'Course what we'd really like to do is "prioritize" some of these services right out of business …

Net neutrality, in the real world, is a relative term. At least to telecoms like BellSouth and AT&T who continue to lobby for the right to create a two-tiered Internet, where their own Internet services would be transmitted faster and more efficiently than those of their competitors (see ““Interesting approach, Bill; why don’t you try it on your phone network first?” “Don’t wanna pay? Vinnie, show the gentleman how you can squeeze that T1 down to 56 baud,” and “It’s against Google policy to negotiate with terrorists“). On Monday, AT&T Chairman and CEO Ed Whitacre warned that content providers who use its pipes to deliver bandwidth-taxing services such as movie downloads would have to pay additional fees to have those services “prioritized” and transmitted without interruption. “We have to figure out who pays for this bigger and bigger IP network,” Whitacre told the Financial Times. “We have to show a return on our investments. I think the content providers should be paying for the use of the network — obviously not the piece from the customer to the network, which has already been paid for by the customer in Internet access fees — but for accessing the so-called Internet cloud. If someone wants to transmit a high quality service with no interruptions and ‘guaranteed this, guaranteed that,’ they should be willing to pay for that. Now they might pass it on to their customers who are looking at a movie, for example. But that ought to be a cost of doing business for them. They shouldn’t get on [the network] and expect a free ride.” Sigh. By good fortune, not clever innovation, the telecoms found themselves sitting at a choke point in the network, and having fumbled early attempts to cash in, now expect to collect tolls from more successful companies. What we don’t need is a new layer of parasites auctioning off the right to reach us. Ed, you just keep up a network that works equally well for all content, and we’ll set the priorities.


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  • You keep saying that the telecom companies are parasites for wanting to charge for higher bandwidth rates, but think of it this way:

    1. The nature of Internet traffic has changed dramatically over the last five years.

    2. The underlying bandwidth requirements are 10x what they were five years ago.

    3. Subscriber fees are under pressure due to intense competition.

    4. Bandwidth and network providers don’t produce the content that fills up their networks, so they don’t replace slowing subscription revenues there.

    5. The need for network upgrades is accelerating due to the needs of content providers.

    It seems logical that major network carriers would be paid for deilivery by the people who drive the accelerated need for bandwidth. Plus, charging content providers for this bandwidth doesn’t seem to be a regulated area. Therefore, Apple, Real Networks, CNN, and other bandwidth hogs better get used to it.

  • Nofah Kinway

    Parasitism is a way of life and business at AT&T. I work for an AT&T contract service provider reviewing business internet client billing errors and disputes. Parasitism is evident in every way they do things.

    I can offer two bits of insight as to why AT&T is bad for clients and the rest of us.

    1) AT&T’s accounting and billing infrastructure is obsolete. I have to rely on at least SEVEN unrelated platforms with no interoperability — not even a shared user interface — to resolve claims. One IBM system dates from 1979, another is a pre-Compaq DEC system. None can meet the requirements of current transaction processing needs. My small department’s salaries alone total more than $1.6 million a year, and that’s JUST FOR CORRECTING BILLING ERRORS. Still, AT&T refuses to consolidate its databases, ostensibly because of cost. One can only speculate on the cost of AT&T’s incredible operationaly inefficiency. The profit margin must already be obscene.

    2) AT&T Internet infrastructure is not secure. Once again, this is a business, not technology, issue. Sure, AT&T can install all the firewalls you want, but if their contractors (e.g., my employers) don’t have secure systems, any script kiddie can find ways to learn about every piece of hardware used by an AT&T internet services client, plus every IP address, system protocol, usernames, and more, just by poking in the right place. It’s on one of those seven unrelated platforms. If script kiddies want to hack Global Giant Corp, they just need to know where to look up the information that shows them the open doorway.

    And Evil does get in. When I moved to a new cubicle and desktop PC two weeks ago, I ran AdAware and removed nearly a dozen critical spyware apps and many more lesser violators. There’s no telling what data they were sending out.

    Your argument about bandwidth hogs doesn’t wash. Bandwidth drives content provider revenues. Those revenues, not site visitors, pay AT&T’s bills, and most Internet services contracts include rate-related price schedules.

    It’s getting to be like the days before the breakup: “We’re AT&T. We don’t care. We don’t have to.”

  • The horrible truth is that someone has to pay for the internet. Its doesn’t reach more people or carry more bandwidth by adding water and sunlight. Content providers are the most obvious place to get this money with out imposing a universal tax on the users. I’m not an advocate of regulation but perhaps this is an area where government can step in and make sure that any bandwidth billing to the content providers is done in a way that’s fair and not restrictive to the growth of any industry still in its infancy. Afterall the network will be owned by the telecoms so the greater burden of those costs “should” fall on them but having to continually upgrade to meet the needs of content providers who don’t pay anything isn’t right either.

    Also to the writer speaking of the many unrelated platforms. I agree. But those who understand why the billing is as insane as it is (government regulation) understand why the big companies just try to make what they have work. Its a nightmare all around.

  • Red Rat

    Why is everyone moaning about this attitude. This is exactly what a free market place and capitalism is all about. If I have something you want, you have to pay me for it. If you really want it badly enough, I can charge you an arm and leg for it. Sadly, I recognize that I am going to pay more for my broadband internet access, but there is nothing in the “rules” that says you have to be allowed to view some recent movie for unlimited access at about $40-50 per month. Why should the guy watching a movie via the internet pay the same amount as the someone who just wants to read email or surf (relatively low demand applications)? While we might like to believe that the internet is some form of inalienable right granted in the Constitution, it is not! It is a service that we have to pay for, as such the holder of the choke point calls the shots in a de-regulated market–and we all wanted that, isn’t that right??? (At least that is what Ronny Raygun said).

