January 23, 2006

For Whom The Net Tolls



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Via Josh Marshall, a story about how the Telecoms are trying to find new ways to put new toll booths on the information superhighway. In short, they want to artificially slow or speed up the connections of retailers according to how much they are willing to pay. If, for example, Google outbids Yahoo, then Yahoo will slow to a crawl on your computer while Google speeds away.

This is, of course, nothing less than a will to gouge:

AT&T Chairman Edward E. Whitacre Jr. complained that Internet content providers were getting a free ride: "They don't have any fiber out there. They don't have any wires. . . . They use my lines for free -- and that's bull," he said. "For a Google or a Yahoo or a Vonage or anybody to expect to use these pipes for free is nuts!''
A false argument, of course: everyone already pays for the pipes. You think Google pays no money to connect to the Internet? Do you get a free connection? Of course not. We all pay, and the big corporations which do their business online pay a premium for fast connections and massive bandwidth. This is nothing less than the Telecoms realizing that they have a potential stranglehold on the livelihood of super-rich businesses--if the laws are changed so as to allow them to artificially punish any user that does not cough up exorbitant wads of cash for the privilege. It's kind of like power companies figuring that they could charge businesses a lot more for electricity than regular consumers: it has nothing to do with the actual cost of providing the service, rather it has to do with the service provider seeing customers with loads of money are figuring they can extort a lot of that cash their way by threatening to cut off an essential service.

The telecoms claim that they're just charging for what they provide, but their statements belie this easy falsehood, like when a BellSouth executive said they wanted to charge Apple 10 cents for every iTunes Music Store download. That's not charging for bandwidth, that's asking for a cut of all business profits. A high-definition movie trailer now provided free by Apple can take up twenty to thirty times more bandwidth than a song; will they charge Apple two or three dollars for each of these? Obviously not--so it's not about bandwidth, it's more of a 'protection racket,' like neighborhood thugs demanding shops to cough up a percentage--such a nice business you have here, it'd be a shame if something happened to it.

In the end, if this is allowed, the consumer will naturally be the one to foot the bill in the form of higher prices and lesser services, even due to less competition. And you have to remember that we presently have a Congress that cares nothing of your needs when rich lobbyists bring bags of bribes contributions to their doors, as we witnessed when Congress passed laws that screwed the public royally but granted multi-billion dollar boons to the pharmaceutical and credit card industries at our expense. So just because this works against the interests of consumers does not mean Congress won't consider it. After all, the Republican majority has it's own protection racket, and the telecom lobbyists are far better entrenched in D.C. than the dotcoms are. But at least the dotcoms are businesses that can cough up cash in the end, so there's a fighting chance that they'll be able to fight it.

Posted by Luis at January 23, 2006 11:13 AM
Comments

I finished Grisham's The Brethren the other day, and have on order from amazon his The Broker. I find his stories peppy.

Posted by: ykw at January 24, 2006 04:02 AM