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SBC CEO: Pay up if you want to use our pipes
acousticiris writes "If there were any delusions that Ma Bell Wasn't Back, SBC CEO Edward Witacre has cleared that up in an interview with Business Week Online. When asked about Google, Vonage and other Internet Upstarts he responded in typical Ma Bell Style: 'How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?'."
This doesn't seem as funny as it used to be.
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Don't they have ISP fees much like we do, whom probably pay the phone company for using their "pipes"?
In undeveloped countries, the consumer controls the market. In capitalist America, the market controls you.
The comment is interesting, but an empty threat. The *customer* is paying for the pipes. The companies that the customer contacts are not using the broadband pipe except on behalf of the customer: any downstream transmitted across that pipe is paid for by the customer. As a specific example, I can pay for various downstream speeds with my cable company and DSL is ordered with a speed for upstream and downstream. That price breakdown makes it clear that the broadband payment I'm making is for both upstream and downstream, otherwise why would my upstream remain constant but my downstream increase if I throw more money at the cable company?
On the other side of the fence the "Internet Upstarts" are paying for *their* pipes as well. Even the pipes "in the middle" are indirectly paid for, although that process can sometimes breakdown (as Level3 and Cogent are proving). It isn't like there is some magic way to get access from point A to point B "for free". The costs are just bundled in your access bills. What ticks off a telecom is that the prices for packets are so darn *cheap*. It makes land line voice look expensive, which is driving the adoption of VOIP.
If they decide that paying for your pipes (both directions) doesn't give you access to the services you want, the only option is to impose filtering. If they decide to filter, block or otherwise prevent the customer from unhindered access to Internet products they will be in violation of the common carrier provisions. Which is fine if they want to then make a stab at blocking *all* bad stuff the Internet contains. However, I suspect that's not where they want to be, as without common carrier status they become liable for anything they *fail* to block.
Frankly, all this comment proves is that they are desperate for revenue and yet know they can't raise rates on telephone services (thanks to regulation) so they are flailing around for anything they can think of. Legal probably sent him a "memo" right after that comment got back to them though, as I'm pretty sure *they* understand the ramification of the implied threat.
Sig under construction since 1998.
Why should they be allowed to use my pipes?
Because the customer is paying for them there pipes. Last time I checked, yip billed yesterday, I paid for my phone line, cable TV with broad band and if you want to include the cell phone, that is mildly broadband, then that too. Now Polyester Ed, if you are paying for my bills then you can say what can and can't go over the line; you want to regulate the neighbors line then you'll have to pay for that one too. I bet Google has some kind of leased line also but I doubt you can pickup their bill though; you'll have to ask them as I think they have some kind of business model or some other buzz word that will confuse you.
Now I believe Poly Ed is talking about the backbone network infrastructure that becomes a little shady. Does it make sense to pay 7 cents a minute to cross these main backbone lines? I wouldn't push a $100 billion gorilla too far; you may find that they'll replace your lines with something they own and then you'll be paying them.
Better question: Why the hell should I use SBC's pipes if they're going to be such dickheads about it?
Now I feel better.
Boycott everything - they're all trying to fuck you one way or another
Better yet, why should we continue to subsidize a dying business? First, you bitch when municpalities try to install subsidized internet for the masses, then you bitch when people try to use a monopoly connection to eliminate your services.
Stop whining and change your dying business model.
More
I knew that slashdot was going downhill, but why are they posting stories about CEO drug use? Who really cares who uses which pipe to smoke thier stuff in. It's all about puff puff pass people!
Whoa, wait a minute there. The customer has *already* paid to 'use the pipes'. I pay a monthly fee for internet access - why should I or Google, or Vonage have to pay extra to use the pipe for whatever I want?
What am I supposed to be outraged about? Broadband providers have never, as far as I can recall, provided bandwidth free of charge to their customers; nor would I expect them to. What am I missing here?
If you don't know where you are going, you will wind up somewhere else.
Problem is that they're already paying for the use of the lines. What do you think your monthly ISP fee is doing?
Seems he now wants to be paid twice.
Real Daleks don't climb stairs - they level the building.
You installed these pipes while you were part of a regulated monopoly, using public right of ways.
When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
This isn't 1905 and as long as I have a few choices Ma Bell won't be one of them. I've got cable... if they blow it I can go satellite, Power, Fiber, and worst case scenario I'll become an activist to set up a community Coop ISP.
Ma Bell is to late in coming back to the game!
I
... why google has been buying tons of dark fiber in the past couple of years.
One of these days, this jerk^W typical CEO will realize -- too late -- that he has painted his company in a corner with that type of statement. By then, it will be too late to save SBC, but not too late to grant himself a huge, last-minute bonus.
The right to offend is far more important than the right not to be offended. (Rowan Atkinson)
Unless i'm on the wrong tariff, there's nothing "FREE" about the £19.99 I throw at my cable provider each month.
I appreciate that I've been getting all this broadband for free all this time. Oh, wait, I pay a monthly fee for that. Hmm, perhaps I can pay that fee to someone else who won't be so restrictive? Where is that number for Speakeasy...
The gentleman seems to have an odd understanding of how this all works. Google pays him to get to me, and I pay him to get to Google. The second that changes, I'll pay someone else who doesn't feel that it's a privledge to get my business.
What a moron.
