European carriers go Tony Soprano on Apple, Google and Facebook, say they need to pay traffic fees

European carriers go Tony Soprano on Apple, Google and Facebook, say they need to pay traffic fees
It seems that the European carriers got pretty stirred up by Apple's intent to get even more influential, solder a SIM card into the next iPhone, and allow people to flash it for use with any carrier they want via a simple app download. First, it was threatening to cut subsidies, and, rumor has it, actually diminishing the grand total they dole out to Apple for each iPhone, as well as taking the Apple promos off their home pages in a short-lived retaliation.

Then the European telcos obviously sat down, thought long and hard where this smartphone craze that makes the phone more important for users than the carrier will lead them to, and concluded that they are at the losing side of the equation. Therefore, France Telecom, Telecom Italia, Telefonica and Vodafone, are now demanding payments from Google, Apple and Facebook, among others, for the fact that they are generating too much traffic on their wimpy networks, and force them to invest in upgrading, or lose customers. It is basically the same guys that threatened to cut the iPhone's subsidies, if Steve Jobs makes them just "dumb pipes" for zeros and ones flowing to his superphone and "magical" tablet. Only T-Mobile is missing from the gang involved in the latest intimidation effort, but we are sure they will gladly take the money too.

AT&T and Verizon's CEOs have made comments before that they need to extract money from popular web services simply because they are popular, otherwise they will have to make do with the role of the aforementioned "dumb pipes". It didn't work then, it probably won't work now, but the net neutrality rules in the EU are stricter and encourage more competition among sites, so we'll see how this pans out. Basically Google, Apple, Facebook and the rest, can just say - "If you want money from us because we have invented services everybody wants, how about we share some of the monthly subscription fee people are paying you for your cable broadband or wireless, isn't that what's supposed to ensure your profits? Get a grip!".

source: Arstechnica & Barron's


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