back to article Net neutrality debate: If startups want to rival Google, they must show some green to telcos

Just a few days after new net neutrality rules were passed by the European Parliament, the CEO of Deutsche Telekom has revived fears over how "loopholes" will lead to an unequal internet. As head of one of Europe's largest telcos, Timotheus Höttges was not a big fan of efforts to make it illegal for his company to …

  1. Yes Me Silver badge

    Basic economics, is all

    The idea of "true" network neutrality – as currently championed in FCC rules in the United States – is that by not allowing differentiation, telcos would be forced to focus only on increasing network speeds and resiliency for all.

    Right, the same way as you keep adding lanes to a motorway when it keeps getting jammed up at rush hour. And an extra lane whenever an ambulance needs to get through. The economics of scarce resources is pretty much the same on the Internet as anywhere else, which the NN lobby has consistently failed to understand.

    "If they want to bring services to market which require guaranteed good transmission quality, it is precisely these companies that need special services."

    Again... basic economics that applies here as everywhere else.

    1. P. Lee Silver badge

      Re: Basic economics, is all

      No, it isn't anything like basic economics.

      This is about suppliers (organisations who provide services) consumers (those who buy ISP access) and transport companies (the ISPs).

      Now imagine that the transport companies completely control all the roads to consumers.

      Now add to that the ability of the transport companies to charge not for what they carry, but based on their perceived profitability of the suppliers.

      That is corrupt and unfair. It makes the large suppliers the ISP's real customers, not the consumers, in the same way newspapers' customers are the advertisers - the readers are the product. That is not a desirable situation for people, and people matter more than companies. In the newspaper industry, consumption of papers by consumers is entirely option. ISP services are a far more critical than reading the Sun and there is often little choice of ISP.

      1. Anonymous Coward
        Anonymous Coward

        Re: Basic economics, is all

        "Now add to that the ability of the transport companies to charge not for what they carry, but based on their perceived profitability of the suppliers."

        Some of them would probably love that :) This seems to be about DT wanting to have it's cake, eat it, have a slice of your cake, charge you for delivering the cake to you, and charge your bakery for offering cake to you as well?

    2. dan1980

      Re: Basic economics, is all

      @Yes Me

      There is one fundamental difference between adding more lanes to a road and adding more bandwidth to links, which is that there is a real physical barrier with the road, which is the availability of land. That same barrier is just not relevant when it comes to Internet links.

      Yes, increasing bandwidth may require some physical space, but it is just not comparable.

      The point is that adding more lanes to roads brings in a lot of considerations and hurdles whereas adding more bandwidth to your links is largely just about the providers investing the money.

      1. Anonymous Coward
        Anonymous Coward

        Re: Basic economics, is all

        It does become an issue when you have to lay a new path for the first time or when the path that is overloaded is an underwater cable...

  2. frank ly

    A bit like leeches

    "By our reckoning, they would pay a couple of percent for this in the form of revenue-sharing..."

    The Post Office could charge extra fees for parcel delivery based on the profits of the company sending parcels to customers.

    "This would be a fair contribution for the use of the infrastructure."

    No, a fair contribution would be to pay the standard rate, whatever that is, the same as all the other customers of the telco.

    Wasn't it the boss of another German telco, some years ago who said (paraphrasing), "I see all the money that Google makes from its internet services and I think it's only fair that we get a percentage of that".

    1. dan1980

      Re: A bit like leeches

      @frank ly

      Or, to use a popular analogy, you could charge trucks on a toll road based on the value of the goods they were transporting, rather that their weight (which is what the extra charge for trucks over cars and cars over motorbikes amounts to).

      The important consideration is that there can be no such thing as a 'fast lane' without a 'slow(er) lane'. If you have the capability to transmit at a certain speed/bandwidth then that is something you must actively be withholding from other clients. There's just no two ways about it.

    2. Only me!

      Re: A bit like leeches

      As Amazon or Facebook make no profits in the UK (honest!), how are the telcos going to make a profit out of them?

      I pay my ISP to deliver a good quality internet connection, I should not pay more for Netfix or HD or 4K. What I should pay for is an unmetered service at say 100 Meg.

      If then Netflex does not work as it does not have a big enough pipe from its ISP, then it should adjust its pipe, with its ISP. Not every telco/ISP in the world!!!!!

      1. dan1980

        Re: A bit like leeches

        @Only me!

        "What I should pay for is an unmetered service at say 100 Meg."

        Actually, here is a point - the 'unmetered' part. People in the US, however much they complain about speed, take download quantities for granted. In Australia, we have had limits since day dot.

        One might argue that download limits are not the same thing as available bandwidth and thus it costs a carrier no more for you to download 1TB than it does for you to download 1MB. This may indeed be strictly true but the missing bit is that people expect to be able to download that TB at a decent rate and that is where the problem comes in.

        You see, what download limits achieve is to limit how frequently people are downloading, which limits the amount of concurrent use in the network, which limits the bandwidth being used at any one time, which increases the speed for everyone.

