. They try to twist logic to argue that some arcane business model that once gave them a monopoly, and which they exploited to profiteer, is somehow an entitlement that must be protected against any progress or competition.

      Why can't we, in the UK, have such logical law making? Why are our politicians so corrupt? Why is there no one to stand up for consumers?

  5. Anonymous Coward
    FAIL

    That's the ISPs dead

    I have no sympathy at all for telcos who think SMS gives them a license to print money in perpetuity. SMS as a revenue source has been dead for years. Most of them have moved on.

    But if ISPs are prohibited from "charging extra for services" they are dumb pipes by order of the state, and can't compete with Sky etc.

    Well done Holland, you've just killed your ISP industry and handed the future to Mr. Murdoch.

    Blij nu?

    1. jaduncan
      FAIL

      Really?

      "But if ISPs are prohibited from "charging extra for services" they are dumb pipes by order of the state, and can't compete with Sky etc."

      Uh, no it doesn't. They just can't prioritise the bandwidth for that, or limit people from using other video services. Unless you think it means that they may not charge for provision of email services, their own video-on-demand services...in which case you are wrong, and indeed have a fundamental misunderstanding of both this law and what net neutrality is.

      1. Anonymous Coward
        Anonymous Coward

        Dead again

        The ISPs can't prioritise bandwidth for ANYTHING. So they won't be launching their own video on demand services, because they can't guarantee it won't be a crappy service. Video packets need prioritisation, regardless of who they come from.

        You have a fundamental misunderstanding of how the internet works. One slow lane for everyone, thanks to a law written by Luddite politics students.

        1. Anonymous Coward
          Gimp

          Ahum

          Pardon me, but Google seems to do pretty well with Andriod + youtube. The mobile video's are of an amazing quality. Even if on a low bandwidth connection. It's not that you have a 40" flatpanel in your hand and need a high resolution. Ever heard about a thing called webm? Compression tech will continue to evolve just like the wireless transmission will get better and better (remember AM anyone?).

          And FYI, it were the very Internet literate and best & brightest of people from the Dutch Internet community that forced their politicians to look at this. Countless hours of spare time have gone into educating the politicians. You cannot imagine the overwhelming attention this issue got from the very hearth of the group of Dutch bloggers, Internet rights movements (especially bits of freedom BOF.nl), computer scientists, journalists, Hackers / IT professionals, and the better ISP's (xs4all.nl) all those people worked very hard to create this coalition in the chamber of parliament.

          Usually lobbyist from "the other side" can buy laws through ignorance, but not this time.

        2. CD001

          RE: Dead again

          ... Why all the downvotes?

          Net Neutrality means that you can't, for instance, create a "Gaming ISP" - one that puts gaming protocols at the top of the QoS stack and moves other non-latency specific traffic (such as HTTP) down the stack, you have to treat all traffic the same... or am I wrong?

    2. dephormation.org.uk
      Boffin

      The ISPs are killing themselves

      through oversubcription, underpricing, and illegal communications surveillance.

      IF they stop oversubscribing, underpricing, and breaking the law... they would thrive.

      Their predicament is no one's fault but their own.

  6. Pseu Donyme

    Good for them

    This seems like the only effective remedy against tie-in schemes favouring the ISP's and select 3rd parties services. Mind you, I would not mind those that hogging bandwidth for P2P or whatever getting lower priority, based on a sliding average of the bandwidth used, that is, solely on the quantity of data /time.

    1. dephormation.org.uk
      Boffin

      If they were charged by consumption

      ... the issue of P2P traffic would evaporate in 30 minutes.

      The problem is not usage (no one is 'overusing the network.

      The problem is under charging. Offering unlimited service to people for a low fixed cost is the cause.

      In other words... the price is low/demand is high, therefore the price needs to increase to moderate demand.

      1. Anonymous Coward
        Holmes

        True

        And the freetards will hate you for pointing it out - because everything should be free, man. Music, bandwidth and beer.

  7. Ian Yates
    Headmaster

    Stats

    Wait... someone help me out here.

