In a “recent interview, Business Week asked SBC CEO Edward Whitacre”:http://www.businessweek.com/@@n34h*IUQu7KtOwgA/magazine/content/05_45/b3958092.htm whether he was concerned about “internet upstarts like Google, MSN, Vonage, and others?” Whitacre’s answer is rather odious:
How do you think they’re going to get to customers? Through a broadband pipe. Cable companies have them. We have them. 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?
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!
So, first off, SBC isn’t doing anyone any favors as it is now. Their customers are paying them $30-50/month for DSL service. Second, the only reason SBC and the other decendents of the RBOCs can collect that money at all for internet access is that everone, from Yahoo, Google, MSN, on down to little guys like me, are providing content and services over the net that people in SBC’s territory want. Hell, if it weren’t for that, more and more people in their territory wouldn’t be SBC customers at all. They’d let their land-lines go and use their mobile phones. If this were about fairness, SBC would be kicking me some revenue every time one of their customers read this blog.
Of course, this isn’t about fairness, its about power. SBC holds more power than all the little guys like me. They don’t necessarily hold more power than companies like Google or MSN, or Yahoo. At the very least, said companies have the resources to fight it out with SBC.
This is why Google is investing in rolling out WiFi networks, because it gives them a way to reach customers independant of SBC and their ilk. They don’t actually have to acheive SBCs level of covereage or service either. They just have to create a viable alternative for enough people that they deprive SBC of their pricing power.
This is why we need more alternatives for highspeed internet access than just the phone company and the cable company. It’s why we need WiMax, and broadband over powerlines, and community mesh wifi networks. It’s why the FCC needs to foster a competitive arena with more than two competitors.
SBC and their ilk have to be decisively routed. Anything less will strangle innovation on the Internet. Anything less, and the big guys will all work out their deal with eachother and the little guys, the people with the passion and the great ideas will be locked out.
Other points of view:
Second, if somebody is going to pay somebody in this situation, it’s not clear who should be doing the paying. There is some set of customers who want to use SBC broadband service to access Google. Why should Google pay SBC for this? Why shouldn’t SBC pay Google instead?
“Mike on TechDirt”:http://techdirt.com/articles/20051031/0354228_F.shtml
the only reason this is possible now is because there’s less competition in the broadband space, not more. If there were real competition, SBC would never even dare to suggest that they might cut off a Google, Yahoo or Vonage