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Monday, April 17, 2006 12:00 AM

The corporate toll on the Internet

Telecom giant AT&T plans to charge online businesses to speed their services through its DSL lines. Critics say the scheme violates every principle of the Internet, favors deep-pocketed companies, and is bound to limit what we see and hear online.

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Thursday, May 18, 2006 06:26 PM

There's irony as well as precedent here

The precedent is that the AT&T plan is analagous to the decades long effort of cable providers to vertically integrete their marketplace and limit competition while pushing for further deregulation.

The irony is that the telephone companies (clarifying: the old telcos, not the new AT&T) were the main competitors of cable. Cables and telcos still compete, but they're well on their way to carving up the market between them, and helping each other along the way. It's rather like two drug lords deciding to carve up a city into sales territories; cooperation like that doesn't help the city whatsoever, but it keeps the two competitors from having to engage in costly war.

Which is why the cable industry, through its lobbying group, the National Cable Television Association, has come out in favor of the AT&T scheme and against network neutrality. Hey, the cable companies are already vertically integrated, and they want to keep on building their Tower of Babel.

Cable in the US is marketed in a very backward fashion. You can't buy a la carte, as you can in Canada. You have to buy a "basic" tier to start with that includes dozens of crappy religious and shopping channels. But this slug of channels is cheap to provide and gives cable leverage over subscribers and more of a revenue stream, too. You must take the bad with the good. It'd be like going into a store to buy shoes and being told you must buy a shirt, too.

Likewise, Internet service in the US is already far more expensive than in other industrialized nations, especially those in Asia. The AT&T scheme will exacerbate that widening gap. Another example of American business ingenuity running amok, and the typical US consumer footing a bigger bill as a result.

The telcos and cable companies are alike in one key respect: Neither likes competition, and competition from the little guy is the first kind they want to lose. Whenever they take each other on, the solution tends to involve mergers. They are top down in their management schemes. Central command and control is their operating system. They talk a lot about "choice" but move customers sharply and smartly toward heavy duty bundles of service that might save you a few bucks but mostly save the provider from losing another customer.

So, if this scheme isn't thwarted, the American marketplace will get a huge dose more of what we already are awash in: Marketplaces that offer seemingly endless choices, but not very many that most of us really want or need.

One other point: Obervers should bear in mind that the AT&T scheme goes beyond its direct interest in promoting DSL service. AT&T also provides fiber backbones to carry signals from node to node. The long-throw transmission systems are more important in this context. Which is to say: It doesn't matter if you subscribe to AT&T DSL service; this scheme will affect you.

Tuesday, April 25, 2006 09:45 AM

Corporate Toll?

I think it is becoming all too acceptable to think that just because a company is big it somehow loses its property rights. That is, they own the backbone. If they want to create a new faster service and charge more, well then it is their right to do so. But don't go assuming they will block content or services. There are plenty of options and the consumer would never stand for such a scheme.

Thursday, April 20, 2006 12:43 AM

Google, Amazon, etc. DO PAY for their pipes too.

I don't quite get this whole push. All big bandwidth players DO pay big $$$ for their big pipes. You think huge multiple backbones like those are free just because they are content providers?

They all pay fair and square for their hookups. Unless you really think that their ISP's are presently selling at a loss...

So, that means that AT&T et al want to charge EXTRA for being somewhere in the middle, and/or at the little guy's end. Sounds like a simple money grab to me. Can you say... EXTORTION? The few big guys with the wherewithal to lay physical lines throughout the real tangle of powerpoles and realworld realestate, now want MORE MONEY. who cares where from (we do).

The real ethical answer to this dilemma is to legislate net nuetrality, HARD & FAST. Then let the big guys charge more, evenly and fairly, to everyone connected to their services. So your endpoint ISP's pay a bit more and charge thier end customers more, and offer a better service for the slightly higher prices. Goog and co. choose to pay more for their big-ass pipes, or choose to buy cheaper/slower ones, and fair accordingly.

In the end, like conservation of energy, we all pay the total cost of the tech. plus a percentage markup. We don't need certain companies screwing us out of inflated markups for themselves, lest some other sector get starved unjustly.

And I think that the point that AT&T & company are near-monopolies lays them open to expect whatever regulations are required for the public good. Let them recoupe their costs with net nuetrality, I'm sure it won't slow them down more than a VERY FEW % of profit anyways (but you can bet they'll whine loudly).

Monday, April 17, 2006 07:26 PM

Thank you Farhad Manjoo

Network neutrality (or the lack of it) is an extremely important issue. I applaud Farhad Manjoo for finally writing an article about it for Salon.com.

Imagine an internet with only 3 real websites, and a handful of tiny, unimportant ones. Is this where we are heading?

Keeping the internet neutral is extremely important for the average user, for the innovators, and for small businesses. One of the major reasons why the internet has become such an important part of our lives is exactly because it is a dumb network.

Most people don't know or don't care about how important it is because understanding what neutrality means is complicated and technical, but word must get out and people must understand how it can affect their lives.

Monday, April 17, 2006 04:22 PM

Still more comments on comments

  • Re: Bonnie's comments about "we're the ones using the pipes", there are 2 different types of pipes we're talking about here. There's the Customer-facing pipes that run to your house / your neighborhood. You're using those. There's also the honkin' big pipes that actually connect the main nodes to each other. Using the always-valuable road analogy, one are the local roads & the other is the intrastate highway system. AT&T is proposing that they set up HOV lanes on the highways (through the core), but to do that they need to have the correct on-ramps (inspection / queuing at the edge). To echo what somebody else said earlier, AT&T is the one (in many cases) paying for the big pipes, and they want to make sure that they can get the "important traffic" (read: customers who pay a surcharge) through the congestion as fast as possible. So it's "what if they put a toll booth in the HOV lane".
  • Re: hmarks' comments about "it's like a cable modem", no, it's not. Cable runs a very big pipe to a neighborhood, and each house connects off of the main pipe, draining a little bit of the bandwidth (serially). AT&T is doing DSL connections, which means it's running a separate phone line to every house (a hub & spoke, running in parallel). What AT&T is proposing is that they either analyze the data coming through their pipes to classify them properly and/or just shove all of the data from the "good" customers (read: people with $$$) into the "fast" queue.
  • To Mark G's point on the big companies spending billions on Flintsone-esque hardware...that I have to disagree with. I'm somewhat familiar with AT&T's infrastructure & I'm very familiar with BT's infrastructure, for example, and these are top-dollar new boxes in many cases. A Juniper Tx Matrix device costs about $2m or so (maybe $3-5m fully loaded) and can run 2.5 terabits of data per second. Again, these are honkin' pipes. Admittedly, you could bypass the last mile if you want to set up a wireless network with a small connection, but that's not what AT&T is talking about.

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