Germany, which is spearheading Europe’s fight against U.S. tech giants on everything from data privacy to Google GOOGL +0.01%’s search engine monopoly, is hoping to scupper net neutrality too.
It is opening another front in the growing battle between Europe and the U.S. on control over the Internet, and toward what some warn is an increasing balkanization of the World Wide Web.
In November, President Barack Obama called on the Federal Communications Commission to declare broadband Internet service a public utility, saying that it is essential to the economy and that the “strongest possible rules” are needed to ensure that the Internet doesn’t become divided into fast and slow lanes.
While net neutrality –keeping all traffic on the Internet at equal speed and quality—has traditionally enjoyed bipartisan support in Germany, the signs coming from Berlin the last few months signal a change.
German chancellor Angela Merkel said at a Vodafone event last week that the government should allow telecoms to offer “special services” at a higher speed, reiterating a point made by German economics minister Sigmar Gabriel in October, when he said he couldn’t imagine a German law on net neutrality passing.
Deutsche Telekom DTE.XE -2.57%, the country’s former state-owned telco, has long seen net neutrality as part of its strategy to beat back the dominance of U.S. tech companies like Google, Amazon, Facebook FB +0.17%, and Netflix, who offer so-called over the top services on telcos’ Internet cables.
“Net neutrality the way it has been sold to the public is, in truth, the privileging of American companies,” Telekom spokesman Philipp Blank said.
In an internal position paper Deutsche Telekom said was drafted last year for talks with politicians, the German telecom giant argues for fighting the power of over-the-top or OTT companies in order to help Europe “regain a leading position.”
Yet, behind the shift is also a governmental push to advance high-grade connectivity for German “smart factories” which seek to link assembly lines over the Internet.
Germany is betting that cloud-based manufacturing processes would help local firms like Siemens SIE.XE +1.09%, Bosch and others maintain their technological edge by allowing products to be fully customizable from the shop floor.
In turn, Deutsche Telekom argues this would require more investment in the physical infrastructure for connectivity, and that it should be able to charge more to both end-users and content providers than they are currently allowed to.
“If we really want to guarantee the quality of data transmission needed for e-health applications, driving cars, and industrial processes, then we need another payment model,” said Mr. Blank of Deutsche Telekom.
But not everyone agrees.
“The Telekom’s position is incredibly disingenuous,” said Jürgen Grützner, chief executive of the German Association of Telecommunications and Value-Added Service Providers, a trade association which represents multimedia companies and smaller telecommunications companies.
“Higher prices won’t trigger investment in new infrastructure,” said Mr. Grützner.
According to a study by Rewheel, a research consultancy staffed by open internet advocates, Germany already has some of the highest prices for smartphones in the EU because of the way Deutsche Telekom charges for data.
Thomas Jarzombek, a member of the German parliament in Angela Merkel’s coalition government argues that the government’s new digital agenda won’t impact consumers.
“We want consumers to have freedom of choice and competition, so Internet service providers shouldn’t be given special privileges.”
Authored by Chase Gummer via wsj.com.