Tuesday, February 07, 2006

Hearing on Net Fees

Commerce Committe is holding a hearing today on whether broadband providers can charge content providers...
John Thorne, a Verizon senior vice president and deputy general counsel, was quoted saying "The network builders are spending a fortune constructing and maintaining the networks that Google intends to ride on with nothing but cheap servers. It is enjoying a free lunch that should, by any rational account, be the lunch of the facilities providers."

See story


Blogger duffee said...

I have a hard time sympathizing with the Internet providers in this situation. They benefit from having an Internet that people actually want to use and are able to charge people directly for that access. Without content people actually wanted (and search engines that make the content accessible) no one would pay Verizon et al. for Internet access.

The situation is similar to network affiliation agreements in broadcast (over-the-air) television. The individual stations that invest to build transmitters, etc. agree to a network contract providing the network with "free" access to their airwaves. In return, the stations get television content that people (presumably) want to watch. Thus, both the network and the station are able to reach more people and increase advertising revenue. Networks used to pay stations that carried their "air" but that's no longer the case.

8:55 AM  
Blogger ed said...

I also meant to mention that there was a blog post I read about (only a rumor) that Google was in the process of creating their own private (and fast) internet, using WIFI networks to distribute it (they are apparently buying up loads of backbone access to get it to the distribution points)
The post was here

Also I agree with duffee that the backbone providers really don't have as much a claim here, without content what are they? I assume if they aren't making money running the backbone, it will collapse and prices will rise to reflect that and the system will keep working, maybe i am missing something though?

10:24 AM  
Blogger kkoehler4070 said...

I think Lessig's testimony at the hearing was interesting (here). Lessig seems to argue that maintaining the current structure of the Internet is important because "the innovation and explosive growth is directly linked to it's architectual design."

I personally think it would be unfair for broadband providers to charge because Google already pays for the bandwidth they use to access the Internet. If they are currently getting a free ride (meaning they are not paying enough for their bandwidth), the market should correct itself.

6:14 AM  
Blogger Christine said...

I agree that Internet providers would not even be able to make a profit without content providers. But, As far as google paying for its broadband access - I'm wondering how this works? Do they pay one monthly fee like others - or do the pay a rate tied to usage to compensate for the large amounts of volume that they use? also - I think it would be interesting to compare this to other industries - for example does anyone know how this works between cellular service providers and those that own the airspace?

1:53 PM  

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