“Das Geld dafür geben die Anderen”

“Other people are paying for it,” how financial reporter Frank Bethmann commented the U.S. company Verizon’s “schwindelerregend” offer of $130 billion to buy out British partner Vodafone’s stake in their U.S. joint venture Verizon Wireless. In the 02 Sep 2013 announcement of the sale, Verizon said as part of it they intended to borrow $25 billion one week later at the currently very low interest rates; that would have been the largest amount ever borrowed by a company in the history of the world apparently.

Update on 12 Sep 2013: Verizon’s $49 billion Unternehmensanleihe [“company loan” i.e. corporate bond] “emission in eight tranches at varying interest rates and terms to investors around the globe” was the biggest ever, according to manager-magazin.de, adding that the takeover itself was also the third-biggest ever.

This is not the only vertiginous telecom merger in the works. There’s two in the German market as well.

On 23 Jul 2013, Spanish Telefónica’s German subsidiary O2 announced that it wanted to buy the Dutch KPN’s German subsidiary E-Plus, though “only” for five billion euros. The resulting company would become the German market’s largest mobile phone provider (43 million customers), followed by Deutsche Telekom subsidiary T-mobile (37 million customers) and then the British Vodafone (32 million c.). The merger required approval from German and E.U. competition authorities.

Update on 12 May 2014: The German Monopoly Commission [Monopolkommission] told the Frankfurter Allgemeine Zeitung they expect the E.U. to set serious competition-saving conditions for approving Telefónica’s acquisition of E-plus, including that there will still be four mobile telephony providers in the German market after the merger. “Abstract concessions and offers won’t do it.” Three mobile phone providers competing in the German market would not suffice because E-plus was the one that stirred up the market the most and it would be the one disappearing.

Update on 13 Sep 2013: Now British Vodafone is purchasing the Munich-based Kabel Deutschland, “Germany’s biggest cable network operator,” at ~8.5 million television households,” for ~11 billion euros (~7.7 billion for ≥75% of Kabel Deutschland’s stock and the rest to cover Kabel’s debts; stock cost to be announced Monday 16 Sep 2013), according to Spiegel.de and manager-magazin.de. This will increase Vodafone’s competitiveness with Deutsche Telekom in the German market selling wireless and landline telephonery, television cable and internet access. European competition authorities approved the deal on 20 Sep 2013.

Huge telecom mergers & acquisitions could be motivated by more than just the roseate future of voice and internet communications plus current rock-bottom interest rates. If telecom industry people believe governments will stop defending net neutrality and consumer privacy, they will fear they must join a large existing telecom and fight to expand it, or die. They will not think risky entrepreneurship or small-to-medium-sized companies are an option. If a telecom gets big enough in a deregulated market that includes suspicionless surveillance, the money will sort itself out somehow. In regulatory situations where governments have to grant unusual concessions to big telecoms, governments will grant unusual concessions to big telecoms.

(Doss   GELD   dah foor   gay ben   dee   ON dare en.)

“Für viel Geld, die Filet-Stücke des Internets erhalten”

“For a lot of money, receiving in return the prime cuts of the internet,” said European Parliament member Jan Philipp Albrecht (Green party).

E.U. commissioner Neelie Kroes announced a proposal that she said would guarantee net neutrality in the European Union while allowing companies to purchase advantages in the tubes. Critics said her doublespeaked plan is the opposite of net neutrality and would create the dreaded “two-class internet,” although as Spiegel.de pointed out it would fragment internet access into many more than two classes. Dozens if not hundreds of access classes would spawn, with opaqueness for consumers and many new sources of income for middlemen. Ms. Kroes introduced her plan on Thursday, 12 Sep 2013, saying she hoped to implement it rapidly. She praised her plan as the first time net neutrality would be protected throughout the entire European Union.

The proposal must be approved by the E.U. Council and the E.U. Parliament. There will be an E.U. parliamentary election in April 2014.

(Foor   FEEL   GELD   dee   fee LAY SHTOOK eh   dess   IN ta nets   err HALT en.)

Verschlüsselungspflicht für Telekom-Unternehmen

“Mandatory encryption for telecom companies,” one solution proposed by the opposition to Angela Merkel’s coalition in the wake of Edward Snowden’s surveillance revelations. Another solution, discussed by the ruling coalition, was supposedly transferring responsibility for saving searchable copies of all communications from public-sector government agencies to private-sector phone companies.

