6 ms·

EU to Telecoms companies: Try charging Google and we’ll take action

86 points by ukdm 17y ago

Zak 17y ago
I don't understand the argument the telecoms are trying to make here. On the ISP side, the end user has already paid for the bandwidth. Google, or anyone else they're engaging in data transfer with has also paid some network operator for bandwidth. Said network operators have some sort of peering agreement. Under what theory could it possibly be fair to charge Google at both ends?
- etherael 17y ago
  "We hear you have money, we'd like it."
  - barredo 17y ago
    Why charge once for the service when you can charge twice?
- ugh 17y ago
  That’s the strange logic of ISPs. They basically don’t want to be reduced to dumb pipes because that’s low margin and not really a very exciting business model. I guess in their dreams they would charge content providers (“You want to get your content to our customers? Pay!”) and they would also charge customers based on the content they want to see (“You want access to content from this one content provider? Pay!”). Now you pay only for bits, whether it’s a bit from aunt Annie or YouTube doesn’t really matter. Let’s hope it stays that way.
  - pierrefar 17y ago
    Dumb unexciting business models can still be very profitable. For example: toll booths on highways.
    - axod 17y ago
      In the EU (At least in the UK), you have vast competition amongst ISPs with everyone undercutting everyone else. There's probably around 100 ISPs I could choose from to get my ADSL line from. I think the toll booth would fit in more with some US areas where there's only 1 ISP available (AFAIK).
      - loikujhygthj 17y ago
        But they all buy the ADSL access from BT and are basically just billing operations - if BT chooses to implement a pay per content they will have to pass that on. If you have a cable connection then it's probably owned by Sky (murdoch) already.
        DrJokepu 17y ago
        That's not quite true - all they buy from BT is the "last mile" between the telephone exchange and the customer end point. Everything else is on the ISP's own (or rented) infrastructure.
        loikujhygthj 17y ago
        True, all they rely on BT for is the bit that's completely impossible for them to get anywhere else or duplicate.
        loikujhygthj 17y ago
        True, all they rely on BT for is the bit that's completely impossible for them to get anywhere else or duplicate.
        deleted 17y ago
        [deleted]
        electromagnetic 17y ago
        Actually they're completely free to create their own last-mile connections, most simply choose not to and try to irk out their living being the middle man.
  - rbritton 17y ago
    The cable and satellite TV companies are the closest comparison I can think of for an existing example of their dream model. And guess what? The experience is miserable for everyone except those raking in the money.
- kierank 17y ago
  Google, or anyone else they're engaging in data transfer with has also paid some network operator for bandwidth. Google has no-charge peering agreements with the companies which are complaining. Google's traffic is so vast that a major carrier which doesn't peer with Google would endanger other high-volume peering agreements or (less likely) pay more in transit charges to reach Google. Tier 1 carriers play this game amongst themselves all the time except Google is different since it's main business isn't being a telecom carrier. In this instance Google is well known and making money out of the web and old incumbents think it's their money. None of the old incumbent telcos want to reach the stage of Cogent (think Ryanair for internet transit) where they are just dumb pipes.
  - ugh 17y ago
    That’s interesting! Can’t they bring that up the next time they discuss their peering agreement with Google? Would they really stand no chance of negotiating a better deal – even if enough of them work together? And why are they making this particular argument they are making now and don’t demand something which might sound more reasonable like regulating the market of peering agreements or something?
    - kierank 17y ago
      And why are they making this particular argument they are making now and don’t demand something which might sound more reasonable like regulating the market of peering agreements or something? They are making this argument because Google is an easy target. Tier 1's have complained about low cost pricing from Cogent for a while now but complaining about a company few have heard of doesn't make headlines. They don't demand peering regulation because I think they want to avoid the complex system of termination fees and special rules for smaller carriers etc. that regulation of the phone system brought. Peering works well; Google delivers traffic on a carrier-scale and other carriers will just have to accept it.
  - illumin8 17y ago
    I always find it extremely humorous when some bean-counter working at a telco looks at a peering agreement like this and says "Holy crap! We're delivering their packets for free! We should be charging them money!" The reality is that having a peering agreement with Google saves that telco a ton of money. If they didn't have the direct peer with Google, one of their other Tier 1 peers would have to provide it to them, which would surely change the terms of their peering agreement (cost them $$$). What's more, if you can get traffic from a peer for free that is destined for an endpoint on your network, you ALWAYS want to take it. After all, you'll have to deliver the traffic anyway; better to get it for free than to pay someone else to transit it for you. This is what happens when accountants try to understand how BGP works.
