The Future of e-Commerce and e-Information?

An anonymous reader writes "The Washington Post has an interesting article on what they label 'The Coming Tug of War Over the Internet. From the article: 'Do you prefer to search for information online with Google or Yahoo? What about bargain shopping -- do you go to Amazon or eBay? Many of us make these kinds of decisions several times a day, based on who knows what -- maybe you don't like bidding, or maybe Google's clean white search page suits you better than Yahoo's colorful clutter. But the nation's largest telephone companies have a new business plan, and if it comes to pass you may one day discover that Yahoo suddenly responds much faster to your inquiries, overriding your affinity for Google. Or that Amazon's Web site seems sluggish compared with eBay's.'" Seems like the idea of the 2-tier internet is really catching on with the market-droids.

Comments

OR

[AviLazar]

I stop using telco-DSL (not that I do, but many people do). This is a bad thing to happen - eventually the telco's will start blocking ISPs who tell them to F off. I am hoping a telco will do something stupid like block Microsoft, Google, yahoo, Ebay, Amazon...block one of the big names and watch how half your business goes down the chute. And let's not forget, this is absolutely ridiculous - the website I go to is not using the telco's lines, I am using telco's lines to retrieve the information...it is like asking my mom to pay for a phone call when I call her - absolutely stupid.

Re:OR

[dasil003]

Just like the music industry, the telcos better wise up. This whole phenomenon of creating markets out of thin air, and boosting profits by price manipulation rather than innovation is a serious threat to our economy. Only in a first-world country like America do we forget that an economy is supposed to represent some actual goods and services. This is exactly why China will surpass us, because we've got so much money that everyone's trying to scam a piece of the pie without actually doing anything.

Unfortunately it's inevitable that big companies will be too slow to adapt to an evolving economy, and they will push their bulk around trying to grab as much profit as possible before hitting the mat. That would be all fine and good if they didn't also control the government in the absence of a cohesive counter-interest.

Re:OR

[sosume]

When this happens, content providers will have to begin rolling out custom Wimax networks. If you cannot reach Google very fast through YaHooFi, but you can through GoogliFi, which in its turn blocks Msn.

It won't be long until the pc owners will combine their own Wimax access points and form a completely free unwired network. This is inevitable.

Capitalism

[PlayCleverFully]

Isn't this the basis of capitalism?
Competition creates better products with lower prices.
This is capitalism on the internet at its finest.

Re:Capitalism

[Caspian]

Capitalism is about competing, yes. But even in a society of competitors, there has to be some degree of cooperation. Imagine if Ford owned some highways, Chevy others, and GM still others; still other highways were owned by the Japanese automakers, and others by the Germans.

You could drive a Ford car on a Ford highway for a reasonable rate (say, $2). However, if the highway you wanted to take was owned by Chevy or GM, you'd be price-gouged (say, $25).

That is what they're trying to do to the Internet. Is this "capitalism", or is this simply "unfair to everyone but the corporate executives and wealthy investors who will profit from it"?

The Internet, like the road system, should be open to everyone for the same rates. Yes, that means that sometimes Company A will have to carry Company B's packets. Tough titty for Company A. Company B has to do the same. And we all win.

Not everything in life is about competing. Christ, I swear that there are some capitalists who'd love to license and market the very air we breathe. (Druuge, anyone?)

Re:Capitalism

[Guysmiley777]

Not everything in life is about competing. Christ, I swear that there are some capitalists who'd love to license and market the very air we breathe.

Genius! You're on to something here. Why should everyone have free use of the oxygen created by trees on privately owned land? I'm thinking an annual 'oxygen tax' for everyone on the planet that will payout to landowners based on how much forest they own. This is also the solution to global deforestation! Why slash and burn when you can kick back and let the cash roll in? (you know, just like welfare!)

Re:Capitalism

[SinceYouWas]

I am most playing devil's advocate here. I do not like this either, but I cannot really find a reason why the Telcos are doing anything wrong.

Because the analogy is a bit flawed. This is more a case of me traveling to where a business is located. Once I leave my house, there are many different routes I can take to get there. The telco proposal is that if I want to go to a business they have a deal with, I get to use the highway. Otherwise, I can take the back roads through the industrial park. And I don't get to choose, because the telco owns the roads, and they'll route me along as they see fit. This despite the fact that both the business and I have already paid for the roads.

It's crap.

Re:Capitalism

[Jah-Wren Ryel]

This is capitalism on the internet at its finest.

Telecoms are public utilities. This is not capitalism at all, it is the abuse of a government granted monopoly.

Kinda funny how that other government granted monopoly, copyright, is also being used to attack the usefulness of the internet. Perhaps there is a pattern here.