Update on 02 Sep 2013: NYTimes.com reporting and others’ follow-ups appear to indicate that the company AT&T has been keeping its own copies of phone communications, more than just “metadata,” and people have used it to access 26-year-old phone calls. AT&T employees could be hired to help government agents search their difficult database.

Update dated 4 July 2013: Holland’s Data Protection Authority issued a report on their investigation into mobile network packet inspection by KPN, Tele2, T-Mobile and Vodafone, finding that the companies illegally saved individual customers’ online data, such as websites visited and apps used. The data was furthermore saved in a “detailed” manner.

(Fer SHLÜSS ell oongs flichh t   foor   TAY lay kom oon ter NAY men.)

Neelie Kroes

The E.U. commissioner currently considering eliminating net neutrality. This is the same official who invited Karl-Theodor zu Guttenberg (Baron Karl-Theodor Maria Nikolaus Johann Jacob Philipp Franz Joseph Sylvester von und zu Guttenberg) (C.S.U.) to be her advisor on internet freedom after the internet forced him to resign as Germany’s defense minister when a plagiarism wiki discovered he’d copied parts of his doctoral thesis.

Zwei-Klassen-Internet

“Two-class internet,” Deutsche Telekom’s third current scandal: they plan to charge content providers for not slowing down their content’s delivery, ultimately giving large, financially-established firms an advantage over smaller firms and startups.

By also “throttling” consumers’ internet access speeds, Telekom was planning to cash in at both ends of the pipe. Deutsche Telekom has now conceded to the outrage by announcing they won’t throttle consumers’ internet access as hard or as fast as originally announced.

Meanwhile, the Wall Street Journal wrote on 19 Jun 2013 that large US content companies have already been paying tens of millions of dollars per year per company to large phone and cable internet companies in the USA to keep the network operators from slowing down delivery of their content. The same large content companies could be blackmailed by similar network controllers in every country in the world.

(Tsv eye CLOSS en Internet.)

Die Nachrichtenfrage

“The news question.” Where do you get your news? What reliable news selecters and sharers have you found? What conduits bring you your news?

(Dee   NOCHH richh ten froggah.)

#Drosselkom

Twitter hashtag for snark about Deutsche Telekom’s second current scandal, their unilateral decision to choke new flat-rate customers’ Internet tubes after 02 May 2013.

Telekom’s decision against net neutrality might have given permission to its competitors to take similar steps. In April, internet policy activists were concerned that Arcor purchaser and important ISDN competitor Vodafone had started looking into data throttling as well, but that company responded by saying it was not currently considering so doing.

In a 30 May 2013 interview with the Frankfurter Allgemeine Zeitung, the president of the German anti-cartel authority [Bundeskartellamt] said that if Deutsche Telekom planned to allow providers to buy their way out of Telekom’s plans to slow down data to its flat-rate consumers, this might be anticompetitive because smaller providers might have trouble paying the new fees charged to resume normal data access or “purchase a priority treatment” as he put it. Yet the anti-cartel authority had decided to neither investigate nor prosecute for anti-competitive market access limitations in this case, merely to get “the clearest possible picture” of the situation. They were concerned that Telekom provide better information to its customers about whether they were close to exceeding data limits and about which services were counting toward customers’ volume limit (companies have until 2016 to make priority partnership agreements with Telekom to have Telekom stop counting their content toward Telekom customers’ volume limits). Also, the president of the anti-cartel authority said, the networks authority [Bundesnetzagentur] would be determining whether network neutrality was being violated enough to require further investigation. The F.A.Z. noted that Telekom is considered a major market player because it controls ~45% of the German DSL market, with ~12.4 million connections, according to the Bundesnetzagentur.

(DROSS ell com.)

Das Vectoring

In the first of its two current scandals, Deutsche Telekom wants to use so-called “vectoring” technology to reduce interference between bundled strands in copper-wire DSL internet connections by increasing and decreasing signals to balance out a more efficient overall electric signal transmission. “Vectoring” requires the Kabelverzweiger, the “cable brancher” or “cross connect” gray box by the side of the street, to be connected to a fiber optic line. Powerful computing is required at the phone company end to “precalculate” the “error suppression” for all transmissions on all DSL lines in the bundle simultaneously in real time. Maximum efficiency requires one central administration of all DSL lines, by one company in other words.

Telekom claims its vectoring only works when a single company controls all the lines at the gray box; “no other companies could then install their own technology there,” the F.A.Z. wrote, voicing the worry about fairness to companies in competition with Telekom. Fairness at the consumer end is also an issue, inter alia because vectoring requires modems specially modified for vectoring technology. Manufacturers such as AVM are already shipping only “vectoring-friendly” modems.

