The WSJ covers the issue in a front page piece today titled “Phone Companies Set Off A Battle Over Internet Fees”. Gist:
Large phone companies, setting the stage for a big battle ahead, hope to start charging Google Inc., Vonage Holdings Corp. and other Internet content providers for high-quality delivery of music, movies and the like over their telecommunications networks.
The phone companies envision a system whereby Internet companies would agree to pay a fee for their content to receive priority treatment as it moves across increasingly crowded networks. Those that don’t pay the fee would find their transactions with Internet users — for games, movies and software downloads, for example — moving across networks at the normal but comparatively slower pace. Consumers could benefit through faster access to content from companies that agree to pay the fees.
This quote from Jeffrey Citron of Vonage also caught my eye:
They want to charge us for the bandwidth the customer has already paid for,” said Jeffrey Citron, chief executive of Vonage. Customers who already pay a premium for high-speed Internet access, he said, will end up paying even more if online services pass the new access charges to consumers. “The customer has to pay twice. That’s crazy.
One needs to be careful about language here. The idea that traffic not receiving priority treatment will move across the network at “the normal … pace” is a pleasant little fiction, but ultimately a dangerous way to frame the issue. Traffic that receives premium payment will be faster, traffic that does not will be slower. Investment in the network will be skewed to the traffic that generates the higher revenue. And being slower, the traffic that doesn’t will then seem anything but normal.
Om writes about the article today in a post titled “Slow Lingering Death of Net Neutrality?”, and links to a podcast that covers the issue. One of Om’s observations about the WSJ piece particularly caught my attention:
Even if you buy into the argument, as a consumer, what I would like to see is that if incumbents charge for the network access, then they pass on those savings to consumers. After all we are paying for the network – about $40 a month. But back to the WSJ story, in which I found this gem of a quote that sums up the antagonistic approach.
“During the hurricanes, Google didnâ€™t pay to have the DSL restored,â€ said BellSouth spokesman Jeff Battcher. â€œWeâ€™re paying all that money.â€
I donâ€™t know if you charge people about $75 a month, or about $825 a year for DSL and phone service, it is your job to fix the line. Did Google come and take my money as monthly service fee? Even HMOs donâ€™t make statements like these!
Update (2006-01-07) – Mathew Ingram covers this and brings to it his usual clarity:
What are the big telecom companies smoking? They charge people $40 a month or so for high-speed Internet service, then put caps and download limits on them, or use â€œtraffic shapingâ€ to give some services priority over others â€” or even prevent some online applications from working at all â€” and then argue that Google and other companies should pay extra. Russ Shaw calls it a â€œshakedown.â€