European Carriers Want Apple to Pay for iTunes Data Usage

Apple iTunes logoIt looks like it is not just AT&T that is having problems handling the enormous data usage generated by Apple’s wildly popular iPhone model of smart phones—European carriers are also feeling the weight on their networks. However, unlike AT&T, who has remained silent about how much network usage the iPhone consumes, European carriers France Telecom SA, Telecom Italia SpA and Vodafone Group Plc want to negotiate a deal that will “require content providers like Apple and Google to pay fees linked to usage” according to Bloomberg. Hmm, something smells fishy doesn’t it?

Apple already angered European cellular carriers earlier this year when it came to light that the company has plans for a proprietary SIM card system that allows it to basically cut carriers out of the game and turn them only into network connection providers—similar to traditional ISPs. While Apple has reportedly backed down due to threats from carriers that they will stop subsidizing the iPhone if the company does this, Apple certainly is still scheming on how to implement it without losing valuable carriers subsidizes. In fact, Robin Bienenstock—an analyst at Sanford Bernstein—recently said that Apple is a “frenemy” of carriers.

But wait, why would carriers care if a user consumes their monthly allotment of data bandwidth downloading content from iTunes or other content providers? Remember back when carriers were the ones selling ringtones, music and ‘apps’? Yeah, that might feel like forever ago but the success of smart phones has decimated the profit models of carriers. They are terrified of just becoming glorified, wireless ISPs similar to Comcast and Verizon (not Verizon Wireless) in the United States.

European carriers want Apple to pay them each time their content goes out over their networks—even though customers are paying for the content from Apple and the service from the carrier. It’s a lot like the whole “net neutrality” debate going on here in the US. Long story short, carriers are greedy and don’t want to accept the fact that they’re just the ones getting us on the internet and giving us a cell phone number. Trying to force Apple to pay them each time it sends a movie or song to an iPhone or iPad isn’t just foolish, it’s plain wrong. Customers are the ones paying for data service and they shouldn’t be forced to accept higher prices just because of the method they choose to consume their monthly bandwidth allotment.

Let me know what you think of this big mess in the comments. Should content providers be forced to pay carriers just to be allowed on their networks?

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