        That's a generalisation to be sure but then that's exactly the point - it's something that works in aggregate.

        If you have 100GB per month, you may not necessarily spend an entire weekend streaming HD video from Netflix, whereas someone on an unlimited plan has no reason not to do that every weekend - social life not withstanding. Likewise they will torrent files (legally or illegally) and be quite comfortable running backups every day (while they're at work) of their home PCs to a cloud-based backup service.

        All this is wonderful for the user but the more subscribers doing this, the less bandwidth is available for everyone, including those who just watch a movie now and again.

        Perhaps it is just a cultural difference based on our historical experiences, but I have no problem with the concept of metered downloads and in fact I think it's a relatively fair way to structure things.

        The idea - in theory at least - is that the higher the volume of data you download, the longer you are going to be consuming the (limited) bandwidth and thus the more of an impact your will have on the speed achievable for everyone. To accommodate that while keeping speed constant requires more capacity, so the extra money from your larger plan going to the periodic upgrades to make sure capacity is keeping up with demand.

        Of course, that's naive but it's not completely ridiculous. Until recently in Australia, we had a truly excellent ISP: Internode. They were always my no.1 recommendation for personal users because they were actually a little more expensive than many others but they really did re-invest that money back into their network and so we found that overall experience with them was noticeably better than with most other ISPs.

        Now, if you are really paying the proper cost for a 0-contention line then that is another matter because you should be able to get that speed 24/7 regardless of what anyone else is doing, but the vast majority of residential services simply don't work like that and are much cheaper as a result.

  3. gerdesj Silver badge
    Paris Hilton

    Telco neutrality

    An issue you might not be aware of is "telco neutrality" (I've just made it up.) In essence: ENUM. That doesn't sound too fancy but it would allow you to call me via SIP/IAX at my nominated telephone number WITHOUT PAYING FOR A PHONE CALL.

    Let's say my home number via BT is 01935 476992 (nearly but not quite) and for non UK folk the 01935 is an area code. Now let's translate that into a internationally recognisable number: 441395476992. Drop the leading zero (a UK'ism) and add 44 for the international code for the UK. Most countries suffix 00 to that for a traditional telephone dial but some don't - see wikipedia for some of the "odd" international dialling patterns.

    Now suppose you take 441395476992 and turn it into 2.9.9.6.7.4.5.9.3.1.44.in-addr.arpa and via DNS got back "pbx.gerdes.co.uk" or "jons_sip_handset.example.net.uk" or similar.

    DNS works in two ways and in this case the ENUM bits belong to a country. In the UK this is a non starter. I've tried at the Nominet level and was told it wont happen - verbally.

    Shame really - I'm still paying for the 441395476992 identity just for an internet connection ...

    1. Anonymous Coward
      Anonymous Coward

      Re: Telco neutrality

      Completely agree, though I fail to see the Paris Hilton DNS angle? Because she's a Vixie, and has put the HIlton name up the arpa, maybe. (Ah, DNS humor...not exactly a rich seam of jokes.)

      On the other hand, DNS is getting stuffed full of gunk just because it has the ill-fortune to work really well at Internet scale. NAPTR and SRV records, you know who you are.

      Perhaps one day there will be a CX record that returns a weighted list of protocols you are prepared to be contacted over. People will look you up via a CX record and use the results to send you an email (via an MX), call you (via a SIP SRV), etc.

      1. Anonymous Coward
        Anonymous Coward

        Re: Telco neutrality

        The only advance required is tying DNS to my Google Voice phone number and having the connection activated as VoIP. If you don't get me on my tablet or desktop, you can leave voice mail which is duly transcribed and dropped in my mailbox. By accident, I discovered that actually works which surprised me no end. [Accidentally ended up talking to my father, more's the pity. Long story.]

        We've got all the pieces, time to do the Lego-block component constructions folks. The telcos are too intimately tied into the backbone to divert revenue and profits to them, more's the pity there too. Still, I'd like to see them sweat a bit (which should force them into NFV and all that Jazz).

        Then again, I'm sure it's just weed smoke driftin' here on the wind here in central California.

    2. Dan 55 Silver badge

      Re: Telco neutrality

      When was this, because supposedly the UK is one of the few countries where it's in production...

      http://enumdata.org/#44

      1. Anonymous Coward
        Anonymous Coward

        Re: Telco neutrality

        just did a search on Nominet's site for "ENUM" - zero results

        1. Dan 55 Silver badge
          Flame

          Re: Telco neutrality

          And http://www.ukec.co.uk/ which is the website for UK ENUM Consortium Limited, the organisation in charge of the enum project for the UK, just reveals a template website.

          I fear enough hoops have been jumped through so it looks good from abroad yet it's been set up just to stop people actually using it.

  4. Your alien overlord - fear me

    Wonder if the NSA has paid for a high speed 'specialist' service? Shifting all those German ministers emails,voice mails and their surfing habits must eat up bandwidth.

