Google’s French Ambush Bodes Ill, But For Whom?

January 21st, 2013 by · Leave a Comment

Just before the weekend, the CEO of France Telecom – Orange suggested that they’ve come to terms with Google and will be compensated somehow for the traffic the content giant sends to their network. Details remain rather scarce, but it comes after a few months of anti-net-neutrality rumblings I’ve been watching out of France generally and that advertising-filtering incident with Free a week or two ago. While it’s not clear just what has or hasn’t been negotiated, forced, volunteered, or whatever, exactly how is anything like this supposed to work for the rest of us?

Google is big, and therefore the obvious target. And the French government has been sympathetic toward its last mile operators, partially because they’re French but also partially because they pay French taxes and Google like multinationals worldwide arranges its accounting to avoid higher tax countries where it can. But what do we do when we move beyond Google? How big a content provider do you have to be to need to pay every Telecom in France a fee to reach the French?

No seriously, how big do you have to be?  Telecom Ramblings is a content provider, can they come knocking on my door? Sure it wouldn’t be worth it to them to go after tiny targets, but in theory could they?  What is the threshold?  Is it profitability, revenue, traffic, traffic asymmetry, where I buy traffic from, where I pay taxes, or what? If we’re going to play Robin Hood to pay for better infrastructure, someone’s going to have to codify who’s rich and who’s poor or all hell is going to break loose.

And given a threshold, does this approach mean that Google and every other content provider in the world that passes it would have to negotiate a separate traffic exchange agreement with every single last mile provider on the planet that says they need to? That’s a recipe for a seventy-metric-ton bowl of spaghetti, not the internet.

Ok, leaving my questions of scale aside for now, let’s quickly speculate about just what Google and FT/Orange might have agreed to. While there’s been lots of talk about making content providers pay, precious little of it has talked about how it would work.

My understanding is that Google has been reaching most French customers through IP transit, at least part of which is purchased via Cogent (and delivered through Cogent’s peering connections with French service providers). If they haven’t come up with a brand new business arrangement in which traffic that arrives through a peer actually gets charged *again* by the receiving party depending on the origin of the bits, then what I suspect is that Google may simply have agreed to buy transit or paid peering from FT/Orange to replace at least part of it.

After all, isn’t that the easiest way for Google to put out this fire?  FT/Orange can’t very well complain that Google isn’t paying for using its network if they are actually paying IP transit or paid peering for it.

In other words, the result of this winter’s French internet ambush may simply have its telecoms able to force arbitrarily large content providers to buy their connectivity to French customers from a French provider rather than a major backbone.  Buy French bandwidth or you won’t reach the French audience – protectionism in the name of net neutrality?

But I’m not sure this would have the desired effect of bringing big content’s dollars to the aid of infrastructure.  If this sort of thing catches on and does manage to find a way to scale, then Google may pay a little more than it  before but mostly it would just shift its bandwidth budget from the backbone to the last mile, cutting out the middle man with regulatory backing.  That could simply shred the current economics of the internet backbone business, and fundamentally reshape the industry in unintended ways.

Categories: Government Regulations · ILECs, PTTs · Internet Traffic

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