British Telecom Wants Netflix To Pay A Tax Simply Because Squid Game Is Popular
from the good-luck-with-that dept
For years telecom executives, jealous of internet services and ad revenue, have demanded that content and services companies pay them an extra toll for no reason. You saw this most pointedly during the net neutrality fracas, when AT&T routinely insisted Google should pay it additional money for no coherent reason. Telecom execs have also repeatedly claimed that Netflix should pay them more money just because. Basically, telecoms have tried to use their gatekeeper and political power to offload network investment costs to somebody else, and have spent literally the last twenty years using a range of incoherent arguments to try and justify it with varying degrees of success.
While these efforts quieted down for a few years, they've popped back up recently thanks to, of all things, Netflix's Squid Game. In South Korea, ISPs have demanded that Netflix pay them more money because of the streaming demand the popular show places on their networks. As we noted then this makes no coherent sense, given ISPs build their networks to handle peak capacity load; what specific type of traffic causes that load doesn't particularly matter. It's just not how network engineering or common sense work.
That's not stopping telecom executives around the world, of course. Across the pond, British Telecom Chief Executive Marc Allera has trotted out the same argument there, claiming that a surge in usage (during a pandemic, imagine that) is somehow Netflix's problem:
"Every Tbps (terabit-per-second) of data consumed over and above current levels costs about £50m,” says Marc Allera, the chief executive of BT’s consumer division. “In the last year alone we’ve seen 4Tbps of extra usage and the cost to keep up with that growth is huge.”
An overwhelming majority of day-to-day usage, up to 80%, is accounted for by only a handful of companies such as YouTube, Facebook, Netflix and the games company Activision Blizzard."
But again that's not how any of this works. ISPs build out network infrastructure based on managing peak demand. It doesn't matter whether that demand originates from Squid Game or video gaming. As an ISP it's your responsibility to meet consumer and enterprise demand, since that's what they already pay you an arm and a leg for. Consumers and businesses alike already pay ISPs for bandwidth and transit; often accompanied by a steady array of consistent price hikes. ISPs are effectively asking for yet another additional troll toll, you know, just because.
Whether talking about Netflix or Google, one core component of this telecom executive argument is always that tech companies are "getting a free ride":
"A lot of the principles of net neutrality are incredibly valuable, we are not trying to stop or marginalise players but there has to be more effective coordination of demand than there is today,” he says. “When the rules were created 25 years ago I don’t think anyone would have envisioned four or five companies would be driving 80% of the traffic on the world’s internet. They aren’t making a contribution to the services they are being carried on; that doesn’t feel right."
But nobody gets a "free ride" in telecom. Consumers and companies alike pay increasingly more money for bandwidth. And in the case of companies like Google and Netflix, they pay billions of dollars for expedited transit, undersea cable routes, CDNs (which Netflix provides ISPs for free), and even (in Google's case) their own residential ISPs. Netflix also has a long history of providing users different tools to limit streaming so it doesn't run afoul of user broadband caps.
Suggesting they somehow get a free ride and should pay another troll toll just because makes absolutely no sense. It's a dusty old talking point that originated with AT&T nearly twenty years ago that began the net neutrality debates. Its origins are simply greed. Telecom execs are simply trying to offload the costs of network investment (their job) to somebody else to make investors happy. This somehow gets dressed up into something far more elaborate than it actually is.
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Filed Under: bandwidth, free ride, internet, marc allera, net neutrality, squid game
Companies: bt, netflix
Reader Comments
The First Word
“'They're using what they paid for, that's not fair!'
As always any ISP whining about how the likes of Netflix are 'getting a free ride' should first and foremost be told to put up or shut up by anyone they're complaining to. Either pay even a week's worth of the internet bill for those companies and provide the records and numbers to prove it or be told to shut it with such a grossly dishonest lie.
That out of the way I do have to wonder if they realize just how bad their whining is leaving them looking. If customers using the service they are paying for is too much for the company to handle they're basically admitting that they sold a product/service that they knew they couldn't actually deliver, and that sure sounds a lot like false advertising to me.
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before it starts demanding payments such as this,the first thing British Telecom wants to do is get it's fucking act together and get full fibre to the premises installed so customers in the UK actually get a decent speeds and reliability, instead of the crock of shit they get at the moment! there's lots of complaining done about the broadband service here in the USA but it's not that much worse than the service in the UK! that's no endorsment for the USA, i'm just saying that it 'isn't alone! the differences are, however, better customer service and much lower prices but the lies and bullshit are still really evident! customers still well down the order of concern, expected to know nothing, say nothing when things go completely tits up!!
