Future of the Internet highway debated

Whether they tier their service or not, telecommunications companies need to expand capacity. To do so costs money, and the telecoms argue that Internet users will have to pay, one way or another. They say it’s preferable that the money come from those who need and are willing to pay for better service, rather than spreading the cost out over all users.

“We do have to recover the cost for building the new capacity out there that the content providers are expecting us to provide,” said Jim Cicconi, AT&T Inc.’s senior executive vice president of external and legislative affairs.

AT&T already provides connections between offices of the same company, or between government offices, using AT&T’s own lines rather than the public Internet. This allows AT&T to guarantee a certain quality level.

By prioritizing packets, AT&T could extend that service to the connection between a Web site and a surfer at home.

To the opponents, abandoning the “network neutrality” principle opens up the prospect of the carriers blocking sites that don’t pay up or that compete with the carriers’ own services — for instance, by providing phone calls.

The carriers have stoked those fears with some hard-line rhetoric. John Thorne, Verizon Communications Inc.’s senior vice president and deputy general counsel, was quoted by The Washington Post as telling a conference that Google “is enjoying a free lunch that should, by any rational account, be the lunch of the facilities providers.”

Ed Whitacre, AT&T’s chief executive, has raised eyebrows with similar statements to the effect that Google and Yahoo Inc. are freeloading on the Internet, a remarkable assertion considering both companies pay millions of dollars in Internet access fees, and their visitors pay for Internet access as well.

Brasil Telecom SA, Brazil’s third-largest phone company, said in mid-February it had installed the first system that can identify information by type — say, a voice call — and bill the company providing it, addressing what the company calls “revenue leakage.” The company would not give further details on its plans.

U.S. carriers are careful to point out that they don’t intend to block anyone’s Internet access or degrade service.

“None of the worst scenarios people have painted here can take place nor are they taking place,” Cicconi said, adding that the government would stop any such abuse, as the Federal Communications Commission did in one case where a phone company that provides Internet services blocked a competing voice-over-Internet company.

Also, competition among carriers means they won’t want to block sites for fear of losing customers, Cicconi said.

Opponents say that even if toll roads leave the rest of the Internet unimpeded, it will stifle innovation.

“The next great idea, the next Google or eBay or Napster or whatever, won’t have the capital to get themselves in the fast lanes right away,” said Ben Scott at Free Press, a nonprofit that promotes freedom of speech. “The reason the big e-companies were so successful were that they started on the same level playing field as everyone else.”

Another objection to packet prioritization is technical.

The Internet2 association assumed that prioritization was the way to go when it started building a super-fast next-generation network connecting universities.

However, engineers abandoned that notion after a few years, concluding that it’s more effective simply to expand the network’s capacity for all traffic — adding lanes to the highway instead of a parallel toll road.

The FCC has supported net neutrality in somewhat hedged terms, leading to calls in Congress for a stronger defense of the principle to be included in a future telecommunications bill.

The telephone and cable companies are arguing against any such law, pointing to the traditionally very light regulation of the Internet.

“The hands-off policy has given us the flexibility to innovate and respond to consumer demand,” said Kyle McSlarrow, chief executive of the National Cable & Telecommunications Association.

For the carriers, part of the attraction of a tiered Internet is probably that they would get away from being a “dumb pipe.” They’re the messengers, with the unglamorous job of passing along the data that others produce and consume. With tiered service, the carrier would become more important, and perhaps have more pricing power.

“It’s very rational behavior in the industry. I would do the same thing if I was paid by my shareholders,” Free Press’ Scott said. “But rational market behavior doesn’t necessarily mean good public service.”

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