Mobile Networks Want Apple, Facebook, Google, To Pay For Bandwidth

[engine]

Mobile Networks Want Apple, Facebook, Google, To Pay For Bandwidth [bloomberg.com]

Google Inc., Apple Inc., and Facebook Inc. need to pitch in to help pay for the billions of dollars of network investments needed for their bandwidth-hogging services, European phone operators say.

As mobile and Web companies add videos, music and games, operators including France Telecom SA, Telecom Italia SpA and Vodafone Group Plc want a new deal that would require content providers like Apple and Google to pay fees linked to usage.

“Service providers are flooding networks with no incentive” to cut costs, France Telecom Chief Executive Officer Stephane Richard said last month. “It’s necessary to put in place a system of payments by service providers as a function of their use.”

[Sierra_Dad]

As expected, Mobile Operators are generally not in favor of net neutrality.

[GaryK]

I'm sure I don't fully understand net neutrality.

Surely there are massive costs involved to build the infrastructure that's required to support the huge amount of bandwidth being pumped-out by mobile and web companies?

Who is supposed to shoulder the financial burden of those costs?

[weeks]

Gary has a good point.

But I cannot for the life of me figure how to make that work. The carriers have no leverage. FB doesn't pay, so they're going to, what? They'll make their users angry if they downgrade the service of the popular sites. That's why people bought the service and the gizmos.

The users should pay the carriers for the service they use. If the carriers can't get their users to pay. Well, sorry, close up shop or make less money or shut up.

If they need someone to explain it to them, call anyone at AOL.

[briggidere]

I thought I was paying for this sort of service by paying my monthly fee which includes the data. I'm being charged for it, how can they charge someone else as well? If they start charging Google et all, they have to charge every site on the web.

If it's not cost effective, raise the data prices, simple.

[Sierra_Dad]

Your thoughts echo mine.

The telecoms used to have it so easy. They could charge 10c per text message and charge you separately for every little feature you enable on the feature phone they gave you free with a two year contract.

Yes, Google, Apple and/or Microsoft are causing the growth of the Mobile web. They should be grateful for the business they are getting because of it.

Perhaps they thought they could make money with unlimited data plans too, till users actually started *using* the bandwidth with the advent of the smartphones.

[bird]

Coming soon to a theater near you:
*Libraries will demand money from publishers because storing their books requires such sturdy shelfes.
*Toll road operators will bill the car manufacturers for the space taken up by their products.
*Glass manufacturers will sue rock quarries in compensation for all the stones thrown into windows.
*etc.

[jecasc]

What rubish is that? Charge your customers, these are the ones downloading the videos, mp3, music and games.

If the flatrate fees don't cover this, maybe they should raise them.

Surely there are massive costs involved to build the infrastructure that's required to support the huge amount of bandwidth being pumped-out by mobile and web companies?

Videos and other content is only transfered upon request of a user, and its the user who should pay for the bandwith.

[piatkow]

So basically the networks want bribes from the sites their customers want to access in order to pass on the traffic that they have already been paid to support.

[yaix2]

Why don't they just charge their clients, the consumer? Eventually, the end user will pay the bill anyway, but that way the net would stay neutral. Stupid mobile operators.

I honestly do not understand why on earth they would even ask the content providers to pay for it. It just makes everything more complicated. Why not simply ask their clients to pay for their consumption the prices that cover cost and earnings, like every other business does?

Glass manufacturers will sue rock quarries in compensation for all the stones thrown into windows.

I like this idea, though. xD

[maximillianos]

They do charge their clients, the consumer. Already many mobile carriers are no longer offering unlimited data plans. ATT is one example.

Double charging the websites and consumers is not a solution, it is greed.

Plus can you imagine every mom an pop website having to pay their ISP, then pay every possible wireless carrier their website visitors may be using? It is a ridiculous idea.

[edited by: maximillianos at 2:37 pm (utc) on Dec 9, 2010]

[Rosalind]

I honestly do not understand why on earth they would even ask the content providers to pay for it. It just makes everything more complicated.

They ask because asking for money is always worth a try, no matter how absurd their justification might be. There are always people who don't understand the technology who might be convinced to argue for legislation in their favour.

I think this would be an appropriate time to suggest a PLR-style system of compensation for webmasters from the mobile operators. They benefit from our content because it attracts customers to their smartphones, so it's only right that we should be recompensed proportionately.

[idolw]

I thought I was paying for this sort of service by paying my monthly fee which includes the data. I'm being charged for it, how can they charge someone else as well?

Pretty much like magazines charge readers and advertisers.

[C7Mike]

So the telecoms are wanting the big consumers to pay for the high capital outlays of developing a larger data transmission infrastructure?

Looks like some telecoms got out-negotiated and are wanting to find a way around their agreements.

[ember]

The analogy that magazines charge readers and advertisers does not quite fit. It would more like if a magazine charged readers and the publishers of the content in the magazine.

The carriers should be grateful for the content since it increases their customer base, and the ones who want to see the content, i.e.gamers, etc., should be the ones to pay for it.

[weeks]

Looks like some telecoms got out-negotiated and are wanting to find a way around their agreements.

As someone who had what looked like a beautiful biz plan turn ugly in the hard light of reality, I can appreciate their point of view. "Well, we built it, people are using it, so where's the money? Hey, you! Gimme some money!"

Has anyone who put up a website not had this thought?

[albo]

Re net neutrality: Mi esposa pointed out, that when the customer wants ketchup at the grocery, the ketchup company pays the grocer for shelf space, and the customer pays for the ketchup. But my retort is, the ketchup company charges the customer for the ketchup plus the shelf space, and the grocer charges the customer for the ketchup company's price and then another cut. So, the grocer is charging both the customer and the ketchup company: double dipping, no? Same as Comcast charging the website for content served.

[Sierra_Dad]

They ask because asking for money is always worth a try, no matter how absurd their justification might be. There are always people who don't understand the technology who might be convinced to argue for legislation in their favour.

Yes, that's the strategy. You can try to make money by providing value that other people will pay for, or you can try to get the law changed in your favor so that money flows your way.

It's also the strategy of those hoping to get rich running a carbon credit exchange.

[Sgt_Kickaxe]

I'd rather see mobile just block sites that use too much bandwidth. The alternative of (eventually) reaching into my pocket to pay for it is not welcome. I don't use those sites very often.

[Sierra_Dad]

I'd rather see mobile just block sites that use too much bandwidth.

Because that's the site's fault how? Isn't a user who is going to that site actually using the bandwidth?

The alternative of (eventually) reaching into my pocket to pay for it is not welcome. I don't use those sites very often.

You don't use Google or Facebook often, or you don't use any site that has video, audio, images, or downloads?

What happens is likely to be in your favor. Unlimited bandwidth plans are a passing fad. You can probably keep your current rate by agreeing to a small amount of monthly bandwidth, while others will go to a 'premium' plan.

I don't have any data plan myself. I'm sure they are great for the person on the go, but that's not me.

[ByronM]

what the hell are mobile networks doing wrong that they can't profit from mobile internet? They're charging at least 10.00 per gig in most cases and billing for 2 year contracts. I don't get it... scam of the century if you ask me.

[graeme_p]

@gary, what happens now is fine:

1) customers pay for their connection and bandwith usage.

2) "Content providers" pay for their connection and bandwith usage.

@albo, suppliers paying retailers for shelf space is not good for consumers and should be banned too.

[GaryK]

@graeme Who pays for the fiber, routers, switches, electric, labor and other stuff? Cause I suspect that's where the truly major costs are.