Month: June 2006

FYI, here’s the article that but a bee in the bonnet of the special interests who’re trying to shackle the Internet with their so-called net-neutrality regulations:

William L. Smith, chief technology officer for Atlanta-based BellSouth Corp., told reporters and analysts that an Internet service provider such as his firm should be able, for example, to charge Yahoo Inc. for the opportunity to have its search site load faster than that of Google Inc.

Or, Smith said, his company should be allowed to charge a rival voice-over-Internet firm so that its service can operate with the same quality as BellSouth’s offering.

Network operators can identify the digital “packets” of content moving through their wires from sites and services and can block some or put others at the head of the stream.

But Smith was quick to say that Internet service providers should not be able to block or discriminate against Web content or services by degrading their performance.

The complaint from regulation-happy special interests is that the telcos want to make the Internet like cable TV, to which I will simply say that the Internet has already internalized that model, and quite successfully. The dominant web services companies make their money the same way TV does, from a combination of ads, subscriptions, and pay-per-view. Google sells ads just like ABC does, iTunes is pay-per-view, and the New York Times sells subscriptions to Tom Friedman and Maureen Dowd. So where does all this high-and-mighty “we’re so much better than TV” crap come from, some delusion that Internet access is a gift from the Easter Bunny?

There’s a real public benefit to an accelerated service offering inasmuch as its a cheap way to level the playing field between rich incumbents like Google with fat pipes and server farms all over the net and startups with lean budgets. If people like Gigi Sohn were really the friend of the entrepreneur — and had even a basic knowledge of how the Internet actually worked and not just a sentimental fantasy about a democratic net — they would applaud Bell South’s ideas.

Adam Thierer has a first person account of the Verizon’s new network, the one the hippies are screaming about:

Folks, this is serious broadband competition. For those critics who say that the rivalry between two competitors will not be intense, I say come visit my neighborhood. You’ll see Verizon showering people with free gifts (flowers for women, baseballs for kids, and even free gas at local gas stations!) to try to build name recognition and win new subscribers. And you’ll see Cox responding with flyers and e-mails about new services that are coming in an effort head-off this threat. And then you’ll see Verizon flyers and ads responding to those Cox flyers and ads. And you’ll see both of them cutting prices left and right to get customers or win them back.

(Meanwhile, wireless lurks as an alternative that could decimate both cable and telco wireline providers if they can just get the broadband part of the puzzle solved. Rupert and the boys over at DirecTV are in the process of rolling out an ambitious HDTV plan. Can more robust, reliable satellite broadband services be far behind? If DirecTV ever merges with EchoStar and combines all that satellite capacity, look out. That’s when things will get really exciting.)

The real question now is not whether broadband competition works, it is whether or not it is sustainable among more than two players per region. I am one of just 3 or 4 people in my neighborhood who have signed up for FIOS so far. Verizon is going to need to get A LOT more subscribers AND SOON. If they get caught up in a price war with cable in the short term they could be in serious trouble because the fixed deployment and installation costs associated with FIOS are killing them. They need customers and they need them now. At a minimum, Congress needs to enact local franchising relief and make sure that burdensome state or local regulation does not stand in the way of Verizon and other telcos rolling out these exciting new services. The market challenge they face is stiff enough that they don’t need such artificial regulatory impediments to success standing in their way.

It sounds like Verizon doesn’t have their act together on customer service, with all those union workers, but the service is something I’d buy if I had the chance. Unfortunately, fascist forces want to deprive me of the opportunity.