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Monday, January 23, 2006

The Erupting War Over The Usage Of The Internet

The telecom landscape is getting recast and the battle is becoming one of finding sustainable ways and means of extracting value from the digital content. As we wrote the takeovers of AT&T and MCI officially usher in the long-heralded Internet era.The old phone companies are artifacts, and the new telecoms will look more like their counterparts in cable and computers. Consumers and business will increasingly have their pick of new services from a bunch of providers that are fighting hard to win their business.But as that era fades,another is dawning.The telco’s if they have their way may decide whether msn or yahoo could load faster in an user’ system. The telco’s proposals have the potential, within just a few years, to alter the flow of commerce and information - and one’s personal experience - on the Internet. For the first time, the companies that own the equipment that delivers the Internet could, for a price, give one company priority on their networks over another. The telco’s do not think that the fees imposed by carriers alter the basic nature of the Internet. No broadband provider has proposed to block certain Web sites. But they have said Yahoo, for instance, could pay a fee to have its search site load faster than Google. Other possibilities include restricting bandwidth-hogging file-swapping applications, or delivering their own video content faster than a similar service provided by rivals. SBC CEO Ed Whitecare says that the internet sites & VoIP payers would like to 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. The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! () or Vonage or anybody to expect to use these pipes [for] free is nuts! Recently an executive with BellSouth was quoted saying that the company would consider charging Apple five or 10 cents extra each time a customer downloaded a song using iTunes. Google and others say that the prospect of telephone companies imposing new fees on innovative and successful ventures is exactly the kind of thing that deters online commerce. Cable companies abhor the idea of enforced network neutrality just as much as the telephone companies. This represents a break with the commercial meritocracy that has ruled the Internet until now. Network neutrality is increasingly becoming the buzzword that some are trying hard to have it indoctrined into law and regulation. Google and Yahoo have joined their lobbying efforts. And online retailers, Internet travel services, news media and hundreds of other companies that do business on the Web also have a lot at stake. Giving priority to a company that pays more, they say, is just offering another tier of service - like an airline offering business as well as economy class. Network neutrality, they say, is a solution in search of a problem.

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