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?
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.
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.
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).
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.
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.
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.
Incorrect. Many of them, do buy the ADSL access from BT. But many of the only use BT for them exchange->house portion, and install their own equipment in exchanges. (Local loop unbundling).
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.
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.
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?
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.
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?
They don't have to block access to Google. They just have to make Google a tenth of a second slower. The user won't notice that much, but Google knows how many millions of dollars it loses when its pages load slower.
Or they can just remove all google's ads and replace them with their own.
This is what BT (the UK's effectively monopoly phone co) did.
The introduce a system (phorn) that monitored all your browsing and replaced the ads with ones by it's customers more targeted to your 'interests'.
It got found out when it removed all charity's ads following an earthquake and also replaced all the ads on a sesame street type kids site with ones based on the father's browsing the night before!
This was illegal but somehow the government never got round to prosecuting them - in spite of the EU telling them to.
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)
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.
The comment to which you are replying offers a bit of reasoning as to why a cartel against Google would fail even without regulation: any defectors would have a big advantage in the marketplace.
Against that, you offered an assertion without reasoning -- "some sort of regulation is necessary". Your assertion is wrapped in vaguely dismissive filler words -- "honestly sounds like" and "maybe?" -- that suggest you think your assertion is so self-evident no one could contest it.
Perhaps that's not what you meant; but the second possible reading is that you're not taking any stand at all, just repeating (5 levels deep) one contested opinion, "maybe". Either way, it's not adding info or novelty... which can draw downvotes.
A market where one market participant can, well, force other market participants to carry their content free of charge sounds to me like a failed market. That’s why I asked whether regulation might be something to counter that.
I don’t know whether it is. I don’t even know if my assumptions are correct. Maybe this is no failed market at all and it’s just normal and good that ISPs have no-charge peering agreements with Google.
Sometimes a question is just a question and not some veiled attempt at taking a stand :)
That's not what's happening here at all. While Google might or might not have peering agreements in Europe like they do here in the US. Google isn't free loading anywhere. It either pays someone to carry it's traffic from it's data center to the next ISP or it already has that infrastructure and trades bandwidth on its network for traffic on the other ISP network. Since google bought a large chunk of dark fiber, they have lots of capacity and are making a sweet deal, it seems, to other ISP which allows them to pay nothing almost nothing for bandwidth except for the infrastructure.
What these ISP want is: when one of their customers wants to access a google site, google pays them for the traffic that goes over their network.
What doesn't make sense with that is that the traffic is already paid for twice, once with the customers subscription and another time before the data reaches this particulars ISP's network. (If google peers directly with them, they have some sort of deal currently, if the google doesn't then the ISPs inbetween already have a deal with this ISP for the traffic). In effect they are trying to find a way to charge another time for something that already paid for.
I would love to see it play out like this. But it would only work in a competitive landscape, and ISPs are typically local monopolies. Which is probably why the ISPs can even consider such ideas in the first place.
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.
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.
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.
