By: MarkJ - 26 April, 2010 (12:02 AM)
skype logoSkype, a popular internet voice service, has retaliated over calls by some "very large telecom companies" to charge bandwidth-intensive services for the privilege of running data over their Mobile Broadband networks. The move, which goes against net neutrality, could result in other sites and services like Spotify, YouTube or possibly even Facebook falling into the same trap.

Skype's EU Government Relations Boss, Jean-Jacques Sahel, said:

"The first point is that not ‘their’ network - the Internet does not belong to anyone – it has grown thanks to more than 40,000 networks voluntarily interconnecting to form an open, decentralised network of networks. The operators making the complaints right now only carry the data for a small part of its journey around the web. The rest of the Internet ecosystem is based on a successful business model that does not and never had such subsidising of infrastructure companies by content providers. Should water companies be allowed to charge garden centres, pasta makers and coffee producers for encouraging demand for water consumption?

Second, and we think more worrying, is that this idea of charging online companies threatens the very innovation that will drive people and businesses to start using the Internet on their mobile device. In Europe and across the world there are teams of software developers creating apps and services that will drive demand for data plans sold by operators. These are not get-rich-quick-teenagers making millions of dollars every day. They are hard working small and mid-sized companies that are fighting for survival in a tough environment.

Alongside these heroes of the (mobile) Internet are thousands upon thousands of companies, big and small, who rely on the Internet to distribute their goods and services. It is an affront to ask all these engines of economic growth to pay a fee to large multinational telecommunication companies."

The issue of network neutrality is currently being hotly debated, although much of the argument to date has centred around online video and TV content. Skype highlights how it could soon just as easily extend to all sorts of other services (we've also mentioned search engines before).

It's easy to see why mobile operators in particular might be concerned because of the incredibly low prices they're charging for Mobile Broadband access in countries such as the UK. The problem is well known, with data consumption easily outstripping meagre revenue returns. This results in limited capacity and poor speeds, forcing mobile operators to restrict traffic.

Skype has also become somewhat of a natural competitor to the mobile industry because internet calling is fast replacing the old models. Cheap internet data means cheap internet calling, which is why many mobile networks in the UK (except a couple like Three (3) UK) block it.

Jean-Jacques Sahel concludes:

"The last point to stress is that mobile customers are already paying operators for Internet access. There has been a big increase in sales of data plans, thanks only to the appeal of all kinds of online content, services and applications like Skype, Wikipedia, Spotify, or Facebook.

Innovative content and app developers are the raison d’être for the mobile Internet. Without them operators would not sell a single data plan. Smart operators like 3 in the UK get this and it is proving to be a successful business for them."

It's worth remembering that services, such as Spotify, might consume data but many are not huge money spinners and remain poorly placed to afford extra costs. Big mobile operators and ISPs might have an aversion to charging consumers for what they consume but many others feel it's only fair, just like paying for your gas, electricity of water supply.

Often telecom firms who suffer the most only have themselves to blame for the mess due to a long history of unrealistic marketing promises, unsustainably low prices and "unlimited" propaganda. Killing innovation in the Internet by strangling content, much of which is free, risks being counterproductive for everybody.
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Comments: 2

asa logoxluman
Posted: 26 April, 2010 - 1:48 PM
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Net neutrality principles in the US (per FCC) recognise that rules cannot defy the laws of physics and economics. Flat rate mobile data pricing is not sustainable. There are fair ways to manage services and create market-based data packages. Check out
asa logoCarrot63
Posted: 28 April, 2010 - 3:35 AM
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Sounds like they're reading from the tedious script dreamed up by the music industry. Expect plenty of continuous whining and wailing and a party donation or two followed by a new piece of draconian legislation.

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