Greed Watch: The Two Tier Internet

Today’s Wall Street Journal has a nice article on the telco industry’s latest idea for a good money making venture: two tiered access to the internet. The idea here is that as companies like Google, Yahoo and other corporate titans like WFMU provide more video and audio for consumers on-line, “someone has to pay for it”. Vonage and other VOIP providers also might fall into this bucket.

To drive this point home, a Bellsouth spokesman in this WSJ article complains about Google’s freeloading ways as follows: “During the Hurricanes, Google didn’t pay to have the DSL restored. We’re paying all the money.”

If like me you thought that the $30-$80 you send to your phone company every month for basic service constitutes “paying for it”, think again. What telcos want to start doing is charging people like Google and Vonage big piles of money so that their content gets to consumers in a fast carpool lane while the content providers that don’t pay up (and their customers) gets stuck on a less glamorous road with more traffic, fewer lanes and perhaps a few potholes. Needless to say all these costs eventually will get handed down the consumers, effectively making them pay twice for service.

Here at WFMU, where a hefty chunk of a non-profit budget goes to providing 5 live streams and over five years worth of archived audio to listeners, the idea of tiered internet access, as you might imagine, doesnt sound like a very good idea. In a strange twist, one of the regular villains of Beware of the Blog actually plays the role of a possible hero here: the FCC.

As a condition of many of the recent mergers, the FCC has made sure that companies agree to observe “Net Neutrality” which argues that “owners of phone and cable networks can’t dictate how a consumer uses the internet or discriminate against any internet content, regardless of source” (WSJ).

I first saw the term “two tier” internet pop up on Slashdot a few weeks ago in an article about a bill currently being drafted by two republican congressmen (Joe Barton of Texas and Fred Upton of Michigan) that would essentially bring an end to the idea of “net neutrality”. BoingBoing has also had a few posts about this sort of thing slipping into ridiculous terms of service for EVDO (high speed mobile access) connectivity from companies like Cingular and Verizon. Shouldnt anyone spending $50 a month for EVDO access be able to stream whatever they want to on their phone?

The good news? With so many phone and cable options for net connectivity someone is bound to realize that people want unfiltered access to the internet and that  if they pay for bandwith, they excpect to receive it. If the two tier internet does indeed come to be than companies shouldnt be surprised to see lots of customers jumping ship to whoever provides internet service as we currently know it.

As for Google, in yet another display of how smart they are, they have supposedly been looking into  buying dark fiber for quite a while now, perhaps in an effort to build their own network and bypass the telcos all together. Should be interesting.

The article in the WSJ is entitled "Phone Comapnies Set Off a Battle Over Internet Fees". No link available as WSJ online is paid-only.

Comments

[Listener Ralphine]

Why does Station Manager Ken's picture accompany this blog post? Is he behind this two-tier Internet idea?

[RUHawley]

old news is bad news

http://www.pbs.org/cringely/pulpit/pulpit20051117.html

"There will be the Internet, and then there will be the Google Internet, superimposed on top. We'll use it without even knowing. The Google Internet will be faster, safer, and cheaper. With the advent of widespread GoogleBase (again a bit-schlepping app that can be used in a thousand ways -- most of them not even envisioned by Google) there's suddenly a new kind of marketplace for data with everything a transaction in the most literal sense as Google takes over the role of trusted third-party info-escrow agent for all world business. That's the goal."

and that ain't the half of it,

http://www.pbs.org/cringely/pulpit/pulpit20060105.html

"Google is going to let the telco and cable companies burn their capital building out IP-TV, knowing that Google will still be the only game in town for the crux of the whole thing: the ability to show every viewer the specific ads that companies will pay the most to show him at that specific moment. What Google wants to do with these trailers is SERVE EVERY TV COMMERCIAL ON THE PLANET because only they will be able to do it efficiently. Only they will have the database that converts those IP addresses into sales leads, only they will have the servers and disk space close enough to the viewers to feed the ads. Only Google will have the chops to run a constant, real-time auction for the next ad every consumer is about to see, and then serve that ad at the moment the program goes to commercial."

Ooooof.

Rock on.

Rock on.

[Bill - DSL high speed internet access]

I agree with your article about the two tier internet; however, high speed internet will be a factor for a long time.