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.

Reader Comments

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  1. icon
    Nigel (profile), 26 Apr 2013 @ 12:58pm

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

    Collapse and move along.

    If this dude didn't have a brain in his head he would lonesome.

    Nigel

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