What’s Included?

This dual Internet business has been floated by the telcos for long enough. So I figured I’d point out something relatively basic about it.

Let’s say I rent an apartment (I don’t, but let’s say that I do). Let’s say that my landlord is a guy named Bob Verizon, just to be funny. So I rent my apartment at $XX/month, and I move on in. And while living there, let’s say every so often I order delivery food. Domino’s one day, Chinese the next. And my landlord, Bob Verizon, is observing this from his house across the street. So Bob begins to get outraged, declares “But wait!! That’s my building!!” and proceeds to chase all the delivery boys away from my apartment. Let’s say he goes further, and and says to the merchants he’s chasing away, “You can deliver here, but you’re giving me a cut, or else!!!”

Who would rent from Mr. Verizon?

Think I’m kidding? Observe:

Verizon Communications Inc. Chief Executive Ivan Seidenberg yesterday said he might favor reaching deals with companies to do the same. “We have to make sure they don’t sit on our network and chew up our capacity,” Mr. Seidenberg told reporters.


Look, I don’t have a problem with two parties selling whatever services they agree to over a wire. But I have a HUGE problem with selling one bill of goods, and then mucking with what was sold after the fact. Buying Internet service is like renting an apartment. So long as the tenant isn’t doing anything illegal or destructive to the property he’s renting, the landlord doesn’t get a say in what goes on, least of all, who visits. And while the landlord may wish to sell a different type of service, one in which he monitors all the goings on inside, he can’t sell it as an “apartment”, but rather, must call it what it is, a “supervised dormitory”. Likewise, giving preference to some packets while suppressing others may make for an interesting dedicated service, but it’s not “Internet” service.

The guy from Vonage gets it exactly right:

“They want to charge us for the bandwidth the customer has already paid for,” said Jeffrey Citron, chief executive of Vonage. Customers who already pay a premium for high-speed Internet access, he said, will end up paying even more if online services pass the new access charges to consumers. “The customer has to pay twice. That’s crazy.”

It is crazy, which is why i don’t think customers will put up with it. But expect the baby bells to keep trying to do what they’re best at: rent seeking. They may not be able to pass it off on the free market, so i bet they’ll go to congress next.

Read more here.


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