What the hell does he mean by people using his "pipes" for free? I pay every month for my access. And I'm not paying for wires strung to my house, I'm paying for bandwidth, for the ability to get packets in and out of my router. Nothing free here, I paid for it.
Yes, there's someone on the other end making money on this and the greedy bastard thinks he should get "his share". Does he want that to apply to every transaction?
I called and ordered a pizza for delivery last night. Do they get a cut?
I checked my bank balance and paid a couple bills this weekend. Do they get a transaction fee?
I do work from home some days. Do I need to give them a portion of my pay when I do that?
I mean.. let's get real.
Best, url the bounty network
Best,
url80, The Bounty Network
This sort of mindset is exactly why Google is dabbling in setting up WiFi networks and why Microsoft has been investing in community mesh networks. They need a credible alternative to DSL & Cabel internet access, or the providers of last mile connectivity will start looking for a share of revenue of everyone who delivers services over IP for access to "their customers" That's right, they want to charge you for the pipe on one end, and turn around and charge the people you are connecting to, on a per transaction basis, if at all possible.
Don't think they aren't determined to find a way to do it.
What's needed is enough competition to make it impossible for them, and that is going to take more than a choice between the cable company and the phone company, even better if some of that competition has ways of turning a profit beyond simply gouging for connectivity.
... I will leave you and go to a provider where my stuff _will_ work?
This stupidity will die when the board of directors of the first company that tries this fires the CEO for the inevitable backlash.
How much scarier if the government blocked these services to protect their phone monopoly money? Thank goodness the US telecom market is mostly private...
Gamingmuseum.com: Give your 3D accelerator a rest.
In context, he is talking about VOIP.
In effect, SBC is providing the means by which VOIP providers are competing with SBC's phone line business. That's what bother him.
But he has to understand, if SBC is going to offer generic internet service, they have to tolerate customers using it for whatever they want. What Whitacre and his ilk would like is to regulate what customers can do with the service. This would start with shutting out competition and progress to charging for each protocol, port, destination, etc..
We have to preserve the common carrier principle in internet access.
She is going to come in, claim to fix all those nasty problems with the internet, and get money to do so.
People will pay to have a 'cleaner','smarter' internet, and she will have a contract that basically lets her control anything comeing into or out of the computer.
These people are really good at this game. They will stand in front of congress and lie, they will cheat, they increase there rates and call it a tax so people will think it's cause of the government.
SHe's a bitch, she is smart, and she has no morals. Don't turn your back on ma bell, she'll put a shiv in it.
The Kruger Dunning explains most post on
Hmmm. I guess I missed that implication. I agree that that is idiotic; I as a customer have specificly paid for the ability for google to send me bits. Ergo, the pipe is already paid for. If he doesn't feel that the ISP rates are sufficient to cover his costs, he should feel free to raise his rates and get eaten alive in the market.
If you don't know where you are going, you will wind up somewhere else.
since the American people subsidized them through TAXES and SURCHARGES WE FUCKING PAID. How about we, The People, take back the part of those pipes WE paid for and then you, "the corporations"*, can pay The People for using OUR pipes that you're making money off of. That way we, The People, can choose who WE want to be in control of the pipes. Just so long as Google stamps out an iron-clad privacy policy where they don't frigging data mine everything on the pipes I'd give all my pipes to them in exchange for fast access (something along the lines of 10mb/10mb would be nice) and the ability to host my own servers.
*Please note that corporations are lower-case and should be treated as such. They should not hold the same status legally as The People (we're mentioned in the Constitution, not them). Period. I'm all for the "American Dream" but not at the total expense of We, The People.
Dream as if you'll live forever.
Live as if you'll die tomorrow.
~Anonymous~
Let me get this right. The CEO of a very powerfull company said "but I ain't going", where the correct way would be "but I am not going"? Damn, CEO and still cannot speak proper English. Pretty scary.
Wow after comments like these I can almost feel the next article coming on about how far the US is lagging behind the rest of the world on broadband.
This has been quite intelligently commented on NerdTV Ep4 Juicy bits.
He mentions AOL initial business model to have content providers pay AOL rather than AOL paying the providers and how they totally missed the opportunity to rule the internet.
Not a totally stupid idea...
Artificial intelligence is no match for natural stupidity
Pretty much sounds like it: trying to defend a business with an out of date business model by attempting to 'regulate' rather than trying to compete and give their customers what they want.
It may take a few years but unless he changes business tactics his company will slowly die, just as the dinosaurs did when conditions changed and they did not adapt fast enough.
$0.25/min long distance, and if you didn't like it, you could write a letter - cause Ma Bell owned the system. Telephones? Oh, no, you couldn't buy them, they could only be leased from Ma Bell on a monthly basis.
There was a reason that Bell was broken up. It seems that everyone at the FCC was born after that decision, and only feels pity for the poor, destitute baby bells taht just can't compete as little guys. And they're so darned cute, wouldn't it be great if they were just one big company. Think of the efficency! Phone rates could be cut in half and in half again, if they just weren't made to compete with one another. *shakes head*
The whole separation of infrastructure from service is a good thing, in general, for prices (California's f*cked up electrical system notwithstanding). If you let one company control the lines and the service, all you'll get is lousy service and high prices.
This is where we're headed, and taking your business "elsewhere" won't mean much when most of the system ends op owned by one company, whether through buy-outs or mergers.