  • Tommy Ward

    The BellCo’s stink. I doubt that they are having to spend much money to add bandwidth today…they overspent on infrastructure almost to the point of bankruptcy during the dot-com boom. They charge end user subscribers enough already. The content providers pay huge amounts for Internet access, and for peering at their data centers. To connect to the AT&T, MCI, Sprint or other network backbones, they pay monthly fees as well as metered rates.

    What the telcos are trying to do is gouge whoever they can. They are probably losing voice subscribers, because of cellular and VoIP, so they are going after whoever is making money. If there is any government intervention to take place, it should be an investigation against the Bells for restraint of trade, and at the same time the content providers should file class action suits to stop this attempt.

  • Stan Noteboom

    Well, I get a little tired about hearing about Capitalism as if it’s some pure, self-correcting system delivering goods and services at some efficient rate. Let’s all remeber that AT&T didn’t develop the internet, the tax payers of this country did. The telecoms have gotten to reap a lot of the benefits for a system that they wanted no part of until it was developed and matured to a critical mass by others, and then they wanted to be the chief honchos of it. Additionally, I cringe when people talk about free markets. There are no such things. I live in California. Need I remind you all what happened when the electric utilities came into Sacramento and put on their Showboat about the glories of the free market and de-regulation? Well, when they weren’t regulated and the market was “Free” they did what most “Capitalists” do, let their greed run free and then conspire with their fellow “Capitalist” and “Free” marketers to rig the market and hose money out of the pockets of the public, saying all the while, “Well, were just play by the rules of the market.” Time to get real and realize that we have to hold these large monopolies/oligarchies on a short leash.

  • Statements by AT&T Chairman and CEO Ed Whitacre are ridiculous!

    He admits consumers AND providers pay for access to the internet through fees, like the public pays for automobile freeways through taxes, but then he wants us to pay for a green light at every signal we pass???

  • Statements by AT&T Chairman and CEO Ed Whitacre are ridiculous!

    He admits consumers AND providers pay for access to the internet through fees, like the public pays for automobile freeways through taxes, but then he wants us to pay for a green light at every signal we pass???

  • Markle

    I’m sorry but we broadband users paid for all that dark fiber long ago that sits unused. We paid for it yet we have no ownership.

    The myth that is propagated is that the less effective players have been driven out or absorbed into a more efficient structure. Yet, I have worse service now than I did in 1999. I suspect bandwidth shaping is already with us. Bandwidth test sites show 5M/384, but any real-world use shows more like 1.5M. Oh, and in 1999 I didn’t see an upstream cap. My modem in the past year has taken to blinking stupidly for 5-30 minutes at a time. My only option is to go down-market to DSL. We are told that this is the best they can do for the money yet looking overseas it is plain to see that is not the case. We now are headed in a race for the bottom. We pay more now with more than 50% broadband penetration than when it was a luxury and we get worse service as well.

    The reason we are told is that our large distances make widespread broadband expensive compared to the close-coupled countries in Asia and Europe, yet you can’t get broadband in rural areas in the US anyways… So where does the comparison come from?

    It’s the unfair ‘socialistic’ subsidy that created their network, we’re told. When the true cost is factored in…blah, blah. Well, they do have better, cheaper service. If it were privatized would that infrastucture disappear? Uh, why? Would that argue against rather than for deregulation of a de facto utility?

    The market economy tells us that if we think we can do it better, go out and do it. Yet when a municipality that can’t get the attention of a big player decides to do that the biggie tries to cut them off. Can’t have ‘big government’ competing with a simple businessman’s desire to make a profit, you see. The irony is when the Bell in question is a couple of orders of magnitude larger than the entire economy of the community in question. The balance needed in a healthy market is way off kilter. What this situation reminds me of is feudal Europe where a noble would build a fortress in a strategic mountain pass so he could enrich himself by charging tolls. Or perhaps the definition of internet troll needs to be recast back to it’s original analogue, a bully thief hiding under a bridge waiting to harass and threaten everyone who needs to come their way.

  • Gabe

    Maybe it’s me, but he sounds shrill and desperate. Last time I checked QoS and SLA’s aren’t free.

  • Bryan Wright

    Don’t the CONTENT providers already pay for having their content “Prioritized”? The content providers pay for internet access just like the end users who download their content. The content can chooses to purchase a t-1 or a t-3 and whether to purchase from a small company or purchase a t-3 connected directly to a tier 1 backbone provider. Ultimately just as an end-user is paying for his connection between himself and his ISP, so is the content provider. So this is really an issue between the content providers ISP and the end users ISP and their decision whether to pass along any costs to their respective clients. As an end user when I purchase a DSL connection from SBC/AT&T I fully expect that I am paying for access to the internet. Not access to only the portion of the internet that has paid SBC/AT&T for deliverign their content. If they want to use their “Choke point” for something, maybe they should “Choke” the flood of SPAM ROBOTS and Viruses that are flooding the internet with traffic FROM their networks.

  • Lisa Beimler

    Yes, we have already paid for the fiber that the telcos have promised to put in, but never did – to the tune of $200 billion dollars – and they are still whining about infrastructure costs? Ridiculous. I am not willing to pay them any more so that they can buy out more wireless and cable companies and tell Internet content providers what to do, when they have already broken promises. And now they are asking for deregulation.

  • Adrian Blakey

    Why is price equated to bandwidth? Once the captial cost of fiber and routers are covered it costs the same to move 100Mbits/sec as 56k. If we have already paid for the infrastructure in tax rebates, the phone companies do not have an argument.