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O2 UK Warns of High Mobile Broadband Costs and End to Net Neutrality

Posted: 05th Nov, 2010 By: MarkJ
best o2 uk broadband logoMobile operator O2 has joined a chorus of other broadband ISPs, such as BT Retail, TalkTalk and Vodafone UK, in calling for the "big" online content providers (e.g. Skype, BBC, Facebook or Google etc.) to pay for the privilege of being available with a good quality of service to customers of their Mobile Broadband and fixed line platforms.

At present many UK ISPs already restrict broadband traffic to certain services (e.g. P2P, video streaming etc.), or more generally during peak usage periods, as a means of balancing the load on their networks and giving everybody a reasonable service. This is now a normal and accepted practice.

However the real debate is not with network management solutions but the potential for harm that could occur if ISPs start favouring content sources based on who pays them the most cash. Such a move would completely abandon the principal of Net Neutrality, which seeks to treat all internet traffic as equal.

O2's CEO, Ronan Dunne, told yesterdays Westminster eForum ( ZDNet ):

"If consumers alone are paying, it's hard to see where the incentive is for content providers to use networks efficiently. Networks can't under any economic model presume to have unlimited data capability. Part of the solution is to move away from 'one-size-fits-all'."

Dunne went on to point out that the current explosion in data usage had driven costs up and was creating, "more demand than [O2] can handle." However if O2 had imposed more reasonable usage allowances earlier on and not gone down the "unlimited" path to begin with then it's likely that they'd be better equipped to handle today's load.

We certainly agree that consumers who use a lot of data should also be helping to pay their fair share, just like with your gas, water or electricity supply. However this approach is fraught with difficulty and nobody wants to lose a significant slice of their established customer base.

Never the less the idea of charging content providers, the very people who actually make us want to use the internet in the first place, is growing in popularity among the big mobile operators and ISPs. Ofcom is currently reviewing the issue but isn't expected to take any action that would prevent O2's proposal from happening, except for demanding more transparency on Traffic Management measures (e.g. clearer Fair Usage Policies).

It's worth remembering that there are literally thousands of major mobile and fixed line broadband providers around the world. Imagine what would happen if even a small portion of those started demanding cash from firms like Skype, whose profits aren't exactly vast.

That kind of money grab would be contagious among larger operators, with all wanting a slice of the same pie, yet an utter failure to see the other side of the fence could conceivably bankrupt many popular services and make the internet experience far less rewarding. Content providers have costs too.

In separate news, but at the same eForum, Virgin Media once again said that it had no plans to offer wholesale access to its cable network. Several UK ISPs have in the past called for an alternative to BT as the only major national operator they could do business with, although Virgin has no interest in assisting. That's a shame, although in fairness Virgin Media have always been commercial, while BT's network owes a lot to its publicly funded roots.
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