Is it just my observation, or are there way too many stupid people in the world?
Clearly this is a man who is comfortable with the idea of monopolies being granted to him (and not his competitors) and uncomfortable (even angry) about anyone figuring out how to compete with him. My read on this is that, given a choice between innovation and staying in a monopoly world where he is king he'll choose the latter.
Welcome Back Ma Bell, we haven't missed you!
So SBC charges Google to "reach" their customers or they block access. Google decides to be fair that they should charge SBC for each search that SBC customers instigate on Google or they block access. Whom do you think would be in breach of contract from the user's point of view? Google who provides a search service without commitment to the user or SBC who contracts to the user to supply internet connection services?
Sounds like at least one position is unsustainable...
The NSA: The only part of the US government that actually listens.
He doesn't want what he says he wants, at all.
.iso download. The only difference is that the specific content is perceived as a threat to SBC's business model.
If SBC starts regulating content on their wires, then they open up a huge legal can of worms regarding liability. VOIP is just content. It's conceptually no different than a video stream or an
But that doesn't change the fact that it's content.
I sincerely doubt SBC wants to be responsible for all the content that crosses their wires. The last thing any company needs, even one as big as Ma Bell, is an endless stream of lawsuits about kiddie porn, bomb making tutorials, warez downloads, DVD rips, mp3 streams, so on and so forth.
Common carrier means common carrier, and changing the definition of common carrier would cost an asinine amount of money, even by the standards of corporate fund-slinging on Capitol Hill.
Reality has a conservative bias: it conserves mass, energy, momentum...
Plus evil.google.com would probably be in beta for a very long time.
Uttering logically derived and empirically supported truths to the disciples of the orthodox establishment.
And how do they propose to get .com's to pay them to "use their pipes?" What can they really do? Block access to google or Vonage? I don't think so... If they tried that with me... I would immediately switch ISPs... They would not be able to pay me to stay with them...
It is such an old school business attitude... The phone companies need to realize that the days of monopoly are over... The gig is up, the cat is out of the bag... etc... VoIP works great... Vonage is so simple to use... someone's grandparents could use it...
Even if there were some widespread blocking of Vonage... it would not be hard for them to get around it... It isn't like they have to stick to standard SIP ports... Their service could easily run over port 80... If they tried to block their IP address, could they not start using IP blocks from their ISPs? And hey.. aren't the ISPs already making money on transit costs for these companies...?
This guy is a real loser... Sell your stock in SBC
He can try to charge for VOIP, but as soon as he starts, thats when more innovation will go into beating his detection methods. Such as encrypting the call, tunneling through other protocols, etc. I understand that VOIP is very latency sensitive, and every layer we put on top of it could possibly lower the quality of the call, but I still believe we can achieve better quality than cell-phone while encrypting the information. The real question will be, will the US Government support him in his desire to charge. I guess it will be interesting to see, hopefully other companies like Vonage will step in and work against him.
Just try getting an SBC DSL line without paying for a voice line. You can't do it. So goodbye vonage, skype, etc over SBC pipes, because it just becomes redundant.
If their routers deliver a consistently bad QoS to all packets sent over the wire: a bit of jitter, nothing to affect bulk throughput, just the whole VoIP experience, then you can get a bad skype/google talk experience without ever having your packets sniffed.
then you sign up with the cable telco's "high quality VoIP solution", which pretends to mean better pipes upstream but really means TCP without the jitter, they get their tax.
-steve
The problem is some one has to pay for the infastructure. If the phone companies stop making money at it they will stop maintaining the phone lines and expansion will cease. This won't be per se out of meanness or greed it will be from an inability to pay people to preform the tasks and to pay for wire and materials. The only real solution is to nationalize the wires both phone and cable. No one really wants that but it may be the only solution. The small amount they get from internet usage won't pay for the infastructure. Phone rates have been dropping like a rock for years and traditional phone companies are rapidly becoming unprofitable and may be unsustainable. People forget the bad old days before competition. Back in the sevenities almost anywhere you called was long distance and an hour long call could easily cost you $5, we're not talking adjusted dollars either. The average person now spends hundreds of hours, I'm guessing between 500 and 1,000 hours, a month on long distance. At 1970s rates in adjusted dollars that was more than most people would have made a month in total income, a couple of grand a month back then was really good money and $3.65 an hour was minimum wage. Phone rates have dropped radically and keep dropping. They are likely to continue to drop so I doubt traditional phone companies can survive. Before you say Ding Dong The Witch Is Dead imagine what will happen if it gets nationalized? Corporations tend to be more efficent, radically so, than government. The far better result would be for the corporations to survive but have stiff competition. I honestly can't see this happening without regulation that will enrage customers since they will see it as protecting corporate profits. It may in fact be mostly that but it's also protecting the infastructure. Before you cry BS imagine the next time your phone line or cable line goes down there's no one there to fix it? Your VOIP phone ain't gonna work then. It's a double edged sword. I hate the phone companies and they got fat in years past but we aren't better off if they go under. The lines may have been paid for decades ago but like roads they must be maintained and eventhough the right of way is public the lines are privately owned.
