I have spent some time watching the Senate Commerce Committee hearings on whether telcos and cable companies can charge web services a fee for delivering service to their customers.
I have blogged about this issue before and I will reiterate that this is about jealousy and greed plain and simple.
Let’s take Google since they are front and center in this debate with Vin Cerf representing them before the Senate. Users love Google. Google gives them a lot of value and its free. Even the ads are relevant. One of the reasons people pay Verizon, Bell South, and AT&T a monthly fee is so they can use Google.
Google is a value added service that runs on the carrier’s networks. It ADDS VALUE to their networks. Without it, the carriers would have a LESS VALUABLE service. And yet they want Google to pay them for improving their service. This is nuts.
Let’s talk about bit torrent. It sucks up a bunch of bandwidth on the carriers networks. But it sucks up less than video streaming. It’s a more efficient service than what came before it. The carriers should be happy that Bit Torrent showed up. It makes consuming video more popular. It’s going to drive demand for more bandwidth, which at the end of the day is what the carriers sell.
Let’s talk about Skype. It’s a fantastic service. It is more efficient than VOIP services that don’t run on P2P networks. And it is ten times easier and better to use than the crappy plain old telephone service (POTS) that still generates most of the revenues for these carriers. Skype tells me if the person I want to talk to is available BEFORE I make the call. And it lets me IM with the person if they are on another call. Why didn’t the carriers invent this service? Because they were getting fat and happy by charging exorbitant fees for bad services.
If the government lets the carriers get away with this greedy move, I will discontinue Internet service from any carrier who seeks to get paid by the value added services. And I will encourage everyone else I know to do the same.
Surely there is some new carrier eager for AT&T’s customers who will align themselves with these value added services. I’d rather buy my Internet access from a company who understands how valuable Google, Bit Torrent, and Skype is to me and how much of a commodity their Internet access is.
Frankly I don’t really care what the government concludes on this issue. Because I am confident that the market will speak. The web services companies aren’t going to stand for a tax without putting up a big fight. And they have way more customer loyalty than the carriers. Who has a better brand – Google or AT&T? Skype or Verizon?
What the carriers need to do is develop better and more reliable services. EVDO is a good example of something they’ve done right. Give us more bandwidth in more places with more price/value options. Why don’t we have a 12mb down/3mb up Internet service in NYC? Apparently they have it in France. Why doesn’t Verizon spend money on developing that service? I’d glady pay more for a true high bandwidth service. That’s how the carriers should be looking at things. But instead they are trying to take money from the wrong side of the table. And it’s not going to work.