- aphistic 17y ago
  The other part I don't understand is how the telecoms think they're actually going to get Google to pay this in the first place. If they tell Google they won't carry the Google traffic over their connections if they don't pay (sounds a bit like blackmail?) I'm sure Google would just say "Ok, see you later!". The telecoms that do that would just end up losing customers because really, who would want a connection that's either: a) filtered in general or b) filtered from Google traffic?
  - josefresco 17y ago
    While I tend to agree, that tactic can backfire if the ISP's get together and present a unified front. If Google is only avail on 1/5 of the major ISP's, Yahoo or whoever pays up will see a crapload of new business. It's much easier for an end user to simply switch to using Yahoo! than to switch ISP's (for example I basically have no other choice for high speed other than Comcast)
    - ErrantX 17y ago
      Google is so ubiquitous to people's web use now it would only take one to not join the filtering for the idea to collapse. XYZ ISP would have a killer selling point ("we have Google!") and would almost certainly make a killing...
      - ugh 17y ago
        Honestly sounds like some sort of regulation is necessary, maybe? (– edit: could you please explain why that seems wrong or like a trollish comment to you?)
        Zak 17y ago
        I didn't downvote your comment, but I'll explain why I (and most likely others here) think it's wrong. Blocking access to Google services would be suicide for an ISP. Customers would leave for other ISP's if they could, and sue for false advertising (you said it was internet access, not "Comcast's private network" access!) if they couldn't. Google has already made it clear they won't pay ISPs to carry their traffic, so any attempt to collect fees would effectively result in a block. The market has solved this problem already; adding regulation would simply create more work for lawyers.
eelco 17y ago
Aah, Neelie Kroes, the person who gave Bill Gates both a honorary doctorate and a €500 million fine. (http://en.wikipedia.org/wiki/Neelie_Kroes http://en.wikipedia.org/wiki/Neelie_Kroes)
- axod 17y ago
  FWIW, the fine was to Microsoft, not Bill Gates.
  - eelco 17y ago
    Yes, but it's close enough to the truth and a better story.
- anigbrowl 17y ago
  I <3 Neelie Kroes. She's the first EU competition commissioner I've seen that takes her job seriously, rather than paying lip service in public while being a tool of whichever national government wants protection for their special industry. In the US most people only hear about her when she slaps a big fine on an American company, but she's been making a lot of waves in the EU for actually walking the walk instead of just talking the talk. The Economist has covered her extensively, with a sort of disbelieving awe.
acg 17y ago
Operators remain worried that they will offer no more value than an ISP.
snippyhollow 17y ago
AFAIK, in France, dailymotion already pays providers to have the right to exist on the networks (Orange, Free ...). Youtube doesn't... :)
ggordan 17y ago
It seems that since last year, a lot of companies are trying to cash in on Googles success. I'm always curious, why is it only Google that they want to charge? Sure, Google has the biggest presence online. But I'm sure other companies are not far behind. Facebook being one of them, especially in terms of bandwidth usage.
- Calamitous 17y ago
  They may be waiting to see if Google can be rolled. If that happens, the floodgates will open.
richcollins 17y ago
The need for gov't intervention is symptomatic of a lack of competition. This is the issue that should be addressed. In a competitive market, an ISP wouldn't be able to pull this off because its customers would revolt if services that they cared about weren't there.
kez 17y ago
Somewhat confused arguments here, given that Google has started an initiative to make the web faster (through reducing file sizes and HTML cruft): http://code.google.com/speed/articles/ http://code.google.com/speed/articles/
ErrantX 17y ago
I can actually see how it would be in Google's interest to consider investing in areas where the network is, say, "sub par". Legal action doesn't seem like a conducive way to encourage that idea....
bond 17y ago
So they overcharge the users and that's not enough, so now they want a piece of Google? Right...
lolamo 17y ago
Companies want to play being a broker all the fuckin time.
billybob 17y ago
The ISP position is brain-dead. They say that services like Youtube are unfairly saturating their pipes and not compensating them. Nevermind that access to things like Youtube is exactly what CREATES demand for internet service. You think people are paying for broadband so they can send emails faster?? What they're saying to Google is "if you don't stop creating so much demand for our connections, we're going to go out of business!" Which can be simplified to, "we don't charge enough to cover our costs!" Which is either false (likely) or indicates that they're incompetent. But it's nobody else's fault, least of all the fault of services that ISP customers are paying to access.

