Commentary: Telcos Playing with Fire

By Ed Hurst | Feb 10, 2006 at 4:23:30

The telcos have been making threatening noises about Net traffic passing through their lines. Despite rumors to the contary, Google says they aren't negotiating with the telcos. This has been rumbling around the Net for a couple of months. Recently Verizon announced their intent to prevent the proposed "network neutrality" which currently prevails. So far, it's been voluntary, but Congress appears set to consider codifying it in legislation. Verizon and friends are fighting to charge for Net access at both ends. A quick reading is all it takes to realize this is no more than Google envy. As one wag said somewhere, if it were really about bandwidth, they'd be going after iTunes, streaming video and other serious bandwidth hogs. Instead, they are going after a service which sends little more than text and a few tiny images, but happens to make millions doing it. This is transparently petty envy. Perhaps the telcos need to revisit their economics classes.

In order for a vendor to sell something, he must have a means of excluding those who have not paid. For discrete objects, this is relatively easy. It's pretty easy to restrict a sandwich to the one customer which pays for it. The nature of some products make that more difficult. Water flowing through a pipe requires some sort of metering to charge per unit. For roads you must have controlled access and a means of assessing a toll. If there are alternate roads of reasonable quality connecting the same two points, you must offer some compelling enhancement or you will have no users.

Even with all these possibilities, there are other factors one cannot ignore, often tied to cultures and religions. For example, raising cattle in the lands where certain African tribesmen live requires an extensive guard force. That's because these tribes believe all cows belong to them, a gift from their god. Taking your cows is not stealing, so only the risk of getting killed will keep them from taking the cows. Nothing you say or do will convince them it's wrong. Indeed, they would say you were evil for depriving them of their god's blessings.

The telcos are playing a dangerous game with threats of charging for tiered access to their customers. If they attempt to block Google, holding their customers hostage until Google pays for access across their hardware, they will lose their customers. There are too many alternate routes, and there is no significant enhancement they offer to justify such a thing. That such alternate routes have not yet been highly developed everywhere is merely a matter of convenience. Wireless technology is already quite competitive in many markets, and could easily be more so if the telcos make their services of lesser value to the users.

Beyond the question of mere perceived value is the militant nature of the geek culture. These people believe they own the Net. While many were not living when the Internet was born, they have inherited the culture which created it. Without them, it would almost surely stagnate. Far too many commercial coders share a piece of that culture, and if forced to choose, might revolt in various measures: quitting their jobs, secretly working against their employer, or worse. Those who stay would risk being cut off from the ferment of creativity. Commercial Net operations themselves would be forced to choose, and might easily dump the telcos.

Ed Hurst is Associate Editor of Open for Business. Ed runs a computer support ministry in Oklahoma City. He loves computers, runs FreeBSD and GNU/Linux and reads all sorts of things. You can reach Ed at ehurst@ofb.biz.