AT&T’s Ralph de la Vega thinks Netflix, not customers, should pay for capacity upgrades

Ralph De La Vega, AT&T Mobility CEO

When it comes to charging large online video providers to interconnect to last mile ISP networks, AT&T’s Ralph de la Vega believes that someone should pay for the additional capacity needed to meet the demands of delivering online video, so the only question is who.

Speaking at the Rutberg Global Summit in Atlanta on Tuesday, de la Vega, Chief Executive of AT&T Mobility said, “We have to provide additional capacity and so the only question is who should pay for that addition. Should everyone pay for it or should Netflix?”

In response, moderator Rajeev Chand, a managing director and head of research at Rutberg, asked if metered broadband might be the solution, charging heavy users more for the capacity upgrades that AT&T is paying to deliver streaming video traffic. De la Vega shut that down saying, “The pricing models for the customer should be separate from the backbone.”

So consumers dodged that bullet so far, but Chand then asked about the cost of connectivity for the connected car and whether or not that will lead to poor consumer take rates because the cost of connectivity is too high. Audi has announced pricing for LTE connectivity for its forthcoming 2015 A3 sedan, working out to about $17 for a gigabyte each month.

So far GM and AT&T haven’t set pricing for the data plans, although de la Vega said you could attach the car to your current AT&T shared data plan. A GM employee next to me explained that the pricing would come later, and will likely have a trial period associated with it to help get consumers used to the idea of using connectivity. Unfortunately, she said GM doesn’t have information yet on the amount of data customers will use in the car.

Finally, during questioning we got to the fate of WhatsApp and other over the top applications that use AT&T’s network. De la Vega confirmed that those apps will be able to use AT&T’s network, but made a pitch to the audience to continue using AT&T’s SMS service. And when asked in jest about why AT&T didn’t outbid Facebook for WhatsApp, de la Vega joked “Why pay $20 billion for customers that give you 99 cents a year?”

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