Weblogsky: The broadband dance

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The broadband dance

Failing incumbent telcos have a new model in mind to boost their profits: charge certain kinds of broadband services providers more for moving their content across the telco's network. [Link article at MarketWatch] Mark Cuban agrees, saying that multiple tiers of service are necessary to ensure quality of service, sorta like toll roads and HOV lanes. Randall Stross had a different opinion, in the New York Times. That's the piece you should read and think about. Stross notes that both Bell South and Verizon are pushing the concept of a broadband fast lane, and he explains why it's a bogus request.

Woe to us all if the Internet's content is limited by the companies who also handle the plumbing. "The Future of Ideas," by Lawrence Lessig (Random House, 2001), shows how innovation and creativity associated with the Internet are the byproducts of its openness, its role as a commons that is accessible, by design, to all. Professor Lessig, who teaches law at Stanford, said last week that even now, broadband carriers have failed to demonstrate their commitment to the principle of network neutrality. "They've fought it at each stage," he said, "and they have never embraced the principle."

An illustration of his point popped up the same day. In an interview, William L. Smith, the chief technology officer at BellSouth, described to me his company's trial offering in West Palm Beach, Fla., last year of a speedy download service for Movielink content. When asked whether BellSouth would offer its special service on an exclusive basis to a particular content site and agree to exclude the sponsor's rivals, he did not hesitate in treating the question as a matter of simply settling on the right price. The N.F.L. and Nascar strike exclusive distribution deals, he said. Why not network carriers?

The largest Internet companies are the ones that could easily afford whatever terms the carriers demand for exclusive deals that would lock out smaller rivals and new entrants. But they have not done special deals with the carriers and instead have joined together to try to persuade Congress to protect the principle of network neutrality and prevent the Bells from striking exclusive deals with anyone. Last November, Amazon, eBay, Microsoft and Google, among others, formally registered their concern with a House committee that is revising the basic telecommunications law; they noted that a draft version of the bill failed to make network neutrality a matter of policy without exception. Whether the committee has responded positively to the suggestions from the Internet players should be known soon.

So we don't have network neutrality by accident, but by design, and attempts to balkanize levels of service threatens to stifle innovation while linking the telcos' pockets and rewarding their inefficiency (Stross notes that other countries, like Japan and Sweden, have much faster broadband service as a matter of course).

I should note that the incumbent telcos are not necessarily bad guys in all this; they're doing what they think they have to do to survive and serve their interests, as any business would do. The problem is that they've evolved from the monopoly culture of the old phone company, which included a believe that "what's best for Ma Bell is best for the country." The telcos have never got comfortable with competition in open markets - they prefer to use legislative power to create and protect profitability. They're not bad people, but their culture, if I've read it correctly, is both archaic and counterproductive.

jon posted this at 10:44 AM
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