There is a falling out between governments & ISPs on the one hand and consumer groups and companies like YouTube and Netflix on the other. Lately more punitive measures affecting these companies and consumers have emerged that include increased throttling, greater per-usage billing and lower internet caps. The internet as whole is struggling to find a self-sustaining business model that supports the rising speed and bandwidth requirements of consumers and online media purveyors. The conflict boils down to who should pay and to what degree they should pay.
The Vancouver Sun reports on difficulties Netflix is facing in Canada. “Web-streaming movie giant Netflix is concerned about bandwidth caps and punitive overage fees charged by Internet service providers in Canada,” the Vancouver Sun reports, “These practices were reinforced by regulators this week and threaten to constrict the U.S. company’s fast-growing business here.”
Many other countries are affected by this dilemma. A consumer portal in Norway states: “The Norwegian Consumer Council strongly reacts to Telenor’s plans for charging content providers such as YouTube, VG and NRK for video content. This is in clear violation of the intentions of the network neutrality guidelines, says NCC’s Thomas Nortvedt.”
Ars Technica reported on the problems ISPs are facing. “Poor Internet providers. They have to carry all that horrible, horrible traffic from Netflix and YouTube, and they just can’t afford it anymore. Unless they start charging end users 21 percent more for Internet access, or unless they’re allowed to bill Internet companies at 3.7 cents per GB, the Internet could ‘become unusable at peak times’ due to congestion.”
Deutsche Telekom, France Telecom, Telecom Italia, and TelefÃ³nica, Europe’s four largest ISPs, commissioned a study from consultancy firm A.T. Kearney. Called “A Viable Future Model for the Internet”, it comes down to giving more money to ISPs.
“The basic argument is simple and well-known,” Ars explains, “The ISPs claim that they just can’t afford all the investment they’ve been making, and that’s it totally unfair that companies like Netflix get to make nice business on their pipes without paying their fair share.”
Note from Thom: so, uh, where’s that 65 EUR/month going to that I pay for a combined internet/landline/digital cable HDTV? I have the fastest consumer-oriented internet connection available, and I pay good money for that. Why not use that to improve your network?
Edit: damnit, why can’t we edit the thread title when we screw it up? See new thread below.
Edited 2011-02-01 23:17 UTC
The federal government is stepping in to look at what the CTRC is doing. They will be giving a binding recommendation before March 1. Either the CRTC decision will be struck down, or sent back for review.
For once, an online petition (www.stopthemeter.ca / openmedia.ca) was successful.
Maybe if they weren’t squandering their profits on C-level salaries, and trying so hard to not spend money on upgrades, and didn’t oversell/oversubscribe their existing networks, they wouldn’t have this issue.
Maybe if they stopped increasing the throughput on their consumer connections (10 Mbps, 25 Mbps, 50 Mbps, 100 Mbps, etc), they wouldn’t have this issue. Yes, there are situations where a 50 Mbps home Internet connection is useful, but does it need to be offered to everyone?
Maybe if they stopped looking at their customers like neverending piggy banks, and changed their accounting rules so that “rate of increase in profits” is no longer the bottomline (how is $1 billion in profit bad? when last year was $1.1 billion, meaning negative growth in profit — HELLO!?! you still made $1 billion in profit!!) they would find they had a lot more money to spend on their infrastructure.
The only “issue” here is the one that the major ISPs have created for themselves. Unfortunately, it looks like a problem that they have no desire to actually fix.