    "8 per cent decline in text messages per customer"

    So "text messages per customer" is the total number of text messages sent divided by the number of customers (assuming we're talking mean here), and they've seen a decline in this figure of 8%.

    Isn't that *exactly* the same as saying "8 per cent decline in total text messages"?

    (Thursday-afternoon-brain don't do me wrong!)

    1. Anonymous Coward
      Anonymous Coward

      Stats fail

      If the number of text messages stayed constant and the number of customers increased by 8.7% then text messages per customer would decline by 8%.

    2. Chad H.
      Stop

      No

      For it to be a 8% decline in total smses the total user base would need to be constant. Total SMSes could decrease faster if the network was shedding customers or decline slower (perhaps even increase) if they were gaining users

      1. Ian Yates
        Thumb Up

        facepalm

        +1 Internets to you both

        My ill-thought argument can rest their for posterity.

  8. adnim

    I can only guess

    That the majority of dutch parliament members do not have shares in, are not on the board of and do not have friends who are CEO's of dutch telecoms companies. Either that or integrity rules supreme in dutch politics. Perhaps a mixture of both.

    I am skeptical of the possibility that UK MP's will adopt the same stance.

    1. nyelvmark

      Perhaps

      ...they all have shares in Microsoft (who own Skype, in case you missed it)?

  9. Simon Neill

    Hrm.

    Well, I am all for prioritising my skype data or game data over someone else's bit torrent data. I'd even be ok if you slowed my steam download so that others could skype/game smoothly.

    what I object to is paying my TV license for bbc iplayer to exist then paying my ISP to watch it. If google want to provide youtube for free, fine but again I refuse to pay my ISP to use youtube specifically. If they can't supply the bandwidth and data transfer limits they have given me in the contract thats their problem not mine.

    1. Jim Morrow
      Paris Hilton

      bastard bbc

      > what I object to is paying my TV license for bbc iplayer to exist then paying my ISP to watch it.

      eh? nobody gave me a free tv or computer when i bought a tv licence. did i go to the wrong queue in the post office? i don't remember the dvds of bbc content being given out for free in the shops either. btw, i'm still waiting for the electricity company to give me a discount for the power used when my tv is tuned to the bbc because i paid for a tv licence.

      paris icon because i paid my licence to see her on mastermind. plus the free tv set i didn't get.

    2. david wilson

      @Simon Neill

      >>"f they can't supply the bandwidth and data transfer limits they have given me in the contract thats their problem not mine."

      Of course, it depends what is in the contract*

      I'd imagine that few ISPs these days would have truly unlimited terms in contracts that they were thinking they /might/ potentially want to limit.

      Advertising 'Unlimited' services when they aren't does stink, but as long as the regulator lets companies do that, it's understandable why one might not want to stop unless they know everyone else is going to stop as well.

      (*and people (including the overwhelming majority of Reg readers) who are well aware that 'unlimited' doesn't typically mean unlimited can't in all honesty claim any kind of implied contract based on the product name.)

  10. James Micallef Silver badge
    Thumb Up

    Good for teh dutch

    If the ISPs object to their clients using high-volume services, they should stop selling *unlimited* packages which is actually very limited by a whole bunch of caveats.

    If they want to charge per volume, or put in reasonable[*] data limits, then please do so as long as you make it clear in your advertising, and as long as 1 bit of email is counted the same as 1 bit of webpage, bittorrent, skype or anything else

    * and I mean reasonable in an age of multimedia internet, not what used to be reasonable 5 years ago

  11. Alan Esworthy
    Big Brother

    Newspeak

    Net Neutrality = Govt Net Surveillance and Control

    I don't much like some of the ISP/telco practices but I detest the very concept of swapping those practices for govt control. Shirley you know it won't stop here.

    [Where did the V/Guy Fawkes tag go?]

    1. alwarming
      Stop

      Mixing two different concepts, you are.

      If anything, the oppostite is MORE true.

      Govt can more easily survey data if ISPs were already pre-segregating them. Allow me to explain with an analogy:

      1- Net neutrality means you pay road tax once and go everywhere for free.