In the circuit-switched telephony world, carriers exchange CABS (Carrier Access Billing System) records, which are redeemed for cash at the end of each month. For example, you call your Uncle Zed long-distance for one minute and are charged six cents or whatnot by your phone company for the privilage. Well, Zed's phone company will charge CABS to your phone company, and at the end of the month, Zed's phone company will get a check containing a cent or two in payment for completing your call. It's not a lot of money but the volume is very, very high, and a phone co. can make some decent cash if they terminate a lot of calls (think dialups.)
Pretty obvious now where this guy is coming from, eh? Too bad the internet doesn't work like that! The best they will be able to do at this point is to work on screwing up peering agreements in their favor.
IMHO, the big telcos will be the first with their backs up against the wall when the revolution comes.
Even old-fashion dial-up's been asymmetric since the beginning.
The first commercial modems [1962] were 300bps and were synchronous. As were all the subsequent modems through 28.8k. It wasn't until the 33.6k modems [and accompanying dial-up access] started being asynchronous. [33.6down, 28.8 up]. And of course the 56k modems were as well.
So unless you don't consider 'dial-up' to have started until after 1996 [around the time the 33.6k modems were becoming popular] I'd have to say that's a bogus statement.
ender-
{Dialing into the internet since 1991 [starting at 2400bps], and I consider myself a late starter}
Nothing to see here
Read the article. He's responding directly to Google, Yahoo and Vonage starting up VOIP. His broadband customers are already paying for broadband. Google, Yahoo and Vonage are already paying for their bandwidth, so he's already getting paid twice. And now he wants a cut of the VOIP revenue because his fixed lines "can't compete" (never mind he got those fixed lines, as well as the broadband infrastructure, and the permission to put them down, with enormous government subsidies, partly in the form of monopoly rights -- I guess that'll be the fourth way he wants to get paid).
The guy's a dick.
Luckily, Google and Yahoo are such huge enterprises, that they'll sue his ass for all he's worth if he tried to go through with it.
SCO employee? Check out the bounty
VoIP is the future. Why can I route an HTTP packet to Iran but not a packet with audio?
The more they fight it the stupider they look and eventually will lobby to play catchup [e.g. force the actual players to comply with stupid laws like E911]. Hey SBC, wake the fuck up, the days of $1.30 a minute to Europe are long over.
That and what of peering? You gonna charge me money to talk to a voip user who uses your ISP services? Ok, how about my ISP charge your customers money for using my ISP?
This is just more of "I don't get it, I don't want it, it shouldn't be".
Tom
Someday, I'll have a real sig.
There is software that can detect VoIP traffic and even identify the carrier. Telcos use this to *protect their networks*, but it can also be extended to protect their profits.
While it is illegal for Witacre to drop all VoIP traffic, it doesn't mean he won't be identifying this traffic and providing it with highly degraded service with added noise, especially if the call's destination is one of his clients. This way he can do his best to maintain his customer base since the average customer will believe that using VoIP is like talking through a tincan.
Sure in the end the buggywhip tech of the old Ma bell will loose out, but it will be a prolonged fight. Witacre rebuilt ATT, he's pretty shrewd. -- the guy just single-handedly overturned one of the largest anti-trust cases ever. I don't think he's going to be easy to presuade with some little "laws".
Let's charge the people using the lines, and charge the services that are provided.
Why stop there?
Bill me for stopping to pick up groceries in addition to the groceries.
Charge my credit card for browsing Amazon
While I wait in line, absorbing all that heat you'r providing (or shedding BTUs alternately) charge me an hourly rate - no fractions!
This is the very heith of idiocy. Does he realize how much dark fiber is out there? This is right up there with banks and bank tellers: I used to interact with a human teller and get my funds, or deposit the til. Now, I 'interact' with a machine - a machine that doesn't have health care, disability insurance or a retirement plan - and the bank charges me - ME! - for the privilege of said machine use.
Oh wait I forgot. Greed is a very successful business model.
kulakovich
1. The majority of lawmakers utilize the internet at home. Many of whom pay attention to the bills they pay at home, even if they are willing to spend 40k on a toilet seat at the office. Most adults do not allow their child to *call* overseas, but would think nothing about allowing them to visit an overseas website. If there were suddenly surcharges for every node hit along the way, the internets usefulness for the majority would suddenly decrease dramatically.
2. The US is not the only country that provides access to (or content on) the internet. Lobbying the US govt. for the right to bill website owners will not fly. If the EEU says "No, we don't agree", what would the US government do in retaliation? Fortunately, congress does not have the power to legislate communication billing methods for the globe.
3. Connection fees are already paid by parties at each end of any transmission. So, technically, there is already a double billing going on. What they are looking for is a third (and fourth and fifth...) helping.
4. Monopolies are illegal in the US (and Canada, and probably most of the other big trade countries. Haven't checked tho). "Ma Bell" will never again be a monopoly. The law isn't the only reason, either. People are more informed today about the impact that monopolies have on prices and availability of service. We expect choice, and will not tolerate a single vendor option.
I think Google and all that dark fiber they are buying is going to soon be a "FUCK YOU" response to this guy. OK, we won't use your pipes! Suck on this... get on the web with free WiFi via google.
Note to self: Sell all SBC and T stock. I'd wondered if T would climb to SBC valuations or vice versa. This toxic rube just answered my question fairly clearly: he has NO idea what is going on in the industry. He's like some halfwit lovechild of Michael Eisner and Darth McBride.
