Deutsche Telekom Dumps Net Neutrality; Will Limit Bandwidth For Competing Video & Voice Products

from the net-neutrality-is-for-other-people dept

It appears that Deutsche Telekom has decided that it can and should ignore the basic principles of net neutrality. It is setting up limits on how much traffic its customers can use, and saying that competitors’ video products will automatically be throttled to 384k, which makes them basically useless. But, of course, this throttling does not apply to Deutsche Telekom’s own video offerings.

The data traffic generated by the use of Telekom’ own IPTV platform Entertain won’t be attributed to the volume integrated in the tariffs. “With Entertain, customers book television. We will therefore ensure that they will not suddenly sit in front of a black screen,” explained Hagspihl. Also, voice telephony through Telekom’s fixed line subscription will be excluded.

But… competitors? Well, too bad. This is a fairly bold move by DT. Of course, telcos have long wanted to do this, trying to force people and lock them in to their own (often overprice and underpowered) services, but to directly punish competitors is a pretty blatant statement by Deutsche Telekom that it thinks it can get away with this because of its dominant position in the market. Of course, if I’m a Deutsche Telekom customer, I’d be incredibly pissed off that Deutsche Telekom is basically telling me that I’ll be penalized for using other video or voice services, even if they’re better. Yes, those competing services will work fine beneath a certain traffic level, but people don’t realize just how much data they often use these days — especially when you’re talking about bandwidth-heavy video.

Deutsche Telekom’s explanation for this is almost entirely bogus.

“We want to continue offering our customers the best network in future into which we invest billions of euros. However, constantly increasing bandwidths can’t be financed through constantly dropping prices. We will have to charge customers with very high data consumption more in future,” said Michael Hagspihl, managing director marketing at Telekom Deutschland.

First of all, broadband remains an incredibly profitable business, and while the telcos love to make these claims, they’re simply not supported by the data. They’re making money like crazy on their existing networks, and although keeping up with the growth in bandwidth does require some investment, it’s easily affordable under the current structure. What this is about is exactly what everyone knows: killing off competitors, limiting the market from disruption and trying to control these other services, like video and voice, so that people are forced into using Deutsche Telekom’s own services.

In fact, Deutsche Telekom’s CEO more or less shows off the standard hubris of telco execs these days, believing that the only thing that’s important on the internet is his network, and everything else you get is only because of him:

“Without our telecommunications networks and modern primary products there wouldn’t be any online services coming from Google or Apple,” [Deutsche Telekom CEO Rene] Obermann told the Deutsche Presse Agentur.

Uh, I think you mean that without your monopoly power over the network people wouldn’t have to use your lines to reach those services, which is what they really want. The “value” here that people get isn’t Deutsche Telekom. They supply the pipes. The value is in all of the various services available, and Deutsche Telekom is trying to make those useless… oh, unless, those service providers want to pay up. It’s the same old net neutrality story. The telcos overvalue their networks and they try to get paid twice for the same thing. They want customers to pay to reach Google and Google to pay to reach the customers.

Thankfully, the German government isn’t too keen on where this is going:

Economic Minister Philipp Rösler voiced concern in a letter to Telekom’s CEO Rene Obermann on Wednesday, a copy of which Spiegel Online obtained.

In the letter, Rösler warned of possible restrictions for “flat rate” customers. He said Federal government and consumer protection authorities would “follow very carefully further developments in relation to the varying treatment of Telekom’s own services, and that of others, in terms of network neutrality.”

Federal Consumer Protection Minister Ilse Aigner also criticized the new policy in an interview with Spiegel Online. “At first glance, progress for the customer can not be seen,” she said. “Limiting flat rates is certainly not consumer-friendly,” the Bavarian conservative CSU minister said.

Deutsche Telekom has its dominant position in the market because until not that long ago it was the state owned telecom provider. Trying to block out competitors with bogus excuses and limitations for consumers certainly seems like a pretty big abuse of that position.

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Companies: deutsche telekom

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Comments on “Deutsche Telekom Dumps Net Neutrality; Will Limit Bandwidth For Competing Video & Voice Products”

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39 Comments
out_of_the_blue says:

Re: Actually, Mike got it wrong: this about data caps.

The only relevant point in the original article, which you clearly didn’t read, is that service from their own local servers isn’t included in the cap. That’s logical, but little to do with neutrality: the data caps are just EXACTLY as what I’vd got with my ISP. So big deal. I’m not alarmed that with this Germans are going back under the Nazis. — But with the central banks, YES.

2nd point, VPNs have NOTHING to do with this, NOR will they get around the data cap. Yet again, VPNs won’t save you.

PRMan (profile) says:

Re: Re: Actually, Mike got it wrong: this about data caps.

Actually, thanks OOTB. You actually contributed something useful to the discussion!

They will be limited to 384K once they use up their cap which is at 75GB to 400GB per month, depending on the plan.

Since the average usage is 15GB to 20GB, this will affect very few extremely high bandwidth users.

PaulT (profile) says:

Re: Re: Actually, Mike got it wrong: this about data caps.

Ah, ootb, always looking at an excuse not to criticise his beloved corporations. Here, a blatant violation of net neutrality is acceptable to him because he found a convenient excuse.