      2- Absence of net neutrality means you pay toll tax for specific roads.

      And now as a control freak govt, I want to see who goes to the mosque ? All I need to do is pull up the toll booth payment records for the mosque road - aka skype calls to middle east in net parlance.

      Now since ISPs wouldn't be differentiating between traffic types, they will have no need to maintain a reliable system to track it. So the job gets harder for Govt.

  12. Spanners Silver badge
    Boffin

    Where did you get that idea?

    If I have the alternatives of being controlled by a government that might theoretically be voted out of office or a lot of increasingly large and remote corporations that there are no alternatives to - I will go for the people some of us vote for to be in control.

    Nobody votes for these big corporations. Financial success is not a sign of divine approval. It may well be a sign of hard work. It may even be a sign of selling something people want. It could also be a sign of marketing expertise, financial expertise and blind luck.

    My hope is that governments can be changed. That is what my vote is for, ISPs are not answerable to me. They are answerable to their owners.

    They also tend to act "as a pack" as several people on the news said yesterday about a different industry in the UK. They need to be controlled or else they will just do what they want to their customers...

  13. geejayoh
    Thumb Up

    Protectionism

    Adapt or die. Darwinism they called it. Phones were capable of SMS texting way before it became popular, except the telco's never really supported it, because it wasn't popular. As soon as it boomed the stuck a big price on it and started commoditising "packages" of messages.

    Technology has simply enabled the market to move on. It's time the telco's bucked the fuck up and started innovating new ways to make money, rather than relying on governments to legislate and protect their already shrinking share.

    I thought capitalism was meant to drive innovation, not stifle it? Assholes.

  14. Zippy the Pinhead

    Dear telco's do you hear me crying for you?

    Thought not...

    "Dutch telecom operators have complained that the volume of text messaging is slowing sharply because of cross-platform mobile messaging apps which allow users to exchange messages without having to pay for SMSes."

    Good.. Its super high profit for the telco's for next to no data being transferred. If anything SMS messages should just be straight data transfer fees.

  15. Fazal Majid

    The Dutch had to because their incumbent telco is one of the worst in EU

    When I ran ops for an ISP in Amsterdam, circa 1999, KPN (the incumbent PTT-era telco) was incapable of delivering even simple telephone interconnection in less than one year, and once they cheerfully announced my $100K a month 45Mbps link to the US was going to be down for 3 months.

    The arrogance, incompetence and sense of entitlement of KPN is simply breathtaking, and that's why the Dutch legislature had to nip this in the bud.

    SMS is a racket (over $80B revenues a year worldwide, compared to $10B for all of Hollywood at the box office), with utterly unjustifiable profit margins that are long past due to fall in line with actual costs, that are near zero.

  16. kain preacher

    SMS rip off.

    I can recived email to my phone for free but it cost me 30 cents per sms . Gee which one do you think I'm going to use. Which one uses more band width.

  17. Anonymous Coward
    Pint

    Principles of Net Neutrality now Law?

    Win!

    For the little guy trying to break into the market :-) Innovation is more likely with a nearly level playing field than it is with a "might is right" skewed market.

    I am sure some people will blather on about bit torrent or whatever, personally i am looking at this through an economics advantage and the more level the playing field, the better the average Joe will be in the long run.

  18. Avalanche
    Boffin

    Not about bandwidth hogging

    The problem wasn't about bandwidth hogging. Last month a recording of an investor meeting leaked, were KPN announced that they would be charging their customers for use of applications like Whatsapp, and that they used DPI to find out what applications their customers were using. Their primary motivator was that they are losing SMS revenue as people start moving to text messaging using Ping, Whatsapp, Skype etc.

    Most people feel that they pay for mobile internet, so they should be able to consume all available internet services without being charged for that use by their ISP(!) who is not actually involved with providing the service, but with moving the data packets from my phone towards the internet (and through the internet to the actual serviceprovider). To aggrevate the matter, the fact that KPN (and vodafone!) snooped on customer traffic to see 1) what they are doing and 2) if they can block or charge for the service wasn't well received. This led to a general outcry of the public and an offensive by Dutch IT professionals, nerds and privacy activists to get net neutrality into law.