A hint to Mr. WitLacker: Due to overbuilding that was done by SBC and others during the dot-com years, dark fiber is still stupid cheap. Now, if you want to strip money from google, you'll have to ruin your own market among other customers, since I can imagine a dozen tricks ranging from buying up existing contracts to teaming with owners of existing contracts to upgrade endpoints to increase per-fiber bandwidth. Your own client base is in a position to compete with you if you get greedy.
Or Google can short-circuit past you by renting/leasing dark fiber and buying their own endpoints. And anywhere you've got a rock-solid monopoly, they can explore stopgaps like microwave. In a phrase, you can't put this genie back into a monopoly bottle, no matter how hard you try.
Next, I'm not sure how you plan to detect which endpoints are google's, or how you intend to increase charges to those endpoints without getting excessive on all other datapoints, given the rather ambiguous nature of data packets. But, if you are able to differentiate the data, all Google has to do is refuse to pay. Every time you block a paying customer from reaching Google, you'll be drowned in loud screams. After questioning your parentage, customers will insist someone's in of breach of contract (either you or google) and since they don't pay google for access, They'll blame you. If you try to shift the blame to google, we all *know* who'll win those legal/PR battles.
This isn't your grandma's ol' monopoly: for every tactic you can think of, the data infrastructure (which is what geeks like me consider the REAL internet) is creating alternatives. And every time you squeeze, you'll lose PR and goodwill and customers. You'll piss off shareholders. You'll piss off techies (ask your canine mom, Darth McBride about the wisdom of doing that). Oh, and the state public-utility regulatory commissions: act like a monopoly and various state legislatures and their consituents will shove your sorry ass deep into regulatory hell: imagine a world where the regulators deem that dark fiber will be repriced downward until it is fully utilized.
do you mean evil.google.com:666/?
Website Just Down For Me? Find out
Synchronous means that the two bit streams (sender and receiver) are synchronized, so there's no necessity for breaking everything into bytes with start and stop bits.
Symmetric, which is what you were actually refering to (as was the GP) is where one side is capable of transmitting at a faster bit rate than the other side.
Nowadays, most serial modems simulate asynchronous operation at the RS232 port, but transmit data as LAPM packets over a synchronous connection, under V42 and its successors.
Asymmetry in modems predates V34 BTW. There were a myriad of 9600+bps modems made in the mid-eighties where one side was clearly faster than the other, as modem manufacturers adopted various proprietary ways to squeeze more and more bandwidth out of the phone lines.
In terms of ITU standards, the V23 standard (1200bps from content provider to you, 75bps back) was very popular in some parts of Europe, notably Britain where it was the basis for BT's Prestel system. Very suspectable to line noise, but it generally worked, and, being frequency modulated like V21, was cheap to implement with the techologies of the time.
You are not alone. This is not normal. None of this is normal.
Here at the Phone Company we handle eighty-four billion calls a year. Serving everyone from presidents and kings to scum of the earth. (snort) We realize that every so often you can't get an operator, for no apparent reason your phone goes out of order [snatches plug out of switchboard], or perhaps you get charged for a call you didn't make. We don't care. Watch this [bangs on a switch panel like a cheap piano] just lost Peoria. (snort) You see, this phone system consists of a multibillion-dollar matrix of space-age technology that is so sophisticated, even we can't handle it. But that's your problem, isn't it? Next time you complain about your phone service, why don't you try using two Dixie cups with a string. We don't care. We don't have to. (snort) We're the Phone Company!
http://www.tvacres.com/comm_ernestine.htm
The guy who supplies a cable to your house has fixed costs and variable costs associated with supplying it.
The fixed costs are the physical line, maintenance, exchange equipment etc.
The variable costs are basically the calls, or are they? It costs them a fixed amount for the infrastructure to enable you to make calls. Once the mainly fixed costs of providing the infrastructure is met then profit starts. I know this is a simplistic description but it mostly hold water. So in effect the business is built around mainly fixed costs.
However if you take away the revenue associated with the making of calls then something has to give to meet these costs which remain largely the same.
This can either be reduced profit, reduced costs or an increase in the fixed charge.
Reducing profit is something companies are unlikely to want to do. In SBC's case their profit $1.2 billion from $10.3 billion represents 11% profit. Not bad and they can afford to lose some from that. But get much below say 6-7% and alarm bells will start ringing. Not least they won't be keen on investing speculative money on a high risk, low margin business like say next gen. ADSL.
Reducing costs. I dare say there could be some of this going on in a business of this size but after not too long they would have to reduce their infrastructure costs. And reducing infrastructure costs would eventually mean reducing service.
The third option is to move the fixed costs onto the fixed costs the customer pays. IE The line rental and the Broadband supply.
Doubtless there are other ways of looking at it but any way must address the issue of fixed costs being paid for.
This is sure to set off a firestorm of US bashing, but the first thing that came to mind when I read this quote today was the interest in the UN and/or EU in wresting "control" of the internet from the hands of the US. Is this the type of thing we would see if these other parties gained control of the root servers? Pay up or no DNS for you??
Only in that case you (as a consumer) wouldn't have the option of punishing them for this outrageous behavior with your pocketbook by switching to another provider. You would just have to a) hope that the service provider (Google, Yahoo, whomever) would pay the piper; or b) you might simply be stuck if the service/information you wanted to access was deemed unacceptable and therefore all access to it via DNS was eliminated. (Hopefully you could root out [forgive the pun, I had to do it] the IP address on your own or you would REALLY be out of luck)...
