Oligopoly and network neutrality
Both phone and cable companies in the US, despite heavy competition to sign up customers for broadband Internet service, are agreed on one thing -- their control of broadband access is an opportunity for major revenue enhancement. We've written before about how companies like Bell South and Verizon, Comcast and Time-Warner, are all eager to erect toll booth on the data highway, in order toget their slice of the tech-media pie.
Rather than being "network neutral," the ideal of the founders of the Internet and the reality until now, the carriers want to get more involved in who gets to use their capacity and who does not. To that end, they are moving rapidly to influence political and regulatory powers and to demand fees of major content providers for fees for "priority delivery" of their content. And they can afford some pretty "persuasive" lobbyists (even if Jack Abramoff is no longer available).
In a good article on Slate magazine online ("Should Google have to pay for the bandwidth it consumes?", 1/17/06), journalist Adam Penenberg explored some of the issues involved. As he puts it:
Verizon, Comcast, and their ilk have been lobbying Congress to transform the Internet into a two-tiered system. By tagging content, broadband providers would ensure that their own packets (or those from companies paying them protection money) get preferential treatment and reach subscribers faster than second-tier content. This would give companies like Verizon a tremendous advantage as they roll out their own television and VOIP telephone services.
Their argument, as he outlines it, is that the Internet is being used more and more not for carrying e-mail or for viewing simple pages, but for services like VOIP, interactive games, watching videos, and playing music. Those new services take a lot of bandwidth, and, the broadband companies argue, force them to invest more in infrastructure, not covered by user fees. They want to get that investment back from the content providers.
Above all, the article says, the rivals are agreed that they want Congress to change the telecommunications laws. "They want to strike the network neutrality clause. Google, Yahoo!, Microsoft, and eBay want to keep it. If telco-cable wins, it will be able to set up separate tiers, forcing Google to pay up or ride in the slow lane."
The article points out that the broadband providers are already charging consumers in their monthly bills, so they want to add another layer of charges to content providers. And this will lead to further oligopolization. It will favor the phone and video services of the Comcasts and AT&T's of the world. It will also favor the biggest content providers (Google, Yahoo, Disney, News Corp., and so on), since they are able to negotiate as equals with the broadband providers and can afford to regain the fees easily. What it does is shut out smaller companies and start-ups. It's yet another case where the laws might be rigged to favor the already big and profitable, and to keep out pesky innovators. Minority tastes will get second-class service, and most of us will get steerage class treatment on the Web.
There's also the danger that the broadband oligopoly will get much more involved in monitoring what exactly gets through their systems. They already do this in a beneficial sense, insofar as they intercept spam (a little) and protect against denial-of-service attacks. As Google's privacy lawsuit and the recent actions of the NSA indicate, there's a lot of pressure to use Internet access as a means of intercepting and peeking at private communications. That will only be enhanced when broadband providers become gatekeepers. Look what is happening in China where all Internet communication is monitored.
There are ways in which this broadband oligopoly may yet be defeated. Google, as the article states, has been buying up unused fiber-optic cable and may be planning to "blanket major cities with Wi-Fi." Cities like Philadelphia are installing their own publicly owned municipal Wi-Fi systems, (much to the dismay of the telcos and cable companies). And there is power-line broadband, a technology that would at least add more competition to the industry (if it actually works on a large scale).
But the article comes up with an excellent solution to the problem. "What about having subscribers pay for the bandwidth they consume? Just like you buy variable rate cell-phone plans and pay for electricity based on how much you use, your broadband bills should be calculated the same way." Metering broadband use per user is an easy thing.
If you use the Web mostly for e-mail and simple site visits, no extra charge. If you watch the complete Star Wars cycle or a baseball game while yakking on the Internet phone all day and downloading music, you pay for what you use. That would get Comcast and Bell South out of the business of deciding what content gets more attention and would allow content providers to deliver services, free or paid, on an equal footing.