  19. John Smith 19 Gold badge
    Happy

    Crazy Dutch guys.

    They are crazy.

    and here are a few more.

    http://www.youtube.com/watch?v=hRqAOyXL15Q

    This does deserve some thoughtful well considered comments and serve as a reminder that policy *can* be changed by concerted education and action.

    But I just can't be asked.

  20. Roger Mew

    France

    Hmmm I can see France adopting THAT, oh well now ALL ISP's need to realize that a IP hide facility is going to bring thems that do go that way loads of business. As it is I use OpenDNS which France Telecom cannot see the input and when local people in the Netherlands realise tat they can get a few quid a year that is untraceable for allowing someone to use a virtual server in their country the authorities here in France and other places, may realise lost revenue to be taxed AND total loss of internet control.

  21. Hassene Akkeri
    Stop

    The sum of all fears

    Net Neutrality is a very dangerous topic that must be considered with less passion and more pragmatism.

    Most of the operators are held by private investors. They invest in network infrastructure and sell services that are supposed to give them decent ROI. I'm afraid the Net Neutrality joint to the boom in Mobile Broadband traffic will lead to the bankruptcy of the liberal telecom market model. Then we go back to the minimum servicing Post and Telegraph Telcos.

    The unpredictable and surprising growth of the mobile broadband traffic has surprised most of the mobile operators. In fact, the radio technologies, even HSPA+ and LTE appeared as incapable to satisfy the new capacity requirements. Operators all over the world are seeking for smart ways to offload the broadband traffic from wireless to fixed-line through Femtocell and Wifi in order to release their networks and their pockets.

    Furthermore, network suppliers are working on new architectures that will revolutionize the wireless networks by relying most of the load on wireline networks and deliver the switching and service functions on cloud computing datacenters. The goal is also to release the expenditures and propose more flexible and scalable solutions to the suffering operators.

    So, calling for Net Neutrality on the Wireless field will be like a death sentence to the MNO business. Imagine that the statistically planned radio networks get flooded by P2P file sharing, video and skype traffics. Under a crisis situation, operators will either continue spending more and more on capacity upgrades; which will exhaust their budgets and decrease the profitability of their business without even solving the problem. Or, they will join hands to lobby for raising prices and finding new ways to charge more, not only end users but also content houses (facebook, google, why not?). Because with Net Neutrality and without one of these two solutions, MNOs will just hit the wall.

    For fixed-line the picture is not less dark. In fact, for business balance purpose, the fixed-line broadband networks have always been built considering statistical traffic planning and estimation. Yet, if Net Neutrality is imposed, P2P file sharing and video traffic will overtake huge parts of the bandwidths, compromising HTTP, SLA professional services and so on. What should the operator do is even rougher than Wireless in somehow. There will be a whole chain of land gears to upgrade or swap: from access to aggregation switches to the backbone. Even without Net Neutrality, wireline operators cannot afford the traditional flat rate price packaged Internet (type 30$/month) and they're even lobbying to charge the content providers such as Facebook and Google (yes, lion is being grabbed by its tale for business necessity!). And the irony is that they accepted to negotiate.

    Net Neutrality is an ethical concept that can be considered as a citizen right in some point of view. However, the telecom market has been liberalized since at least a decade allover the world; and network operators act under a license contract and serve under pragmatic business plans. Net Neutrality is a critical variable that can compromise the whole business profitability. It must be present in the license conditions and contract as a clear clause. I'm saying so while being sure that if this happens, no investor will bother to buy telecom operation license, and we will see the PTT Telco model reestablish again in many markets.

    If governments insist to apply the Net Neutrality, network operators will most probably lobby together and raise the prices in an extraordinarily way, and here end user will neither enjoy neutrality nor keep the advantageous flat rate prices.