Every time Ed or his Verizon equivalent gives a free-wheeling interview, the corporate PR types spend the next few days issuing retractions and clarifications ... you can't
take what these guys say in the newspaper
as anything but stream-of-consciosuness.
Sort of like a football player talking in the
locker room to the press after a game ...
All this stuff about broadband and Google is chump change. Why aren't the shareholders of SBC demanding a stop to the free ride for Domino's and Dell and all the other businesses using SBC's phone lines to support their business models? SBC has made a considerable investment in those lines and they have to have a return on it. Do these freeloaders think phone service comes free?
Didn't Mebtal/Haw River Communicatons already try to block VOIP from their network and get sued for doing it? I believe the matter went to the courts and the ruling was in favor of the consumer. From the Mebtel Form 10-K filed with the SEC: [quote] he emerging technology known as VOIP can be used to carry user-to-user voice communications over broadband or dial-up service. The FCC has ruled that some VOIP arrangements are not regulated as telecommunications services, but that a conventional telephone service that uses Internet protocol in its backbone is a telecommunications service. The FCC has initiated a proceeding to review the regulatory status of VOIP services and the possible application of various regulatory requirements to VOIP providers, including the payment of access charges. On March 3, 2005, our subsidiary, Madison River Communications, LLC, entered into a consent decree with the FCC on behalf of itself, Madison River Telephone and the affiliated companies under the common control and ownership of Madison River Telephone. The purpose of the consent decree was to resolve an investigation by the Enforcement Bureau of the FCC into allegations that the subject companies were blocking ports used for VOIP applications, thereby affecting customers' ability to use VOIP through one or more VOIP service providers. Under the terms of the consent decree, we agreed to pay $15,000.00 and that we shall not block ports used for VOIP applications or otherwise prevent customers from using VOIP applications. Expanded use of VOIP technology instead of traditional wireline communications could reduce the access revenues received by local exchange carriers like us. [/quote]
We have to buy all these trucks, and pay drivers for all of these routes. Then these companies come along, and they decide that they can use OUR infrastructure to send THEIR packages. Our service is intended only for sending postcards to granny. If those companies want to use OUR service to facilitate THEIR business, then they better pay m/e/ /a/ /k/i/c/k/b/a/c/k/ us for the priviledge of using our facilities.
Lately it's even come to my attention that people and even businesses in FOREIGN COUNTRIES can send mail through our system. If they don't pay up, we're going to start burning their packages for heating fuel.
Verizon has started to move their customers to fiber right to the premises, and when they do, they move your POTS line to fiber as well (although they don't tell you that very much). They're equipped to offer TV service through this same fiber, although they currently lack regulatory compliance.
Between their EVDO service and fiber, they've turned the tables on the cable companies and gone from irrelevant to the top in a space of just 2-3 years. Verizon, for all the complaints against them is actually competing and not whining. At least not yet.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
Ok so I was about to post a gut response and then I went back to RTFA and thought it through again...
:)
Let's try the legacy Ma Bell perspective:
You make a phone call to Joe. You initiated the transaction but both you and Joe pay for access to the network. Even further, in the wireless phone world both you and Joe likely pay per minute for the call.
Now let's try a cable perspective:
You want subscribers who will pay a monthly access fee. To get them, you need the best available content. You MUST get networks such as ESPN, CNN, ABC, NBC, MTV, etc. into your content package. You don't charge ESPN for access to your "network"...
Similarly, newspapers:
You need subscribers. You pay content creators (reporters, comic authors, etc.) for the content necessary to attract and retain subscribers.
It seems the battle is which model does the data backbone (the Internet, if you will) fall into? Is it simply a network by which people and organizations can communicate with no guarantee or claims as to the quality of that content (a la the phone network) or are you selling end-subscriber access to a content service (a la cable TV or newspaper)?
I think for SBC the answer is "yes". It's both. They have end customers who want access to the Internet FOR the content that's there. They also have customers who just want a communications network for data. Here is another way to look at the power of the organizations involved:
Could a major Internet content/service provider (Google, CNN, Apple iTunes, Yahoo, etc.) approach a network provider (SBC, Comcast, AOL, etc.) and threaten to cut off those network's subscribers unless the network provider PAYS them for their content?
This would be the true coup de etat in the industry. When a single content or service source becomes so demanded by end consumers that it MUST be available on your network to keep those subscribers. I don't know that any website is yet that important... Maybe Windows Update could be, if anyone used it.
Come play Moral Decay!
I remember the noble "Fibre-to-the curb" promises made 15 years ago. Where's my fsking fiber to the curb? I moved into a new neighborhood about 6 years ago and suffered with a crappy dialup that would never go faster than 28k because cheap-ass SBC had my whole neighborhood multiplexed back to the central office. No DSL, no 56k. Screw them. Even Comcast cable, who I really *don't* have a problem with is better.
"Eve of Destruction", it's not just for old hippies anymore...
Balkanize: To divide (a region or territory) into small, often hostile units. [From the political division of the Balkans in the early 20th century.]
