Blog Post

T-Mobile to Abandon Net Neutrality for Mobile Video

T-Mobile is planing to ask companies like Apple (s AAPL) and Google (s GOOG) to pay for their mobile offerings, according to an interview that René Obermann, CEO of T-Mobile parent Deutsche Telekom, gave the German Manager Magazin. Obermann said the company could charge more for offering better quality of service or high transfer rates for mobile video or music, which should be “priced differently.”

He added that well-produced and successful online platforms should not be able to use the mobile Internet for free. Deutsche Telekom is already in discussions with Google about this very subject, according to Obermann. The Telekom CEO didn’t say whether T-Mobile would want to use this approach universally or restrict it to countries with less stringent net neutrality protections. The company operates mobile networks in more than 10 European countries, as well as in the U.S.

The U.S. Federal Communications Commission is currently trying to reclassify broadband to gain the authority to enforce net neutrality rules for ISPs, but it’s unclear if and how this is going to affect mobile broadband. There is even less net neutrality protection in place in many European countries.

In addition to his net neutrality comments, Obermann said the company is not planing to acquire any further mobile networks. Instead, it wants to conquer international markets with its own Internet services, including download platforms for music, movies and software titles.

Image of T-Mobile lanyards courtesy of Flickr user Stefan Evertz.

Related content on GigaOm Pro: Hot Topic: Mobile Broadband Pricing (subscription required)

27 Responses to “T-Mobile to Abandon Net Neutrality for Mobile Video”

  1. Yeah, I agree with Scott when he says “Just let competition (a.k.a. capitalism) knock some sense into T-mobile.”

    They’ll see the light, or innovate enough to as they put it “conquer international markets”. I’m not sure about the conquer part, but… whatever.

  2. Scott Dunn

    Common Carriers.

    If you connect to public networks, you’re a part of a public network, which means the public now depends upon you. That makes you subject to the police power. This is true no matter what resource you put out for public hire.

    From railroads to taxis to wires, you can’t discriminate against traffic, which is exactly what T-Mobile is proposing to do. There is a curious old Supreme Court case that covers this in detail, Munn v. Illinois.

    This public interest in public networks is precisely why government regulation is needed. I’ve posted a little article that explores this issue in some detail.

  3. Random Thoughts

    This shall henceforth be known as The German Solution: i.e., hold your customers captive and then tighten the screws before administering the final solution. Too bad: I was about to buy an Android with T-Mobile service. I think I’ll find another provider. Google should reconsider T-Mobile as a provisioning partner. T-Mobile is not acting like a good partner.

  4. onecallednick

    Don’t see them, although I’m wondering why I’m bothering with someone who still thinks name calling is funny. Is that your dad’s picture, Scott?

  5. I really wish we could edit our posts after we post them. That’s pretty basic of a feature for most blogs today. If that was possible, I would have added a “not” after the “should” in the sentence: “If you want to know who caused the recent recession, you need only look at Congress that forced banks to give loans to people who should have been given loans.” in my reply to Comrade Todd.

  6. so will this only apply to cell phone plans or broadband plans meant for usb dongles and mifi devices as well? with the latter people will expect the same sort of access they get with cable or dsl.

  7. Maybe I’m missing something here, because I don’t see what the fuss is about. If anyone here thinks federal regulation of broadband is good has not been paying attention to reality. Federal regulations usually raise costs because those regulations are not about protecting you- the consumer. That is not the Gov’t’s role in America. Regulation is about controlling by force and collecting taxes. If you don’t like T-Mobile go somewhere else. That’s the free market. But instead of that choice, some of you want the feds to control that choice for you. I don’t get it. Why?

