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Euro carriers try again to have Apple, Facebook share costs

updated 03:15 pm EST, Wed December 8, 2010

Euro providers want Apple, more to pay for traffic

European cellular carriers have reiterated calls for content providers like Facebook and device makers like Apple to shoulder the costs of traffic on their networks. The CEO of Orange's parent company France Telecom, Stephane Richard, recapped his view at the LeWeb conference today that it was unfair carriers had to pay for investments to handle the load for the iPhone or a website but wasn't collecting any extra revenue from the traffic. Heavy data use was "good news" but has prompted questions about business models, including the decision to cap bandwidth, Richard said with Bloomberg in attendance.

Other providers, such as Telecom Italia and Vodafone, have previously floated the prospects of charging these companies themselves.

Internet access on cellular links typically costs more to manage since only a limited amount of wireless bandwidth is available.

Most of the concern is believed to stem from the carriers' fears that they will inevitably become "dumb pipes," or simply conduits for others' traffic, much as wired Internet providers are today. Many are still attached to models originally conceived in the late 1990s or early 2000s where they were often in exclusive control of what customers could see. Requiring payment for access would return to this business model by letting carriers specialize and determine which sites customers could visit or which unlocked devices were allowed to use the network.

Critics, including video host Dailymotion, have countered that many of the sites are already paying for Internet access, including paying backbone providers and making peering arrangements. Many backbone providers already have arrangements with carriers that factor in these costs and would effectively lead to carriers 'double dipping' by charging twice for the same costs. The firms also already pay steep percentages for their networks, ranging as high as 40 percent for Dailymotion.

Apple may have nonetheless stoked carrier fears with a rumored and still unconfirmed attempt to use embedded SIMs in iPhones. Combined with the lack of an extra access fee, it would have saved customers from having direct contact with the carrier for anything but technical support and cancelling service, since activations could take place at home. Carriers often insist that they control the relationship with the customer rather than let users focus on the quality of the phone.

A change in this direction may be inevitable on its own, as a proposed embedded SIM standard could let virtually all phones activate without talking to the carrier.

By Electronista Staff


  1. PBG4 User

    Senior User

    Joined: Feb 2001


    Oh Noes!!!!

    People are actually using what they bought and we aren't making as much money as before! Wahhhh!!!! *rolleyes*

  1. Salty

    Professional Poster

    Joined: Jul 2005


    Holy Bull c***!

    I'm sorry but what are those data plans people keep paying for? Maybe they can take some of the money they charge people for txting even though it costs them nothing extra to provide that service? Or how about things like charging for call display? Carriers are constantly looking to s**** over their customers with random little charges. If you don't want the iPhone on your network, cancel your contract with Apple, I'm sure someone else will come along to pick it up in your area and make a boat load of cash.

  1. chippie

    Fresh-Faced Recruit

    Joined: May 2009



    Talk through your computers, it is free!!! For now.

  1. Spieguh

    Fresh-Faced Recruit

    Joined: Dec 2010



    And what about those of us paying for 3G data connections in areas that barely have a serviceable Edge network? Will I get reimbursed for all the data I pay for and don't use?

  1. Feathers

    Grizzled Veteran

    Joined: Oct 1999


    Both sides!

    Carriers want to charge those providing the data AND those receiving it? Not unusual for the likes of Vodafone to want to charge double given that their CEO famously said that texting was the closest thing to free money he had ever witnessed! I think the word I'm looking for is...scum!

  1. Tjp

    Fresh-Faced Recruit

    Joined: Jan 2010



    It is hard to believe the heads of these network providing companies think we are all idiots. But we already pay for the network bandwidth. It is a competitive market, if you need to charge more, then charge more. If you foolishly underpriced your service to gain market share, don't expect others to pay for your marketing plan that backfired on you.

    J.P. Morgan had a cool strategy. He always made a profit, when someone tried to sell below their cost for products or services, he bought all of them he could to drive the competition into bankruptcy. By buying their products. So if you under price your network services and sell at a loss, expect people to buy them up like Scottish subsidized steel in the 1980s.

    This is what happens when you think you have enough resources to "ride out the storm" and defeat your competition. So don't cry now that you lost money, raise the prices and stay alive or drop them more to gain market and die a slower more painful corporate death. But don't try to get others to subsidize your mistakes. Such a poor business decision and people see it as such. Corporations are by their nature capitalistic not socialistic. Just because your regional politics lean that way, don't expect sympathy from American or other country's companies shareholders.


  1. B9bot

    Fresh-Faced Recruit

    Joined: Dec 2008


    Euro Carriers need to there job!

    Euro Carriers need to there job, Apple is not responsible if they can't invest in there own business. Apple makes products that go onto networks, it doesn't have anything to do with the networks themselves. If Apple did, they would have already optimized the networks to carry the load. Something which the Euro carriers apparently can't handle. Euro carriers want the hot products to sell and they want Apple to cover there own costs of doing business? Come on, get real?
    Euro carriers need to cover there own DAMN COSTS and take care of there own business or get out of business!!

  1. Flying Meat

    Dedicated MacNNer

    Joined: Jan 2007


    Sounds like someone

    invested all their profits in executive salaries. :P

  1. global.philosopher

    Fresh-Faced Recruit

    Joined: Sep 2010


    Extra levy...

    once it is in place and extra infrstructure is built do you think they would then remove tis levy? I think we all know the answer to this will go into thier bank accounts.

  1. Athens

    Addicted to MacNN

    Joined: Jan 2003



    Last time I checked my phone bill I was paying for data. Give us free Data totally free data then maybe I will entertain the idea of them charging websites via usage levels. But doing both... greed.

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