My outbound port 25 is already blocked and I'm forced to use the "free" mail servers instead of my own mail servers with my host provider. They implemented this without pre-notice. People complained, nothing changed, and SBC is still happily selling a service that sounds like your getting the "whole internet".
They get past the "bait" laws with the fine print that few people read before making a purchase, including the end user license agreement that'll likely piss you off if you read all of it. I doubt these large companies would allow something as obvious as a bait law slip through legal. The only repercussion that SBC will likely need to consider is whether their customer base will accept this type of treatment or not; it's not likely that enough people will understand what they are missing or being denied to make a difference (I hope I'm wrong).
Simple. If Google sees YOUR ISP's customers try to use their services (Search, Earth, Maps, Froogle, anything), it can inform them of how greedy you are, and of what alternatives they have in the area. Besides, Google's been going around buying up dark fibre for some time now, so hold on to that last shred of relevance while it lasts.
I, for one, have long ago given up on land-line phone service. The only thing it's cost me, besides a phone bill, is the ability to initially configure a Tivo.
The REAL jabber has the user id: 13196
What you do today will cost you a day of your life
Said Bubba "HogLeg" James, upon hearing this news.
I don't know if anyone else has pointed this out, but I believe what he is talking about is VoIP and not content. Since VoIP is becoming the big thing now days they, the telcos, need to find some way to charge for other companies running VoIP over their pipes or they will become obsolete. Or so they think. Take a power outage and VoIP is useless.
There are two major products that come out of Berkeley: LSD and BSD. We don't believe this to be a coincidence.
In a free market system the consumer chooses what they will pay for, and the onus is on the company to make the numbers work. If they cannot, they go under.
I can't emphasize this enough--uncompetitive companies must go under for the free market to operate efficiently. Propping up an aging, uncompetitive company hurts consumers--through poor service, high prices, and slowed economic growth.
In point of fact there might not BE any way for SBC to reconcile their fixed costs and the new consumer expectations of fixed connectivity pricing. So be it--that's life.
SBC/AT&T could go under tomorrow and the world would go on. Either: they would declare bankruptcy and write off debt and renegotiate union contracts, thereby lowering fixed costs, OR some other more competitive company would purchase their assets, employees, and customer lists, and provide service more efficiently. It would messy for a while, but when is any change neat, even if it's badly needed?
SBC/AT&T is welcome to do their best to get return on their investment. But the burden is on them to make it work, not on us.
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.
Maybe because the more compelling bandwidth-intensive apps there are, the more demand there will be for bandwidth (i.e. "your pipes")?
Vonage isn't stealing from you, they are selling your product! You can't use Vonage without a broadband connection. And if customers get used to running several apps like Vonage, they'll find that they have saturated their cheap $19.99/month DSL plan, which means they'll start wanting to bump up to the pricier plans.
Nothing sells a platform like apps, and if you're the phone company or the cable company, you're the platform. You want to encourage the growth of these apps, not shut them down.
Read my blog.
What I believe he is referring to is the big folks using existing SBC facilities ( ergo fiber and transmission equipment ) to connect ' their ' customers to the internet backbone via SBC owned systems. Nothing is really changing here except SBC no longer has to provide a ' discount ' to competition to utilize SBC lines.
Initially, that was the agreement in order to allow competition to get their foot in the door without requiring them to build a network of their own before they did. Hehe, it's somewhat expensive to build a network without a LOT of upfront capitol. However, most didn't bother to build any network at all of any kind and simply resold SBC pipes to end customers via a middleman setup. If something broke, you called them, they called SBC. SBC folks worked on and fixed problem, reseller contacts customer telling them problem is fixed, customer is happy. Don't think it stopped there. SBC runs data through other carriers ( Sprint comes to mind ) as well and occasionally Customer A's data goes to reseller B's service that travels SBC pipes which are muxed into really BIG pipes going through Sprint owned systems. It's a never-ending middleman game.
Project Lightspeed is designed to compete with the cable companies. It will, theoretically, provide phone, TV and broadband via fiber straight to the home. Assuming you live in a newer home, neighborhood ( read that expensive home ) that will attract customers that don't mind paying the prices SBC will charge for it. For that reason alone, I don't think it will keep pace with cable since cable pretty much goes everywhere and not just the rich neighborhoods. Of course the big money is providing business with this kind of service and not really the end users like you or I. We stand up and start yelling about something broken and we get ignored. Let a company like Shell Oil or Fingers Furniture or *insert your typical mega-sized business here* and things start happening. Executive level management starts getting involved and general chaos ensues until the problem is resolved. You think the aforementioned businesses have to deal with a thirty level call tree to report a problem ? HA, you keep thinking that
There are not many companies out there that can provide the ' upstarts ' with the dark fiber they would like to have. Most of it is / was owned by they big gorillas in the market, so technically they'll still have to pay for it. Only difference is they will have to provide their own transport equipment to get it from point A to point B.
You are correct about the ' floundering for cash '. Seems like SBC is trying to cut costs in any way / shape / form they can. Once the acquisition of ATT is done, rumors have the IT department taking a ten percent hit across the board. Of course to those who don't make eighty million a year ( like the hanchos ) it makes more sense to trim the excess from the top than it does the bottom, but then, this is an American company and they just don't think like that
Lastly, the rumor mill puts Ed retiring soon. Very soon. Once that happens it is also the rumor that the former CEO of ATT will be the new zookeeper in the gorilla cage. That and the fact that SBC will be adopting the ATT logo / name begs the question: Who really bought whom ?
sounds like this guy should really lay off the pipe for a while...