86 points by ukdm 17y ago

Zak 17y ago

I don't understand the argument the telecoms are trying to make here. On the ISP side, the end user has already paid for the bandwidth. Google, or anyone else they're engaging in data transfer with has also paid some network operator for bandwidth. Said network operators have some sort of peering agreement. Under what theory could it possibly be fair to charge Google at both ends?

etherael 17y ago
"We hear you have money, we'd like it."
- barredo 17y ago
  Why charge once for the service when you can charge twice?
ugh 17y ago
That’s the strange logic of ISPs. They basically don’t want to be reduced to dumb pipes because that’s low margin and not really a very exciting business model. I guess in their dreams they would charge content providers (“You want to get your content to our customers? Pay!”) and they would also charge customers based on the content they want to see (“You want access to content from this one content provider? Pay!”). Now you pay only for bits, whether it’s a bit from aunt Annie or YouTube doesn’t really matter. Let’s hope it stays that way.
- pierrefar 17y ago
  Dumb unexciting business models can still be very profitable. For example: toll booths on highways.
  - axod 17y ago
    In the EU (At least in the UK), you have vast competition amongst ISPs with everyone undercutting everyone else. There's probably around 100 ISPs I could choose from to get my ADSL line from. I think the toll booth would fit in more with some US areas where there's only 1 ISP available (AFAIK).
    - loikujhygthj 17y ago
      But they all buy the ADSL access from BT and are basically just billing operations - if BT chooses to implement a pay per content they will have to pass that on. If you have a cable connection then it's probably owned by Sky (murdoch) already.
      - DrJokepu 17y ago
        That's not quite true - all they buy from BT is the "last mile" between the telephone exchange and the customer end point. Everything else is on the ISP's own (or rented) infrastructure.
        loikujhygthj 17y ago
        True, all they rely on BT for is the bit that's completely impossible for them to get anywhere else or duplicate.
        loikujhygthj 17y ago
        True, all they rely on BT for is the bit that's completely impossible for them to get anywhere else or duplicate.
        deleted 17y ago
        [deleted]
        electromagnetic 17y ago
        Actually they're completely free to create their own last-mile connections, most simply choose not to and try to irk out their living being the middle man.
- rbritton 17y ago
  The cable and satellite TV companies are the closest comparison I can think of for an existing example of their dream model. And guess what? The experience is miserable for everyone except those raking in the money.
kierank 17y ago
Google, or anyone else they're engaging in data transfer with has also paid some network operator for bandwidth. Google has no-charge peering agreements with the companies which are complaining. Google's traffic is so vast that a major carrier which doesn't peer with Google would endanger other high-volume peering agreements or (less likely) pay more in transit charges to reach Google. Tier 1 carriers play this game amongst themselves all the time except Google is different since it's main business isn't being a telecom carrier. In this instance Google is well known and making money out of the web and old incumbents think it's their money. None of the old incumbent telcos want to reach the stage of Cogent (think Ryanair for internet transit) where they are just dumb pipes.
- ugh 17y ago
  That’s interesting! Can’t they bring that up the next time they discuss their peering agreement with Google? Would they really stand no chance of negotiating a better deal – even if enough of them work together? And why are they making this particular argument they are making now and don’t demand something which might sound more reasonable like regulating the market of peering agreements or something?
  - kierank 17y ago
    And why are they making this particular argument they are making now and don’t demand something which might sound more reasonable like regulating the market of peering agreements or something? They are making this argument because Google is an easy target. Tier 1's have complained about low cost pricing from Cogent for a while now but complaining about a company few have heard of doesn't make headlines. They don't demand peering regulation because I think they want to avoid the complex system of termination fees and special rules for smaller carriers etc. that regulation of the phone system brought. Peering works well; Google delivers traffic on a carrier-scale and other carriers will just have to accept it.
- illumin8 17y ago
  I always find it extremely humorous when some bean-counter working at a telco looks at a peering agreement like this and says "Holy crap! We're delivering their packets for free! We should be charging them money!" The reality is that having a peering agreement with Google saves that telco a ton of money. If they didn't have the direct peer with Google, one of their other Tier 1 peers would have to provide it to them, which would surely change the terms of their peering agreement (cost them $$$). What's more, if you can get traffic from a peer for free that is destined for an endpoint on your network, you ALWAYS want to take it. After all, you'll have to deliver the traffic anyway; better to get it for free than to pay someone else to transit it for you. This is what happens when accountants try to understand how BGP works.
aphistic 17y ago
The other part I don't understand is how the telecoms think they're actually going to get Google to pay this in the first place. If they tell Google they won't carry the Google traffic over their connections if they don't pay (sounds a bit like blackmail?) I'm sure Google would just say "Ok, see you later!". The telecoms that do that would just end up losing customers because really, who would want a connection that's either: a) filtered in general or b) filtered from Google traffic?
- josefresco 17y ago
  While I tend to agree, that tactic can backfire if the ISP's get together and present a unified front. If Google is only avail on 1/5 of the major ISP's, Yahoo or whoever pays up will see a crapload of new business. It's much easier for an end user to simply switch to using Yahoo! than to switch ISP's (for example I basically have no other choice for high speed other than Comcast)
  - ErrantX 17y ago
    Google is so ubiquitous to people's web use now it would only take one to not join the filtering for the idea to collapse. XYZ ISP would have a killer selling point ("we have Google!") and would almost certainly make a killing...
    - ugh 17y ago
      Honestly sounds like some sort of regulation is necessary, maybe? (– edit: could you please explain why that seems wrong or like a trollish comment to you?)
      - Zak 17y ago
        I didn't downvote your comment, but I'll explain why I (and most likely others here) think it's wrong. Blocking access to Google services would be suicide for an ISP. Customers would leave for other ISP's if they could, and sue for false advertising (you said it was internet access, not "Comcast's private network" access!) if they couldn't. Google has already made it clear they won't pay ISPs to carry their traffic, so any attempt to collect fees would effectively result in a block. The market has solved this problem already; adding regulation would simply create more work for lawyers.

