So let me get this straight. There is a "private" company owning most (if not all) of the Internet infrastructure in this country and to boost their profits they have conceived a scheme where they are going to discriminate bits that are send through their infrastructure by "deep scanning" and determining what bits are send through to bill accordingly?
Wouldn't it be easier (and cheaper) for them to just increase costs of their infrastructure across the board? Call me paranoid but I suspect that there is something else going on here, these guys are determined on their "deep scans".
Wrong on both counts. First of all, KPN is the largest but by no means the only telco. The only special position they have left is that because they used to be the state telephone monopoly they still own most of the last-mile copper. But they are forced to lease those at cost to the competition.
Second, their deep packet inspection strategy applied to mobile only. This isn't about the cost of the infrastructure, this is about the enormous loss they suffer from people switching from traditional, highly profitable telco services like voice and texting to internet-services like VOIP, Whatsapp etc.
They cannot compensate those losses by increasing the cost of bare internet without increasing what they charge so far above the actual cost that it would spark an instant consumer revolt. If all telcos would do the same, it would also set off anti-trust actions. If they wouldn't, well then everybody would simply move to the telco that charged considerably less (and open the door for new players). Mobile in Europe is a very competitive market
Bottom line: they've dug a very deep hole for themselves by relying on an unsustainable high profit margins on services people don't need anymore. And they've just dug it deeper by doing something silly that triggered net neutrality laws that otherwise wouldn't have happened.
KPN is now one of many ISPs in Holland. They were the former telco monopoly (think AT&T), and as such they still own a large share of the physical infrastructure.
They are also one of several Wireless providers in the country (along side T-Mobile, Vodafone, etc). Seeing this as the future they completely reshaped their business model behind 'mobile'. Trouble is, they based it all on the continued growth of SMS, talk-time minutes, and international calling (NL is small) with 'internet' as a cheap add-on. Oops.
WhatsApp and other chat programs are swiftly murdering SMS on mobiles here, and Skype and other VoIP usage is also picking up. KPN wanted to stop the bleeding by imposing a tax on these apps and accidentally leaked their Deep-Packet-Inspection plans. Other mobile providers admitted they also had similar plans.
The DPI plans probably would have failed in the long run anyway (SSL/VPN), but thankfully NL got a net neutrality law out of the whole fiasco.
What you're saying is not exactly right. They own most of the Wired internet infrastructure, but when it comes to Mobile there are 4 networks with their own infrastructure. This deep scanning was only meant for mobile internet, AFAIK. If 1 company would increase prices on data (or certain kinds of data), they'd lose customers. If they'd do it together, they'd get huge fines for forming a cartel.
No, the thing is that KPN does not only provide internet, but also phone calls and SMS. So what they want to do is e.g. make Skype traffic from smartphones more expensive to keep their phone and SMS alive.
Note that there is an exception if the ISP does it on ideal grounds, tells the user and doesn't use it for its own profit. This was an amendment by a extremist christian party that accidentally got voted in by the labor party...
This does effectively block the EU from going in the complete opposite direction (as in: explicitly granting ISP's the right to discriminate internet-traffic). It would mean invalidating Dutch net-neutrality law, which is politically virtually unthinkable.
This may not be a guarantee of future net-neutrality in the EU, but it is not insignificant. It for instance means that a backdoor approach like Googles deal-with-the-devil "net-neutrality" proposal (http://www.eff.org/deeplinks/2010/08/google-verizon-netneutr...) is something that is now very unlikely to happen on an EU-wide level.
Wouldn't it be easier (and cheaper) for them to just increase costs of their infrastructure across the board? Call me paranoid but I suspect that there is something else going on here, these guys are determined on their "deep scans".
And what about SSL?