Telcos are Attacking the Internet

I generally try to stay out of politics on this blog, but this time something has to be said, as it affects anyone who uses the internet, at least in the US.

Basically, a number of telcos and cable providers are talking about charging internet content providers -- the places you browse to on the internet, places like Google, Yahoo!, Amazon, etc. -- fees to ensure bandwidth to their sites. Their argument is that these content providers are getting a 'free ride' on their lines, and generating a lot of traffic themselves, and should thus be paying for the cost of bandwidth.

This is patently ridiculous. Content providers already have to pay for their bandwidth -- they, too, have ISPs or agreements with telcos in place, either explicitly or via their hosting providers. Sure, some of them, particularly search engines, send out robots in order to index or find content, but, again, they're paying for the bandwidth those robots generate. Additionally, people using the internet are typically paying for bandwidth as well, through their relationship with their ISP. What this amounts to is the telcos getting paid not just by each person to whom they provide internet access, but every end point on the internet, at least those within the US.

What this is really about is telcos wanting more money, and wanting to push their own content. As an example, let's say your ISP is AOL. AOL is part of Time Warner, and thus has ties to those media sources. Now, those media sources may put pressure on AOL to reduce bandwidth to sites operated by ABC, CBS, NBC, FOX, Disney, PBS, etc. This might mean that your kid can no longer visit the Sesame Street website reliably, because AOL has reduced the amount of bandwidth allowed to that service -- but any media site in the TWC would get optimal access, so they could get to Cartoon Network. Not to slam Cartoon Network (I love it), but would you rather have your kid visiting cartoonnetwork.com or pbskids.org? Basically, content providers would not need to compete based on the value of their content, but on who they can get to subscribe to their service.

Here's another idea: your ISP is MSN. You want to use Google... but MSN has limited the bandwidth to Google because it's a competitor, and won't accept any amount of money to increase that bandwidth. They do the same with Yahoo! So, now you're limited to MSN search, because that's the only one that responds reliably -- regardless of whether or not you like their search results. By doing so, they've just artificially inflated the value of their search engine -- without needing to compete based on merit.

Additionally, let's say Barnes and Noble has paid MSN to ensure good bandwidth, but part of that agreement is a non-compete clause. Now you find your connections to Amazon timing out, meaning that you can't even see which book provider has the better price on the book you want; you're stuck looking and buying from B&N.

Now, let's look at something a little more close to home for those of us developing web applications. There have been a number of success stories the last few years: MySpace, Digg, and Flickr all come to mind. Would these endeavors have been as successful had they needed to pay multiple times for bandwidth, once to their ISP and once each to each telco charging for content providers? Indeed, some of these are still free services -- how would they ever have been able to pay the extra amounts to the telcos in the first place?

So, basically, the only winners here are the telcos.

Considering how ludicrous this scheme is, one must be thinking, isn't the US Government going to step in and regulate against such behaviour? The answer, sadly, is no. The GOP doesn't like regulation, and so they want market forces to decide. Sadly, what this will likely do is force a number of content providers to offshore their internet operations -- which is likely to have some pretty negative effects on the economy.

The decision isn't final -- efforts can still be made to prevent it (the above link references a Senate committee meeting; there's been no vote on it). Call your representatives today and give them an earful. Tell them it's not just about regulation of the industry, but about fair competition in the market. Allowing the telcos to extort money from content providers will only reduce the US' economic chances in the world, and stifle innovation and choice.

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