eelco 17y ago

Aah, Neelie Kroes, the person who gave Bill Gates both a honorary doctorate and a €500 million fine. (http://en.wikipedia.org/wiki/Neelie_Kroes http://en.wikipedia.org/wiki/Neelie_Kroes)

axod 17y ago
FWIW, the fine was to Microsoft, not Bill Gates.
- eelco 17y ago
  Yes, but it's close enough to the truth and a better story.
anigbrowl 17y ago
I <3 Neelie Kroes. She's the first EU competition commissioner I've seen that takes her job seriously, rather than paying lip service in public while being a tool of whichever national government wants protection for their special industry. In the US most people only hear about her when she slaps a big fine on an American company, but she's been making a lot of waves in the EU for actually walking the walk instead of just talking the talk. The Economist has covered her extensively, with a sort of disbelieving awe.

acg 17y ago

Operators remain worried that they will offer no more value than an ISP.

snippyhollow 17y ago

AFAIK, in France, dailymotion already pays providers to have the right to exist on the networks (Orange, Free ...). Youtube doesn't... :)

ggordan 17y ago

It seems that since last year, a lot of companies are trying to cash in on Googles success. I'm always curious, why is it only Google that they want to charge? Sure, Google has the biggest presence online. But I'm sure other companies are not far behind. Facebook being one of them, especially in terms of bandwidth usage.

Calamitous 17y ago
They may be waiting to see if Google can be rolled. If that happens, the floodgates will open.

richcollins 17y ago

The need for gov't intervention is symptomatic of a lack of competition. This is the issue that should be addressed. In a competitive market, an ISP wouldn't be able to pull this off because its customers would revolt if services that they cared about weren't there.

kez 17y ago

Somewhat confused arguments here, given that Google has started an initiative to make the web faster (through reducing file sizes and HTML cruft): http://code.google.com/speed/articles/ http://code.google.com/speed/articles/

ErrantX 17y ago

I can actually see how it would be in Google's interest to consider investing in areas where the network is, say, "sub par". Legal action doesn't seem like a conducive way to encourage that idea....

bond 17y ago

So they overcharge the users and that's not enough, so now they want a piece of Google? Right...

lolamo 17y ago

Companies want to play being a broker all the fuckin time.

billybob 17y ago

The ISP position is brain-dead. They say that services like Youtube are unfairly saturating their pipes and not compensating them. Nevermind that access to things like Youtube is exactly what CREATES demand for internet service. You think people are paying for broadband so they can send emails faster?? What they're saying to Google is "if you don't stop creating so much demand for our connections, we're going to go out of business!" Which can be simplified to, "we don't charge enough to cover our costs!" Which is either false (likely) or indicates that they're incompetent. But it's nobody else's fault, least of all the fault of services that ISP customers are paying to access.