Deutsche Telekom and Meta dispute peering arrangements

Blog | October 2, 2024 | 3 min | Fergus Wills

Meta & Telco CSP – A New Status Quo?

Over the last few weeks Meta has enjoyed some mixed feedback with large Telecom organizations. With the recent announcements in respect of APIs and relationships, Meta and Vodafone promoted a cooperative environment where content (in this case Instagram REELS) would be optimized for delivery video content across 11 European markets^[1]. We noted at the time that this is a good start for cooperation but there were issues of access and size of telecom organizations when negotiating such arrangements.

An old dispute between Deutsche Telekom (DT) and Meta resurfaced last week with challenging press releases from both sides^[2]. Many are also linking this to the discussion on Fair Share,^[3] where European telcos were seeking a contribution to cost of networks, based on an asymmetric data volume coming from the large scale content providers.

In the DT case it is a little different but may have ramifications on both sides. Meta connected to DT directly with dedicated interconnectors. DT charged an annual fee for this dedicated access (circa €5.8m annually^[4]). When the contract came to be renewed, Meta did not renew but continued to use the same access. Invoices were sent but fees remained unpaid. This has been litigated and DT won. Since then, Meta has reverted to a settlement free peering model and thrown some fud at DT, claiming it should have been allowed to use the dedicated access free of fee and settlement.

Naturally this has rekindled debate about Fair Share^[3] and net neutrality^[5]. This is a two-sided question however – as Meta preferred dedicated access, and were originally happy to pay for the privilege (for 10 preceding years). In fact, a large CAP paying for a fast lane does seem contrary to positions held on net neutrality^[2].

Meta is using a shared peering arrangement and they are complaining about possible future quality degradations or neutrality infringement. It seems in this case, that it is really only their quality of access they care about (and not other content providers in the shared interconnector). There is no evidence of a drop in quality or experience at this time.

This throws open the discussion about peering arrangements (as in the US for example, these can be paid for to guarantee quality^[6]). It does also raise a question about who is in control of the network – as DT were within their rights to ask for continued payment for dedicated access, and won the court case.

On a more philosophical point it also highlights an inequality in network access – that the concept of net neutrality has holes in it when large CAP can try to dictate their terms of access to the market.

The re-routing of data by Meta in a new peering arrangement, has led to a new status quo with DT. Meta assertions of a potential loss of quality of service, or net neutrality infringement, have been unfounded. However, it may also raise eyebrows at CSPs like Vodafone for future cooperation arrangements on APIs if Meta can attempt to dictate terms and argue in the court of public opinion after being on the wrong side of a decision in a court of law.