[harshpotatoes]

I feel like this legislature would be a huge cost to startups wishing to do business in Germany, and would likewise be a huge cost to already established businesses.

Of course, I suppose there is the added benefit that many companies would now be legally required to have a physical presence in Germany, requiring the creation of many more local data centers. Presumably this would boost the already high performing German economy.

I wonder how this would effect IRC servers. Would you have to forbid connections from Germany if there already was a user connected from Germany?

In that same line of questioning, wow would a teleconference work? Two german companies and two american companies are communicating in a group call via skype or something. The server is located in the US. Does this mean that the two German companies are communicating with each other and therefore the server must be located in Germany? If the US had the same laws, does this mean it is impossible for the group call to be made at all?

How much more difficult would it make telecommuting if multiple telecommuters are located within Germany?

What if user A located in germany wants to send an email or instant message to user B in germany, but is VPNed to a server in another country. Maybe User A is on a business trip to germnay and is VPNed to their work, or something. How could such a message be routed completely within the German borders? Would the VPN have to detect the nature of the message and reject it?

Am I understanding everything correctly?

[memracom]

I don't think that you are understanding it correctly. First it helps to understand some history. In the ancient voice telecoms networks of the 20th century there was the principle that "he who dials the number pays the bill". Therefore, when a telecom provider (like DT) tried to connect a call with another telecom provider (such as BT in the UK), both telecoms companies knew that there was money flowing into DT's pockets. So the recipient's provider (in this case BT) wanted some of that money. This became a principle worldwide that interconnects between two networks had to be bought and paid for. Of course, calls went both directions over the interconnect so the concept of peering was born. What it meant was that the two companies would count up the calls at the end of the month, and the one with the most calls would pay the other company.

Then came US telecom deregulation, CLECS, the growth of the American-centric Internet, and a new way of making connections. On the Internet, one party opens a socket and superficially that seems to be similar to dialling a phone call. But the big difference is the the party opening a socket is not paying anyone a fee to do this. And they aren't paying a per-minute fee for using the socket. In fact, the party opening the socket is paying money for the use of the whole network, and the party whose socket is being opened is also paying a fee for the whole socket. Thust the concept was born that interconnects should be free because they are a cost of doing business as an ISP.

And then began much confusion and strange business dealings as telecom management wrestled with how to reconcile these two worlds. The result was that deregulated US providers charged a lot less for interconnects, and the international telephone calls of the world started to take a detour through the USA. And internet connections did the same thing.

So basically, there should be no extra cost if Germany implements this. Some companies might get into arm-twisting battles if significant traffic flows shift from one circuit to another because they will likely need to upgrade some interconnects, but that is just a one time hit. It should not increase fees at all.