  5. Raumkraut

    It's only a scratch

    By our reckoning, they would pay a couple of percent for this in the form of revenue-sharing.

    A couple of percent to Deutsche Telekom, a couple of percent to BT, a couple of percent to Verizon, a couple of percent to Virgin. How many ISPs are there in the world again?

    Or perhaps he means they should pay 2% of the revenue from each customer to that customer's ISP? Which still means there needs to be infrastructure and employees to manage the incredible complexity of the resulting accounting needs. Not to mention what happens when one customer accesses the service from both their home wifi and their cellphone connection, and perhaps also from their work wifi, or at the library?

    Either way, I can see the costs of such schemes easily exceeding 100% of a small company's per-customer revenue.

    ...

    Besides which, isn't the entire point of companies like Akamai that they aggregate the "servers at every ISP" model, for smaller companies which don't have the resources or clout to do it themselves?

    1. Dan 55 Silver badge

      Re: It's only a scratch

      I honestly think the way that answer is phrased is that he think each ISP should get a bite where the company wants to do business...

      "Start-ups need special services more than anyone in order to have a chance of keeping up with large Internet providers. Google and co. can afford server parks all around the world ... small companies cannot ... If they want to bring services to market which require guaranteed good transmission quality, it is precisely these companies that need special services."

      Either he's not thought it through or he doesn't care, he just wants his bite.

      Or maybe it's an effort to make ISPs relevant when it comes to hosting again. But how would that work with the other ISPs? The company would still have to pay the Danegeld to each ISP.

      This is just one of the reasons why net neutrality was a good idea and the directive passed in the EP was a Net Bias directive.

  6. Henry Wertz 1 Gold badge

    What's going on.

    "Right, the same way as you keep adding lanes to a motorway when it keeps getting jammed up at rush hour. And an extra lane whenever an ambulance needs to get through."

    Not at all like this. For the most part, for their backbone they'll have exactly the same fiber and just put newer equipment on the ends of it.. voila, higher speeds. Same for the link to the customer (except it may be.. well, let's face it, almost certainly is.. cable or phone line or wireless instead of fiber.)

    "The economics of scarce resources is pretty much the same on the Internet as anywhere else, which the NN lobby has consistently failed to understand."

    You're failing to understand. The internet backbones are keeping up with demand; the Netflix of the world pay fully for what they use (they are not getting a freebie, they are paying for backhaul to various peering points and for the equipment and space there, just like everyone else.) The Deutsche Telekoms and Verizons of the world are charging their customers for use of their network, and for providing adequate internet connections... then wanting to double-dip and charge everyone else for what their own customers are already paying for. Pure greed.

    The talking head from Deustsche Telekom is being particularly disingenuous because they are (I assume intentionally) conflating the use of CDNs (Content Distribution networks) -- legitimate -- with the greedy double-dipping scheme these certain ISPs want. The CDN provides a useful service -- by putting CDN servers within various ISPs networks (the CDN may or may not pay the ISP) and charging whoever's providing a service for use of the CDN (lets's say video streaming), it cuts the load on the video streaming service provider's servers, it cuts the amount of internet traffic this uses, and cust the internet traffic coming in through the ISP's "pipes". In contrast, the greedy double-dip scheme provides none of these benefits and tries to charge the video streaming provider for equipment and traffic they are already charging the ISP customer for.

    Finally, I'd like to add, in a free market, this wouldn't be a problem. In the Netflix example, in those areas where Verizon is not an effective monopoly, Nextflix customers are ditching Verizon en-masse in favor of ISPs who do their job and ensure adequate internet connections instead of trying to greedily double-dip money from companies who have nothing to do with them.

  7. Wommit

    What he really means is

    Brown envelope, small unmarked, nonsequentially numbered bills, Euros preferred.

  8. Anonymous Coward
    Anonymous Coward

    Pizzo

    So what they want is their Pizzo, you know, nice bytes you have here, it would be a pitty if somebody did something to them...

    As for free market, I like it, but telcos are not subject to free market rules, there is no "free market" in telecom nor will it be free (nor in gas, water, etc).

  9. Medixstiff

    Maybe they need to be taken to court for false advertising?

    If I buy a certain advertised speed internet connection from an ISP/telco, within reason I expect to receive that speed. If they specifically throttle my connection to say Netflix, then they lied to me about receiving X speed internet service, plain and simple and I should be justified to take them to court over it because they haven't given me the service I paid for.

    1. Aedile

      Re: Maybe they need to be taken to court for false advertising?

      There is a reason why all plans say "up to"; it provides them a legal loophole. If a company really wanted to establish itself as caring about what the customer received they could publish a "never less than".

      1. Anonymous Coward
        Anonymous Coward

        Re: Maybe they need to be taken to court for false advertising?

        Except that's physically impossible to ensure, given that slowdowns can occur outside the ISP's control and there's no way the end user can tell the difference normally.

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