He won’t bother about the problems this will cause, the damage to competitors and the monopoly position that’s sure to be abused. No, he has a convenient excuse so all’s OK!

out_of_the_blue says:

Oh, it's terrible! -- Until look at numbers Mike left out.

“if they exceed the volume included in their tariff.” — Which is “average customers currently use 15GB to 20GB of data volume per month. The smallest integrated data volume will be 75GB and the highest 400GB.

I’d say a WHOPPING 400GB! But even 75GB is LOTS. — I fall into the “average” range, by the way, and that’s actually too much. — If to the allowed levels, you NEED some limits on your habits. Won’t harm you, nor will NOT having a third slice of pie.

And eventually any network will be saturated, so it’s wise to think ahead. Everyone can’t have all the bandwidth they want. (“Unlimited” for fixed price is one of Mike’s fondes notions.)

Anyhoo, as usual Mike gives advice on how to run a nation-wide telecom, without of course ever having actually run anything besides this blog.

JEDIDIAH says:

Re: OOTB: Always the corporate apologist.

The problem isn’t the bandwidth cap.

The problem is that services aren’t being treated equally. The streaming version of Netscape is having it’s air supply cut off by this Microsoft wannabe.

The problem is that the monopoly is favoring it’s own services over that of it’s rivals.

out_of_the_blue says:

Re: Re: OOTB: Always the corporate apologist.

This is EXACTLY the same deal that the ISP I use has! It’s NOT that they’ve moved to favor own service, that’s just incidental when the server is local, they don’t have the same bandwidth costs.

IT’S JUST A DATA CAP. LIKE THE ONE I HAVE.

RD says:

Re: Oh, it's terrible! -- Until look at numbers Mike left out.

“Anyhoo, as usual Mike gives advice on how to run a nation-wide telecom, without of course ever having actually run anything besides this blog.”

Says the failure who’s only credit is ShillTroll(tm) ranting on said blog site.

Which also makes you JUST AS UNQUALIFIED to post on the subject as Mike, per your own argument. QED.

Ninja (profile) says:

Re: Oh, it's terrible! -- Until look at numbers Mike left out.

I’d say a WHOPPING 400GB! But even 75GB is LOTS.

I’m using around 100Gb per month with streaming videos. My ISP has data caps in their policy but if they chose to enforce ppl would probably get mad because any 1080p usage will eat most of the monthly cap in less than a week. Actually it could be as fast as 2 days if you watch around 3 movies. I almost use all of my 2Gb cap on my phone and I’ve never downloaded anything infringing via that connection…

A loopy tour into ootb’s clueless fantasy world indeed.

PaulT (profile) says:

Re: Re: Oh, it's terrible! -- Until look at numbers Mike left out.

One of the failings with ootb and his troll brethren is that they lack both the knowledge of how services are currently used and the foresight to understand how they may be used in the future.

In his tiny little head, “lots of traffic” = “lots of downloads” and “downloads” means the same as “piracy”. Both of these are of course fallacies. Traffic has many components, with streaming being the most bandwidth heavy. Someone streaming 2 movies a day on Netflix may consume significantly more bandwidth than someone torrenting a single movie every day, yet in ootb’s head only the downloading counts. If you consider downloading alone, some games on legal download services are in excess of 10Gb each, and some services require regular patches of up to 1Gb or more, which DLC is often multiple gigs, not to mention the bandwidth requirements of online gaming. Yet he’ll also discount these as well.

While dismissing these perfectly legitimate high bandwidth uses, he’s not only denying current reality, but the future as well. New consoles are placing a great emphasis on online use and purchases. Netflix are looking at offering 4K streaming, as are Apple, and YouTube already supports it. More and more people are using more and more devices, meaning you can be having 4 members of a household streaming a movie in HD at that same time over the same connection on a regular basis.

Anyone with half a brain can see that bandwidth requirements are going to increase exponentially as new hardware and services require more of it and those services become more commonplace, yet these idiots are going “well I don’t need that much bandwidth now so it down’t matter”. It’s a failed argument before they even start.

PaulT (profile) says:

Re: Re:

“I’m not quite sure how they ended up in the sticky hands of the Deutsche Telekom corporation”

Like most national telephone companies, DT was a publicly owned monopoly until it was privatised in the last few decades. Just as with, say, BT in the UK or Telefonica in Spain, they still maintained a defacto monopoly until real competition was able to appear, though I’m not sure how truly competitive the German telecoms market is at the moment. But, whatever infrastructure was paid for by public money will be in their hands because that’s probably who installed them to begin with.

mattarse (profile) says:

I’m late to this conversation but I was mentioning this to a German friend and he mentioned that because of criticism of the plan they will not be instituting it until 2016 (and who knows what will change by then).

Source below – in German but google translate does ok with German pages –

http://www.spiegel.de/netzwelt/netzpolitik/internetprovider-telekom-bremst-nicht-als-einziger-a-896606.html

alex (profile) says:

Ooof

I’m in Berlin and use T-Com (Deutsche Telecom) at home. I didn’t even realise they have a video platform. I might have to look into switching…

I know they do various slightly dodgy tactics to keep their monopoly. For example, when you want to get a new internet connection – all of the ISPs you speak to say they can install in ~6wks except T-Com who can install in 2wks (They also own the phone lines I believe so all the ISPs have to use them anyway).

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