    I'd like also to look at the story from another angle. As has been reported in this website, there is more and more proofs that radio waves, precisely the case of mobile handsets, cause cancer, brain problems and nervous diseases. This is still a shy news until now, but it will develop and may cause serious economic crisis later. Joining the Net Neutrality squizz job to the health concerns to the difficulties in keeping steady business models will threat in a very dangerous way the telecom operators and the whole telecom industry. And therefore the risk of a more serious financial crisis has to be considered.

    1. david wilson

      @Hassene Akkeri

      >>Imagine that the statistically planned radio networks get flooded by P2P file sharing, video and skype traffics. Under a crisis situation, operators will either continue spending more and more on capacity upgrades; which will exhaust their budgets and decrease the profitability of their business without even solving the problem. Or, they will join hands to lobby for raising prices and finding new ways to charge more, not only end users but also content houses (facebook, google, why not?). Because with Net Neutrality and without one of these two solutions, MNOs will just hit the wall."

      Surely, with limited available bandwidth, if demand is too high at a low price or at a flat rate, they'll just have to set prices high enough to throttle demand and/or move away from flat rate charging?

      Whether a network is neutral or not doesn't necessarily make a huge difference to the issue of too much traffic and not enough capacity - maybe for a given amount of traffic, some non-neutral scheme could actually provide a generally better experience, but it's still really tweaking rather than making radical changes.

      Personally, I don't see what's so 'advantageous' about flat rate charging - for a given overall profit in the telecoms company, ultimately it means that some users end up subsidising others, and likely it means that a minority of very heavy users are subsidised by a majority of lighter users.

      From the provider's point of view it might be advantageous to have flat rate charging to lure people to move into mobile data usage in the first place, but once there are enough users who are unlikely to stop, a less-flat system might be more desirable, whether a direct charge per MB, or some banded system like phone contracts..

      If a banded system is better for the average user, once there are enough 'average' users - the ones who on a flat-rate system end up subsidising the heavy users, the providers can afford to concentrate on them and risk upsetting the heavier users.

      If you can get the less-profitable customers to leave, or charge them enough for them to be worth having, you don't have to worry about precisely what their traffic is.

  22. Hassene Akkeri

    Flat rate and Neutrality

    Flat rate charging was one of the main reasons of the success of Internet. It provides also a suitable field for innovating and for economical growth. I believe it's an important advantage that should be jealously defended by end users.

    The fact now is that both in fixed-line and in wireless, network operators are facing business model dilemmas obliging them to abandon the flat rate pricing. Many of them are starting charging more if the MB consumption bypasses a defined threshold. France Telecom and others are even discussing with content providers such as Facebook and Google to charge them for delivering their services through their infrastructures. And so on.

    And it is obvious that many end users and citizens all over the world are very upset about this roadmap that will take away the so advantageous flat rate "right".

    As I said before, applying Net Neutrality will accelerate and boost this process of business model reform and will not only end the flat rate era, but will also push the network operators to lobby for price increasing. Other solutions may also be foreseen, including merges and partial activity abandoning.

    Net Neutrality is supposed to defend end users interest. Whether its triggered effects will have the foreseen result, I sincerely doubt. But I also admit that it is a complex subject that needs deep thinking.

    1. david wilson

      @Hassene Akkeri

      >>"Flat rate charging was one of the main reasons of the success of Internet."

      Pretty much as soon as broadband was available, pricing models here seemed to have bands in them - 'unlimited' was really always effectively a high band with unstated/threatened limits, and flat rate for mobile only *ever* looked like a 'while stocks last' offer.

      >>"It provides also a suitable field for innovating and for economical growth."

      I'm sure flat rate charging for electricity would provide a suitable field for all kinds of 'inventions', but non-flat-rate charging does seem likely to result in slightly fewer completely crap inventions managing to make it, not to mention likely fewer electrical fires.

      >>"I believe it's an important advantage that should be jealously defended by end users."

      How does a customer 'defend' getting something if supplies are limited, other than by being prepared to pay more?

      >>"And it is obvious that many end users and citizens all over the world are very upset about this roadmap that will take away the so advantageous flat rate "right"."

      If they're people who couldn't see /without/ a map that unlimited had a likely time limit on it, then I guess they'll have to get upset without my sympathy.

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