Germany joins calls to end Google's "free lunch"

The chief executive of Deutsche Telekom AG became the latest head of a major telco to call for Web companies, such as Google Inc. and Yahoo Inc., to help pay for the billions of dollars required to build and maintain high-speed Internet infrastructure.

“Customers should not be the only ones to pay for this new world,” CEO Kai-Uwe Ricke said in an interview published Thursday in the German weekly business magazine WirtschaftsWoche. “Web companies that use this infrastructure for their business should also make a contribution.”

He warned that “if customers aren’t willing to pay and Google & Co. aren’t willing to pay, there won’t be any high-speed data highways.”

The German CEO’s remarks echo those made earlier this month by John Thorne, senior vice president and deputy general counsel at Verizon Communications Inc.

Speaking at a conference marking the 10th anniversary of the U.S. Telecommunications Act of 1996, Thorne said telcos are spending “a fortune” to build and maintain high-speed data highways that Google and other Web companies intend “to ride on with nothing but cheap servers.” The executive demanded an end to what he called a “free lunch.”

To generate revenue for telcos, Ricke envisions a cost model based on charging for quality of service instead of imposing a general toll for infrastructure usage.

“We’re still in a very early stage of debating how to finance new high-speed data networks moving ahead,” Deutsche Telekom spokesman Mark Nierwetberg said Friday. “Nothing is going to be decided overnight but we need to come up with a way to share the costs of these huge investments.”

One approach is to guarantee basic Internet access at today’s DSL (Digital Subscriber Line) speeds but to charge a “quality-of-service fee” for higher speed services required for huge downloads, such as movies and HDTV (high definition television) streams, according to Nierwetberg.

Ricke’s remarks also play into the debate now raging in Europe about whether or not new high-speed, fiber-optic networks should be free of regulation.

Commenting on Deutsche Telekom’s specific demands to keep its planned new network unregulated, European Union Information Society Commissioner Viviane Reding said Monday that the future of the telecommunications market is not about “establishing new monopolies on the basis of old ones.”

Deutsche Telekom is planning to build a €3 billion (US$3.6 billion) fiber optic network that would link Germany’s 10 biggest cities in time for the start of World cup matches in July.

To bridge the remaining meters from the fiber optic network to homes and businesses, the German operator plans to deploy VSDL (Very High Speed Digital Subscriber Line) technology over copper wires, offering download rates of up to 50M bits per second — around five to ten times higher than most broadband connections.

A further 40 cities are slated to be connected by 2007.

“We need clear legal commitments regarding the long-term regulatory situation if we are to roll out this project,” Ricke said earlier this month.

Vinton Cerf, co-author of TCP/IP and a Google vice president, has warned in recent interviews that the Internet’s freedom could be compromised and consumer choice and innovation limited if protections aren’t put in place to keep the Internet free and neutral.

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