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this reminds me of an occurrence in Idaho.
Some idiot decided to pay a Huge peice for a piece of property In Boise area.
Which the state decided that since idiots are willing to pay so much, they could raise property taxes by 30%.
Base Taxes on what is Being paid for Property, means Any group Could inflate the price by Paying stupid prices. Forget using a % based system.
This is interesting based on reports of the NY downtown property prices, and vacant property thats over valued by over 10 times. Selling it to Outside nations and making the price Go up, makes them worth?
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"before it starts demanding payments such as this,the first thing British Telecom wants to do is get it's fucking act together and get full fibre to the premises installed so customers in the UK actually get a decent speeds and reliability, instead of the crock of shit they get at the moment!"
Why would they want that? Far cheaper and easier to hand the customers that crock of shit and then blame some unrelated third party for their own insufficient infrastructure and shoddy maintenance. Bonus if they can extort money out of that third party for a service which their actual damn customers have already paid for in full...
Seriously, the US once stood out as a model for New Things. These days it's more as if their main export is conmanship and graft. The bullshit Comcast tried to pull on Netflix rapidly became a "Why can't I?" in nations who ought to know better.
I'm hoping the UK realizes what a horrifying precedence it would set for a service provider to turn around and charge unrelated third parties for services already bought and paid for in full...
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Sadly, you can thank Thatcher's privatisation of our telecoms infrastructure for you not having fibre to the premises. In the 80s, the then-nationalised BT had used the power of vertical supply chain integration to purchase the manufacturing and logistics infrastructure for installing a nationwide fibre backbone, with them having achieved lower installation costs than copper for full fibre to the premises by 1986, but Thatcher shut that down as being "anticompetitive", leaving us stuck on copper for the next few decades, and full fibre to the premises a dream we're still waiting for in the 2020s as a result.
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Did no-one tell Marc Allera that BT has Netflix CDN severs on its network?
BT is my ISP and when I load up a title on Netflix the video requests go to ipv6-c018-lgw001-bt-isp.1.oca.nflxvideo.net which resolves to an IP owned by BT.
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"Did no-one tell Marc Allera that BT has Netflix CDN severs on its network?"
Well, yeah, but that's not the issue.
The issue is that British Telecom wants more money and strongly feels that, having already charged their customers for the money to use bandwidth, they want to charge the popular addresses those customers then visit, getting paid twice for a bout of outright conmanship.
I'm sure Allera knows this damn well and doesn't give a rat's ass since he sees a slim hope of a fat paycheck from someone who doesn't owe him a cent.
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They are why the service exists. No one would buy broadband without internet content, and they'd pay a lot less without the big streaming providers.
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You just don't get it, do you? Everyone knows that big companies deserve large amounts of money and should never be forced to actually do their jobs.
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What companies claim they want to the public: Competition, Low cost, and reliable services
What companies say they want to government: We want all the money and government to pay our costs.
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Careful what you wish for
Of course, if Google et al end up using only their own cables so that AT&T can keep its precious bandwidth for itself, people will accuse them of wanting to "own the internet" and will complain anyway.
https://www.wired.co.uk/article/facebook-google-subsea-cables
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Errr, nope. You can play Hollywood Accountant all day long, but if you aren't willing to open your books for an in-depth inspection, then we aren't even close to falling for that kind of crap.
Sounds like a personal problem to me. But more to the point, who's getting this allegedly extra £200m from you, mmm? Enquiring minds want to know.
Yeah, and so? Does it really matter who's doing the serving of data, or where it's being served from (location-wise)? Let me answer that for you - NO, it doesn't matter at all.
You seem to think that whining about a small number of popular companies is a better target than a very large number of small companies who also serve up data to viewers, but that aren't as popular, for whatever reason. One can only guess that it's all about the money, specifically the ad revenue earned by those popular companies.
Wrong again. No one set any rules at any time, not since A.G. Bell invented the telephone. No government authority anywhere in the world has deigned to tell phone companies (and/or ISP's) how much capacity they have to provide, just in case the demand should somehow rise above the established average.
They didn't have to envision any such thing, because there's no cause for worry over something that doesn't matter one whit. Let me spell it out for you - electrons going across the wire don't give a flying fuck where they came from, where they pass through, nor where they finish their sojourn. Simple as that. Nor do they care if they are travelling alone, or in a group, regardless of that group's size - the are still travelling to their destination, end of story.
tl;dr:
Calling Allera's waste of oxygen a pile of bullshit would be an insult to both the bull and all of the shit it has ever dumped.