    T-mobile is just saying here that they plan to charge for superior services. They are not double dipping. It’s a selection of service levels. Broadband works the same way– You can buy standard DSL or T1, and a hundred different data rates in between. Did you complain they were charging more for DSL when you were on dial-up? T1 services (like t-mobile’s superior wireless data transfer they describe) costs more and those customers will get better service. Of course that’s right, considering the customer is paying for those premium services. And didn’t I just read here about a cap on Broadband? As the demand grows, the costs of the infrastructure and the pricing of the services will expand as the supply is exhausted from demand. But a broadnand cap is rationing. Now in light of recent Apple gadgets hitting the market, doesn’t all this make sense? Within this free market process, competition will be born and customers will have more alternatives to T-Mobile. But some in this section are suggesting we regulate, which to me means the ISP companies offering these services will have less money to expand and serve you, and then be forced to ration your ISP services. So would some of you prefer that everyone gets DSL rationed, and no one gets T1?

    I should add, The POTUS recently gave himself the right to shut down the internet in America in the event of a national security crisis. Federal regulation will protect and harbor that authority (which can be abused). So I ask, what will all of us do if there is a cyber attack and our internet businesses are shut down indefinitely like they are doing with oil in the Gulf? What then? Okay, maybe this is just a mindset debate and not a legitimate business economics debate. I mean, if it costs too much to get a service, then you can’t afford that service. Just because it’s there doesn’t mean you are entitled to it. I can’t afford a Porsche, but I’m not going to ask the Feds to regulate cars so I can. Oh wait a minute… The Feds did take over the car companies.

    • onecallednick

      What damage would that be? The recession? I suppose you could argue that it’s the feds’ fault, but only since their DEregulation allowed the financial industry to self-destruct in an orgy of greed.
      I wish they nationalized the car companies. Maybe we wouldn’t have gigantic SUVs clogging the freeways. Sadly we just gave them billions of our money and sent them on their way, much like AIG.

      Deregulation has never spurred investment in the telecom sector and likely never will. it has in fact made it stagnate.

      • Yes, Todd, the recession. It was caused not by deregulation but by Congress forcing banks to give home loans without money down or credit checks so poor people could afford homes. But they couldn’t afford homes (because they’re poor) and defaulted on their loans. These were then bought up by Freddie May and Freddie Mac then packaged with good loans. Due to the bad loans in these packages, the packages became “toxic”. The Ponzi scheme (like all Ponzi schemes) eventually collapsed and that took the financial markets down with them. If you want to know who caused the recent recession, you need only look at Congress that forced banks to give loans to people who should have been given loans.

        As for nationalizing the car companies to not have SUVs, can I interest you in a Yugo? laugh

        I know you believe the answer to all the world’s problems is government. How’d that work out for Greece, Italy, France, and so forth?

      • onecallednick

        Boy you’re good at changing the subject. But the lie you just told is too big to ignore. Would you mind citing some sources for your assertion that congress “forced” banks to issue loans? I bet they “forced” AIG to make those risky investments that almost brought the financial system down on their heads too, those poor bastards.
        France has a lower unemployment rate, more days off, higher productivity and incredible schools. too bad for them, huh?

  8. onecallednick

    Well, it was nice knowing you, T-mobile. It’s too bad you went all insane at the end though.

    Seriously, what planet is this guy from? This kind of nonsense is EXACTLY why the FCC needs to knuckle up and regulate the internet like another utility, and EXACTLY why I’ve given up on mobile data. You don’t get charged differently to heat your hot tub, do you?

  9. harry hawk

    They are right that it shouldn’t be free…

    But it isn’t; their customer PAY for the service..

    which means they want to double dip.. but if they can get Google to pay when I use them, I’d be happy to take their phone for FREE…

  10. Ah yes, the dumb pipe-provider’s wet dream, charging both the provider and the consumer with an upward-spiraling array of fees.

    Good luck with that.

    Maybe Google, Apple et al should tell T-Mobile to stuff it.

  11. I find this rather curious. Today T-Mobile USA announce that HSPA+ is now available to 85 million people and that by the end of 2010 HSPA+ will be in 100 markets. HSPA+ gives the MNO a theoretical 21 Mbp/s download. In real world numbers that about 10 Mbp/s.

    That is a whole lot of bargaining leverage that magenta brings to the table.