April 9, 2010 10:42 pm

Google accused of YouTube ‘free ride’

Some of Europe’s leading telecoms groups are squaring up for a fight with Google over what they claim is the free ride enjoyed by the technology company’s YouTube video-sharing service.

Telefónica, France Telecom and Deutsche Telekom all said Google should start paying them for carrying bandwidth-hungry content such as YouTube video over their networks.

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It underlines how Google’s relationship with leading telecoms groups is becoming increasingly fractious, partly because YouTube video is fuelling an explosion of data traffic on their networks.

Some European telecoms groups fear Google will reduce them to “dumb pipes” because the internet search and advertising company pays the network operators little or nothing for carrying its content.

Telecoms groups are spending billions of euros on fixed-line and mobile infrastructure to increase broadband download speeds and network capacity, but some fear they may struggle to secure a return on their investments.

Global mobile telecoms chart

César Alierta, chairman of Telefónica, said Google should share some of its online advertising revenue with the telecoms groups, so as to compensate the network operators for carrying the technology company’s bandwidth-hungry content over their infrastructure.

“These guys [Google] are using the networks and they don’t pay anybody,” he said.

Mr Alierta said that if no revenue sharing agreement was possible between the internet search engines led by Google and the network operators, regulators should supervise a settlement.

To increase the pressure on Google, the telecoms groups are interested in finding common cause with content owners such as media companies, which get little or no money from the technology company when it aggregates their content on Google News.

Stéphane Richard, France Telecom’s new chief executive, said: “Let’s see the development of digital society in terms of the winners and the victims. And today, there is a winner who is Google. There are victims that are content providers, and to a certain extent, network operators. We cannot accept this.”

René Obermann, Deutsche Telekom’s chief executive, said Google and others should pay telecoms groups for carrying content on their networks.

“There is not a single Google service that is not reliant on network service,” he said. “We cannot offer our networks for free.”

Rick Whitt, a senior policy director at Google in Washington, denied that the internet company was hitching a free ride.

He said Google was spending large amounts on its own data networks to carry its traffic to the point where it is handed over to telecoms companies round the world.

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