"In America, first you get the sugar, then you get the power, then you get the women..." -H. Simpson
SBC is not saying that they'll block websites or parts of the internet. At least, not in this interview they're not.
SBC is saying that they won't provide access to their "last leg" networks for free. As in, Google can't sell broadband service in West L.A. without paying some fee to SBC for the privilege of using the wires that SBC installed and is responsible for maintaining.
The real underlying issue is who decides how much SBC and other broadband hardware owners can charge broadband resellers for the use of their network. SBC would like to charge broadband resellers (including Google) at least as much as they directly charge to consumers so that the resellers can't compete with SBC in the broadband market. The resellers obviously want a price large enough to make a buck of their own (free would be great).
This is where the FCC has been tasked to find a balance. Unfortunately for consumers, their balance has shifted towards SBC and Verizon away from AOL, Earthlink, and Google broadband.
Regards,
Ross
Give it a few years, wireless will do anything your "pipes" do, moron.
And it won't be owned by you, it will be owned by Google.
Have a nice day, dinosaur.
Richard Steven Hack - This sig is TOO GODDAMN SHORT TO DO ANYTHING USEFUL WITH! MORONS!
Whenever anyone lays down copper wire, fiber-optic or pipes, the city will charge a "right of way" for use of the land and cost of restoring the strip of land use (such as digging up and re-paving a street). For most public utilities, this "right of way" cost is lower then for other businesses that seek to get the same rights. The idea is that the public utility disrupts the land used once and then other bussinesses should tap into the public utility. So, rather than a security monitoring company laying down it's own copper wires, they get dry (without dial tone) pairs of copper from the public utility. The FCC used to acknowledge the phone company's roll as a public utility by requiring that copper pairs be provided at cost. The CEO of SBC has since convinced the FCC that a tele-co should not be treated as a public utility and be able to use practices which reduce the public access to the infrastructure that SBC has gotten to build at a discounted right-of-way cost.
So, while he argues that other businesses should be required to pay for his pipe since they are competing businesses. He also still promotes municipal discounts on right-of-way as if he still runs a public utility. And he still promotes that other bussinesses should be pushed to use his pipes instead of being able to get right-of-way at a similar cost. So, for example, to run fiber optic between two buildings in down town Chicago would cost a non-profit University ten times as much as what SBC was charged. Hence, there is incentive to go with SBC for the fiber optic link. Arrangements are made in Feb 2005 for SBC "GigaMAN" service to be put in at June of 2005. Guess what still isn't in place?
Cities need to acknowledge that SBC is neither a public utility or has the public interest in mind for sharing right of way. As a non-public utility, SBC should pay the same exact price for municipal right of way as everyone else and refund the tax payers for the con of getting discounted right of way in the past as if they would operate as a public utility.
Of course, SBC's CEO will never come out and promote that SBC should pay it's fair share for right of way, just that other businesses should have to pay their fair share to SBC while the tax payer gets robbed by a company that is not a public utility but continues demanding discounts from cities as if they are.
I find it interesting reading all the comments about "Well...if they do that then change providers" as if EVERYBODY as multiple broadband providers.
FACT:
The Majority of DSL/Broadband users have one and ONLY one provider available to them. Cable and DSL co-exist ONLY within short distance of CO office facilities. Beyond the DSL length restriction Cable modems are practically (don't start on high latency satelight) the only game in town. If Adelphia decided to block google there is not a damn thing I could do about it besides paying to provision a data line to my house. DSL really is'nt deployed on back roads beyond major metro areas.
As I see it, after trying VoIP forl a while, the choke point is where the VoIP providers have to gain access to the PSTN. That is where the RBOC oligopoly can extract its price.
Often when placing a VoIp call, I experience a delay before it starts to ring. That is most likely the result of waiting for a connection to the PSTN. SBC, Verizon, Qwest (and the fading numbers of lesser players) can just charge handsomely for those connection points. Unless regulators control them in this, they'll try to do what they have largely succeeded in doing to the alternative providers for local service. The RBOC's have jacked up the fees they charge CLEC's, and the CLEC's are dropping like flies. The only competition for local service is cable, and the plans they sell are not cheap. That's why I am trying VoIP.
He who uses it pays for it. I see nothing wrong with SBC/AT&T charging people for the use of their pipes. In fact, the spam problem wouldn't be nearly so bad if spammers actually had to pay for the bandwidth they used.
But Google isn't the user in this case. Whoever is accessing Google is. The idea that I should pay SBC for serving up my website to an SBC customer is repugnant to me. This is not the AT&T telephone network, it's the internet. It is the SBC user who is initiating the connection and all data transfers.
A Government Is a Body of People, Usually Notably Ungoverned
It seems that this has been forgotten in the recent years and almost ALL of the business-consumer contracts are all unfairly one-sided!
Typical contract-
The business's rights:
2) We do not garantee the service. We do not garantee the service against interruptions.
3) We can change the terms of the contract at any time to any condition as we want.
The Consumer's rights:
2) The consumer has no other rights
This isn't the way it's supposed to work. There is SUPPOSED to be compensation for term changes.
Your thin skin doesn't make me a troll