O2 wants web companies to carry cost of traffic

Big providers of online video and other web content should be charged to have their data carried over O2's network, according to the mobile operator's chief executive Ronan Dunne

O2 wants to be able to charge content providers to offer their websites and services on its network, according to the mobile operator's chief executive Ronan Dunne.

Speaking at a broadband-themed Westminster eForum on Thursday, Dunne said the move would be necessary to keep networks running efficiently, as data usage dramatically increases.

"If consumers alone are paying, it's hard to see where the incentive is for content providers to use networks efficiently," Dunne said, adding that he wanted "big companies" to pay their share.

Mobile data use is going through a period of high growth. Video and social-networking sites provide the bulk of the traffic, although other applications such as email can also take a toll through inefficient network use.

At the event, Dunne suggested that some content providers might want to "pay for carriage themselves" in order to provide a better quality of service over a mobile network than their rivals provide — he referred to this as "evolving the ecosystem" around content delivery.

In addition, he denied it would upset the web's egalitarianism to provide a better quality of service to those content providers who are able to pay the most.

"Competition will help us ensure that democracy does continue to thrive on the internet, even if we do have to manage traffic," he said. "Networks can't under any economic model presume to have unlimited data capability. Part of the solution is to move away from 'one-size-fits-all'."

Content providers already pay to offer a high quality of service to their customers: they pay their own ISPs for the amount of data they pump out and in some cases — as with the BBC, for example — for having content delivery networks such as Akamai provide localised caching in various parts of the country that they want to reach.

Dunne argued that the "current explosion in data is driving costs up, [creating] potentially more demand than we can handle".

While new, bandwidth-rich technologies such as long-term evolution (LTE) will require a lot of capital expenditure to become reality, telecoms infrastructure company Huawei recently told ZDNet UK that mobile operators intend to keep their operational costs level, and that the cost of providing increasing quantities of data was not as high as some in the industry have suggested.

It will be unsustainable for operators to offer 'all-you-can-eat' data tariffs, because of the small number of users that consume a disproportionate amount of data, Dunne added. He said the issue "is not just an argument about raising money for infrastructure; it's also about fairness — a tiny proportion of people use a very significant proportion of available bandwidth, and we need to ensure we can give consistency of experience".

This sentiment echoes that of Vodafone boss Vittorio Colao, who argued the same point in February while suggesting that "if one customer is willing to pay more for higher bandwidth, this should be allowed". However, while many in the industry have expressed the desire to move to tiered services in this way, none have yet done so.

O2's desire to charge content providers for carrying their traffic has also been expressed before, but more on the fixed side of the broadband industry. Both TalkTalk and BT have argued that they should be allowed to do so, and are lobbying against net neutrality rules that would prevent such moves. Ofcom and the European Commission have both recently completed consultations on the issue of net neutrality, but neither has reported back yet.

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