Oops! Did I really say that out loud?
After years of denying any reason for us to be concerned about Net Neutrality, SBC (one of the telcos) CEO Ed Whitacre let the cat out of the bag in a Business Week interview last fall. The significant exchange is:
How concerned are you about Internet upstarts like Google (GOOG ), MSN, Vonage, and others?
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! (YHOO ) or Vonage or anybody to expect to use these pipes [for] free is nuts!
The misleading aspect of Whitacre’s statement regards “they” wanting to use his pipes for free. The fact is, there isn’t anyone using his, or anyone’s, pipes for free. We, as consumers on the Internet, pay for our pipes; so do “they” (the content providers) for the pipes they need in the data centers to serve up their content.
What Whitacre is really suggesting is discriminatory access. Unstated is his concern about competition for the services other than the pipe that he and the other telcos, want to provide: like voice and video. If he can justify additional charges, or more importantly control which content is allowed or preferred, he will ensure a huge competitive advantage for himself.
This is our worst fear coming true. Should this strategy succeed it will forever change the openness of the Internet. I don’t want my daughter telling her daughter about the “good old days” of the Internet.