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.