Just before the long Christmas break in 2012, Telekom submitted a request to the Networks Agency (Bundesnetzagentur, BNetzA) to modify BNetzA rules to allow its vectoring. After receiving the petition, the Bundesnetzagentur asked companies in the sector to amicably agree on solutions amongst themselves in order to reduce regulatory intervention to a minimum. Deutsche Telekom also tried to calm remonopolization fears by e.g. saying that if competitor companies had connected their own fiber optic lines to gray branching boxes, they could use its vectoring technology too. It also had some new last mile products it wanted to rent out to them.

On 15 May 2013 the Bundesnetzagentur issued a draft approving the partial deregulation—which still must be approved by the EU Commission and the regulatory authorities of the Member States which would have one month to review the proposal after BNetzA’s 24 Apr 2013 hearing—allowing Deutsche Telekom and its competitors to use Telekom’s vectoring while imposing conditions intended to mitigate the old monopoly’s sole control of branching boxes, though the items in this list indicate apparently not to mitigate possible data privacy repercussions caused by the central computational process managing the balancing out of every DSL line. These conditions included:

  • Around questionable boxes, at least one other provider must market a fast internet connection, such as television cable.
  • For Telekom to use vectoring at a box, more than one competitor must be connected to that box.
  • Telekom’s competitors in turn are required to use Telekom’s vectoring in all boxes to which they have connected. Does this give Telekom’s servers access to all those end consumers and their data?

Alternatively, non-“vectoring” options for speeding up DSL connections include so-called “bonding,” bundling in which incoming data packets are distributed through two of the usually four available lines of a DSL connection rather than just being sent through one. Routers that can bundle the unsorted incoming packets will have two DSL inputs instead of just one. There is also a “phantom bundling” option that can take two (four-line) DSL connections and use one line from each connection to create a third, “phantom” circuit that will suffice to “modulate up” DSL signals. It is claimed that Deutsche Telekom’s “vectoring” would be faster than these bundling alternatives and/or speed them up by balancing away the signal bleed between copper wires.

Some Germans are concerned that their internet service providers already are claiming internet speeds they don’t actually deliver or secretly throttling cheap connections; to address these concerns the Bundesnetzagentur studied German broadband quality in 2012 and posted a link to a “broadband test” and a “net neutrality test” (that can’t be run on a wireless network) for consumers on an “Initiative Netzqualität” website scheduled to be shut down in late June 2013. The net neutrality test requires Java. Both tests are for stationary internet connections; neither can be run on a mobile network. Speaking of mobile internet: now that Deutsche Telekom has received approval from US antitrust authorities to merge T-Mobile with competitor Metro PCS, they plan to use some of Deutsche Telekom’s new cash liquidity to build mobile infrastructure in the USA.

Datendrosselung

“Data throttling.” Deutsche Telekom, whose subsidiary T-Mobile stood out from other US telephone companies because it was never explicitly mentioned in the press as having given its customers’ data to the George W. Bush administration, has announced that starting May 1, 2013, it will slow down internet traffic for its flat-rate German customers above a low monthly data limit of 75 GB. There will be no appeal. People are furious. Critics say there may be a competition issue because Telekom’s own online content, such as from its entertainment channels, will not count toward the monthly data limit. If so, this might be a case for the Bundesnetzagentur, the German Federal Networks Agency for Electricity, Gas, Telecommunications, Post and Railroads (BNetzA).

Update on 30 Oct 2013: A Cologne court forbade Deutsche Telekom to slow down the data supplied to its flat-rate internet customers, in a lawsuit brought by the North Rhine-Westphalian Consumer Protection Agency [Verbraucherschutzzentrale Nordrhein-Westfalen e.V.]. Deutsche Telekom was planning to reduce these household internet connections to as low as <10% of normal surfing speeds.

Süddeutsche.de reported that the court said Telekom could slow down its customers’ internet access but not without changing its current marketing. Without fixing the problem, “Drosselkom” had tried several responses to the outrage sparked by these plans this year, including offering a second more expensive flat rate plan that really, they swore, this time, would not be subsequently decelerated. Competitors 1&1 and Kabel Deutschland have been capping their customers’ internet connections too, SZ reported. They quoted a pundit as saying the Cologne Landgericht’s verdict was important for starting to create limits to contracts that have been being arbitrarily changed by companies. Telekom plans to appeal.

(DOT en DROSS ell oong.)

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