And for you, Karl:
Sorry, but nope. They build for the minimum infrastructure necessary to keep the majority of their customers happy. This means that the telephone company set the example more than 100 years ago, with a switched network. The same thing is being done today, telling customers that there is plenty of capacity, but the execs are hoping like crazy that no more than a relative small portion of their customer base is actually using the "pipes" at any one time. The difference is, you used to hear "All circuits are currently busy, please hang up and try again later." Now you hear "WHY THE FUCK IS MY SPEED SLOWER THAN A 56k MODEM?!"
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"When the rules were created 25 years ago..."
He's referring there to the introduction of ISPA in 1995, and their code of practice:
https://www.ispa.org.uk/about-us/ispa-code-of-practice/ the lightest of light-touch self-regulation.
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I honestly was not aware of that, thanks for the link. But the fact remains, no matter what country we're talking about (and I'm an American), the idea of .... no, wait.... another responder said it best in another thread today. To quote:
I also note while reading that set of rules, there's nothing stating one iota of self-regulation regarding traffic, percentages, double-dipping, or anything of the sort. In fact, Point #4 specifically states that all members will be honest in their dealings with others. I don't see much of that coming out of Allera's pie-hole.
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What happened?
It used to be Spam and Adverts were the #1.
Is the internet finally balancing out? NOPE
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"They aren’t making a contribution to the services they are being carried on; that doesn’t feel right." "
It doesn't feel right that you run a corporation with piss poor customer service, yet here we are.
""Every Tbps (terabit-per-second) of data consumed over and above current levels costs about £50m,”"
Who the fsck are you buying bandwidth from??? Comcast?
Those numbers feel high... please show your work.
Once again the whole "they get a free ride!!!"
So you are willing to pay any one of those freeloaders bandwidth bills for a month right?
Remember if you say no, it raises questions about about how stupid you think we are.
You contracted to provide internet service to your customers.
It doesn't matter where/who/what they are requesting data from.
Sorry if instead of preparing for more demand from consumers you gave yourself another bonus & now you can't have as much of a bonus as you're having to deal with increased demand.
I'm sure the pandemic messed up your plan for larger & larger bonuses... but... that's sort of the job you've been ignoring for years & your chicken has come home to roost.
Lets lay out your argument in different terms, so then maybe you might understand how fscking stupid you sound.
You own a toll road.
Something diverts more drivers onto your toll road.
All the drivers are paying the toll.
You had to hire more toll takers & have the road maintained more.
Rather than accept that your profit from tolls dropped with this new surge in paying drivers, you sent a letter to the big 3 car makers demanding they compensate you for more drivers using your toll road... that they pay the toll for... because the car makers are getting a free ride.
Do you smell burnt toast?
Cause I'm thinking the only explanation for your statement is brain damage... that or pure greed driven by the "outrage" over tech companies making more money than you are... when all you do is provide the road people drive on & pay you a toll already to use it.
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Yes. It's the whole landlord thing all over again. What do you mean i have to maintain the property i built/bought? Just keep sending me money or i'll make your life miserable.
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"Cause I'm thinking the only explanation for your statement is brain damage... that or pure greed driven by the "outrage" over tech companies making more money than you are... when all you do is provide the road people drive on & pay you a toll already to use it."
It's greed all right. Moreover it's a sort of shamelessness we aren't really used to seeing even from corporations, because there was a time not too long ago when it was understood that the one sin a company CEO must not commit is to look like a moron in public - it undercuts the stock value.
It's almost as if the last few years of news out of the US has somehow irreparably damaged the common sense of proportion of every listener to the point where insane statements are considered somehow normal.
What the UK needs is more unruly crowds once again pelting public figures with rotten fruit every time said figures says, in public, anything which indicates they think everyone hearing them out is a moron.
Shit like this makes me long for the reintroduction of the pillory. I wonder if Allera doing three days in the stocks on Trafalgar Square might serve to raise the bar on common ethics in the corporate sector.
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I dunno if it would make them change but lets try it...
If it doesn't make a difference there is that old tower with ravens no ones been using for to much...
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I'll tell you what really bugs me. That shit like this is what China will just silently point to whenever someone questions them about that "social credit rating" they're implementing.
And the average person, seeing the utter shameless grifting and deranged, broken excuses of western CEO's and politicians begging for handouts or riling up their bases with inflammatory nonsense, will nod and say "Hm. Yeah, if what we have is the alternative..."
