When telcos run the Internet

My new phone has given me a first-hand experience with how telephone companies would like to see the Internet work. It’s a chilling vision, and one that publishers, regardless of size, should be fighting.

Right now, telcos are working behind the scenes to control your access to the Internet. They have already turned wired broadband into a duopoly. They have already turned as-yet-undeployed fiber broadband into a monopoly.

As the telcos tighten their grip on the Internet, you can expect to see Internet access look more like the mobile network.

Complicated and confusing pricing: Right now, you can get unlimited Internet access at a specified speed for a flat monthly rate from the telcos and cable companies. That’s because they’re still competing with dial-up, which is a wide-open free market with plenty of real competition. Even so, duopoly pricing has suppressed broadband adoption in the US. If the telcos ran the Internet and could structure access pricing, you could expect to have “plans” that would offer multiple tiers of service, allowing you to “choose the plan the met your needs”. The result, because your needs are less predictable than you think, is that virtually everyone would pay more for the same amount of service. The unpredictability of our monthly bills would suppress usage almost instantly. This would be a hidden tax on the free Internet.

Discrimination among traffic. Despite the fact that it’s all bits, AT&T bills separately for voice and “data”. There are two separate plans and the prices are wildly different. AT&T’s cheapest data plan is 8 MB for $19.95/mo + $.006/kb after that. Their most expensive is $.03/kb with no plan at all. I’m not sure how fast AT&T’s network is, but let’s assume its 14.4 kb/s. At maximum throughput, this works out to be about 10 minutes of data use (8,000 kb / 14.4 kb/sec / 60 sec/min = 9.26 min) for $19.95/mo. It gets worse if their network is faster. AT&T wouldn’t get very far selling voice plans that provided 10 minutes a month for $20. Why are they charging more for “data”? Because they can.

Charging for messaging: In addition to the hourly charge for voice, and per-bit charge for data, there a per-message charge for text messaging. Imagine having to pay for each email or instant message you send.

Walled gardens and discrimination among destinations: The cellco’s invented the term “walled garden” to describe a subset of the Internet that they control, which their subscribers would be forced into, and which content and commerce companies would be forced to pay for access. You could expect it to be more difficult (or impossible, depending on your provider and your plan) to get to content providers who are not paying to reach you. This hidden tax on Internet access would result in more fees for content, more advertising, and higher prices from Internet merchants.

Dedicated hardware: Why can’t you buy any cell phone and hook it up to your cellco’s network? Why do you have to pay a fee to add an approved phone that you bought from another user? The cellco’s are selling access to you to the handset providers. There is no free market for mobile hardware. The other result of this is that there is no free standard for data access on cell phones. Imagine an access provider that didn’t support anything other than the latest version of Windows, which included lots of goodies like digital rights management, copy prevention, telco control of which applications and protocols you can run, and advertising.

Limited protocols: Why can’t you use MP3 rin, display HTML pages, access POP and IMAP email, or use AOL instant messaging on your cell phone? Why are the access companies already limiting access to email servers or bouncing mail from people who operate their own email servers?

This is the direction in which the Internet is moving. This is the vision of the telcos and the current management of the FCC. Its bad for users, small hardware and software companies, publishers, merchants, and anyone who uses the network to work, communicate, or gather information.

And the irony is that it’s probably not that much more profitable in the long run for the telcos than providing us with open, unlimited access to bits via whatever devices and protocols we choose.

Leave a Reply

Your email address will not be published.