Two years after voluntarily signing a network neutrality code of conduct, Norwegian Internet service provider Telenor has reversed its position, declaring the rules don’t work as a viable business model.
Telenor, one of Norway’s largest ISPs, previously was a staunch proponent of net neutrality. Less than two years after signing an agreement with the Norwegian government in 2009, however, the company has announced plans to charge sites such as YouTube and state broadcaster NRK for allowing the ISP’s users high-quality access to them.
A Telenor exec told the business daily Dagens Næringsliv that YouTube uses too much bandwidth and ought to compensate ISPs for it: “The regime for distribution of data content is free for the sender, and this must be changed. For the content providers it means that they will have to pay to make content available online, regardless of how much they send.”
He said sites that paid up would get quality-of-service guarantees, and everyone else would be placed into a “best effort” pool.
Traffic Prioritization Allowed
The European Union rejected proposals to adopt net neutrality rules last fall, but the absence of enforceable regulations previously had prompted some EU nations such as Norway to issue net neutrality guidelines for ISPs. Telenor signed Norway’s guidelines in 2009.
Norway’s Consumer Council, the government agency that previously attacked Kindle DRM, Apple’s iTunes DRM, and Sony’s PS3 “upgrades,” immediately criticized Telenor for rejecting the net neutrality principles.
Norway’s net neutrality guidelines stipulate: “Internet users are entitled to an Internet connection that is free of discrimination with regard to type of application, service or content or based on sender or receiver address.” Traffic prioritization would be allowed, but only when done at the direction of an end user.
‘Subscribers Consume Bandwidth’
Although he says arguments promoting net neutrality are fundamentally flawed, Mike Robinson, CEO of Seattle, Washington-based Cuddletunes.com, says Telenor is wrong to seek remuneration from specific Web sites instead of the customers who access the sites.
“Telenor and other ISPs argue that sites like YouTube ‘use too much traffic.’ That is absurd,” he said. “The existence of a massive archive of videos at YouTube does not create any traffic on Telenor’s network. What creates traffic is the desire by Telenor’s users to see that content and to upload even more content,” he explained.
He added, “If nobody in Norway watches YouTube, Telenor doesn’t have to carry any YouTube traffic at all,” Robinson said. “Same goes for any other content source—Wikipedia, ESPN, whatever. It’s Telenor’s users that create the traffic, not the other way around.
“If Telenor’s users want more bandwidth to access more stuff, then Telenor may have to charge those users higher fees to pay for the bandwidth they are demanding. But the consumer of all Telenor traffic is Telenor’s ISP subscribers, not the servers storing content, be they Wikipedia, YouTube, or Aunt Mabel’s blog,” Robinson said.
Where to Increase Prices?
Opponents of the net neutrality regulations passed 3-2 along partisan lines by the U.S. Federal Communications Commission this past December observe the Telenor reversal as validating their objections.
Among the staunch opponents of net neutrality is Steve Titch, a telecom and policy analyst for the Los Angeles, California-based Reason Foundation. He notes the press for net neutrality is raising all sorts of unnecessarily complicated disagreements the market could more effectively work out without government interference. “Now Telenor has gotten to point where push comes to shove,” Titch said.
“The popularity of YouTube is raising Telenor’s costs,” Titch continued. “They have to decide how they are going to pay for it. They can increase prices to the customer base or to the content providers. They can tell YouTube or Google that they need to improve the network in order to carry the service. Someone has to bear the cost of the additional bandwidth that’s needed.”
writes from South Holland, Illinois.