Owning the pipes
As we have often pointed out, the businesses of the phone companies and the cable companies are merging, and the key players (Verizon, SBC, Comcast, Time-Warner) are scrambling to gain traction and buy out smaller players. Inevitably, connection to TV, telephone, internet, and possibly digital radio will be through one of these players for most US citizens.
These big companies are plotting the next step: to squeeze everyone else using their control of the Internet, according to an excellent article by Doc Searls in the Linux Journal ("Saving the Net: How to Keep the Carriers from Flushing the Net Down the Tubes", 11/15/05). .
Searls's big concern is, as the title suggests, a transformation of the open exchange of ideas and products that has blossomed on the Web over the past decade, all under threat as the oligopolies aggressively seek to tame it.
The fundamental problem, as Searls sees it, is that the communications companies are uniformly hostile to the Internet as it is now is:
The thing is, they're hostile to it, because they don't get it. Worse, they only get it in one very literal way. See, to the carriers and their regulators, the Net isn't a world, a frontier, a marketplace or a commons. To them, the Net is a collection of pipes. Their goal is to beat the other pipe-owners. To do that, they want to sell access and charge for traffic.
The companies don't see themselves as utilities , like water or electric, he notes. "They see themselves as a source of many additional value-adds, inside the pipes. They see opportunities to sell solutions to industries that rely on the Net--especially their natural partner, the content industry." And they hate freeloaders.
The freeloaders include Amazon, eBay, Google, blogs and any other content that simply rides the rails. That's not to say that that companies like Amazon and Google are nonprofit, but that basically they use the Web for just the price of a hookup, with no added cost at either end, no matter what the range or nature of services.
But the pipeline owners have other plans. The article quotes a BusinessWeek interview with SBC CEO Edward Whiteacre, who stated:
Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?
Basically, the pipes companies would dearly love to ask for high rents for use of what has been a public commons. And they'd like to charge both consumers and generators of content. For example, imagine paying your cable company a surcharge every time you reserve a hotel room or sell a baseball card on the Web.
Among the "value-added services" they are proposing are severe controls on content exchange, so that content generating companies can buy protection from piracy and any hint at copyright infringement. That will include not just sending pirated MP3 or video files around the Web, but even forwarding an article to a friend. The ultimate goal is pay-for-play for content, the dream of every major content oligopoly.
What's scariest is the likelihood that the US government is likely, under lobby pressure, to let all this happen. The pipeline owners are drafting legislation for that very purpose, and they have very skillful lobbying capabilities. Searls outlines a plan for resisting this commercial grab for the Internet. One tactic may be municipal Wi-Fi, which can outfox the local monopoly of the phone and cable companies. No wonder they are so hostile to that idea.
I strongly recommend the article, which has a clear sense of the way in which oligopolies want to change the Internet as a part of their plans for extended profitable growth. The future of the Internet is being decided now, and lobbyists for oligopo0lies are leading the charge.