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Sadly there isn't a free press there to leak how high level party members are worse than western CEO's.
China violently protects their image, even in the face of evidence proving they are lying.
Its like what 'Merkia could have been if Trump have gotten the military to give him his way.
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"What the UK needs is more unruly crowds once again pelting public figures with rotten fruit every time said figures says, in public, anything which indicates they think everyone hearing them out is a moron."
Judging by how anyone who dared point out the bleeding obvious with regard to Brexit was accused of "Project Fear" fearmongering and it led to a pro-Remain politician being murdered in broad daylight, and other types of protest led to innocent bystanders dying as the police tried to quell dissent, I'm not entirely sure that simple civil disobedience via light displays of violence is the solution to any problems.
What the correct solution is I'm not sure, but the types of people dumb enough to still read the naked anti-civilisation propaganda pushed by the Mail and Express would not exactly take a well deserved public humiliation in the spirit in which it's delivered.
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"What the correct solution is I'm not sure, but the types of people dumb enough to still read the naked anti-civilisation propaganda pushed by the Mail and Express would not exactly take a well deserved public humiliation in the spirit in which it's delivered."
So once again any presented solution bounces against the current state of affairs of the citizenry generally being dumber and less inclined to reason than they were half a century ago.
I thought this was mainly a US problem.
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If it were, we wouldn't have been talking about Brexit for the last half decade.
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Rupert Murdochs evil knows no borders.
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Figures....
It seems all old companies know is how to overcharge, provide shit service and whine about "teh big techs!".
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'They're using what they paid for, that's not fair!'
As always any ISP whining about how the likes of Netflix are 'getting a free ride' should first and foremost be told to put up or shut up by anyone they're complaining to. Either pay even a week's worth of the internet bill for those companies and provide the records and numbers to prove it or be told to shut it with such a grossly dishonest lie.
That out of the way I do have to wonder if they realize just how bad their whining is leaving them looking. If customers using the service they are paying for is too much for the company to handle they're basically admitting that they sold a product/service that they knew they couldn't actually deliver, and that sure sounds a lot like false advertising to me.
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Re: 'They're using what they paid for, that's not fair!'
This. Netflix and others aren’t getting their connection to the internet for free. They’re paying telecom customers just like the rest of us. Their plans skew more towards fast uploads and slower downloads than our plans do, but they pay for every bit per second they use.
Why should they have to pay extra, on top of the king’s ransom they are already paying, in order to actually use what they are already paying for?
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It just feels wrong
Imagine having the guts to state this, and when the entire world knows what they mean is; We want more money. Their money should be our money.
Typical telecom executive, got the position by who they know, not what they know.
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Why should a company let you access internet, when it can let you access "the internet of companies willing to pay to let you read their sites". I mean, that's almost like internet, isn't it???
It sounds like a lot of people are going from one internet broadband option to zero internet broadband option.
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“In the last year alone we’ve seen 4Tbps of extra usage and the cost to keep up with that growth is huge.”
So, in the agreement between you and your customers you either pass on the costs of upgrading the network to the levels they demand, or you place limits on the network in order to control it through other means.
You don't get to make 3rd parties pay for bandwidth that your customers have supposedly paid for, any more than you charge extra because a lot of people are suddenly calling into the X Factor or whatever the current reality bollocks is that people are voting on by phone. In fact, you usually have an agreement to charge customers more and pass a profit on to the people the call is being directed to in those cases...
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"So, in the agreement between you and your customers you either pass on the costs of upgrading the network to the levels they demand, or you place limits on the network in order to control it through other means."
Ah, but he isn't addressing any of the stakeholders towards whom BT has obligations.
He's just holding his hat out while strongly implying that someone else who has a lot of money needs to share their wealth.
Legally he's in the clear. It's just that he has no shame. And why would he, when this is the level of business ethics to which a former US president subscribed to and advocated?
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Of course, that's ultimately the game here, as with other similar stories. ISPs have hedged their bets based on how much people used their connections under normal circumstances. Then, COVID-19 came along and required everyone to use their connections way more than they normally would. They can't suddenly ramp up consumer prices to make up the shortfall, so they decide to invent the idea that nobody their customers go to using their connections is paying for their own connections, and whine that if only they could double charge those destinations then everything would be OK.
It's almost certain that when people return to proper normal life, the excess usage dissipates and normal upgrade schedules take care of the standard increase in usage when this becomes a distant memory. Until then, the feelings of investors and board members about what happens with revenue this quarter will as ever take priority over reality.
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