Re:Capitalism

[CmdrGravy]

Clearly any price increases faced by businesses will be met by corresponding price increases for those businesses customers. For example Amazon would have to charge you more for their products if they wanted to use this prioritised system and Yahoo/Google would have to charge more for adverts which would in turn be paid for by increases in the prices of the advertised products.

Really the only winner in this is the Telco with everyone else ending up paying more for much the same level of service ( I suspect that rather than their customers seeing any great increases in network speed you would see people who weren't paying for this scheme to suffer decreased network speed ).

The best bet would be for no company to sign up to the improved service but this it's probably optomistic to hope this would happen.

Re:Capitalism

[Intron]

The Internet, like the road system, should be open to everyone for the same rates.
I guess you didn't get the memo

Re:Capitalism

[whyrat]

The Telcos are no longer a government granted monopoly. In fact the government broke up a "monopoly" into the "baby bells". But that's beside the point, the phone companies have to compete with each other and are REQUIRED to share their lines... but not for free.

It's interesting: when the government forced them to divest into several small regional companies; "competative" market forces fought it out (with major scandals asside... MCI) to give us a bunch of mergers back into a few large companies.

Re:Capitalism

[lynx_user_abroad]

Like I said before: consumers and businesses already pay taxes to use highways, just like you and businesses have paid for access to the network.

Your analogy is flawed.

In the U.S., highways are built by and maintained with public money which is gathered in the form of taxes, including such things as fuel taxes, license and registration fees, etc. (Toll roads are an exception.) So to say that both private individuals and business both indirectly fund the roads is for the most part correct.

This does not hold for the Internet.

The Internet is composed of a large number of privately built, privately owned, and privately maintained networks which have been internetworked together. If you use dialup, then you are using the publically finded (and paid for largely by tax dollars) telephone system running across public infrastructure under Common Carrier rules to reach a private modem bank. Once you hit the modem bank, you're on a private network. If you have any sort of broadband access (cable modem, high-bandwidth portion of a DSL line, etc) you're on a private network as soon as you hit the network interface. Even if your Internet access is provided by a municipality or a public school, it's considered a private network.

So the telco's have a point to say you're using their network. Unless you're in favor of nationalizing the Internet (let's not go there, please) you really have no claim to it as just a taxpayer.

So while both "you and businesses" can demand a phone line, you can't demand high-speed Internet access: it's only available if some private network provided chooses to let you have access, and you choose to pay their asking price.

Small question:

[TripMaster Monkey]

From TFA:

In a November Business Week story, AT&T Chairman Edward E. Whitacre Jr. complained that Internet content providers were getting a free ride: "They don't have any fiber out there. They don't have any wires. . . . They use my lines for free -- and that's bull," he said. "For a Google or a Yahoo or a Vonage or anybody to expect to use these pipes for free is nuts!''

Perhaps I'm missing the point here, but aren't the end users paying for these pipes? I know I'm certainly paying enough for mine...

Re:Small question:

[gothzilla]

What was that story not so long ago about Google buying up dark fiber everywhere?

Re:Small question:

[joebagodonuts]

Yes, the users are, but the telcos want more. That seemed to be the gist of the article.
Imagine I'm AT&T. For a fee, I'll give priority to traffic to/from your website over that of competitors. The endi user get's to your site fast, and since Americans are impatient, the theory is that consumers will stop going to your competitors and go more to your site. Then your competitors pay the fee. And so on...

From an end-user standpoint, we've become accustomed to an internet that doesn't prioritize traffic. However, I don't think that will have a huge impact as the regulators determine the new rules. People will whine about this, but in the end the telcos will get what they want, the consumer will get screwed, and it will stay that way.

I look at the latest merger between AT&T and SBC and think "Wait a minute, did AT&T get broke up in the 80's? Now it's comming back toether. How does that work?"

Re:Small question:

[p00pyhead]

You are paying for bandwidth? ok. you will now pay for latency.

Re:Small question:

[arivanov]

Entertaining...

In 1998 BBN Planet had the same whinge about Exodus. It even stopped their peering with them. It did not last. Users demanded it being turned back on and it got turned back on.

Even more entertaining....

Since 1997 a large portion of the non-US Internet has been using QoS. Been there, done that myself. The world did not end from traffic being prioritised, limited and otherwise bastardised left right and center. It continues to be bastardized and this is posted across a bastardization like this. It has gone through. There were cases where idiots tried to use this otherwise beneficial tool to extract more commercial advantage out of the network or their market position. They are now all bankrupt and their assets are broken down and sold around. There is a limit to the gain possible here after which users start to leave for other ISPs.

Super entertaining....

ATT has been running diffserv for god knows how long. In fact it is the only ISP that used to state as policy that it will honour an incoming diffserve markings(dunno if they still do). It is phenomenally entertaining to observe the fact that the knowledge about this has reached a PHB somewhere up there. He should be congratulated on finally understanding some of the technology behind his network about which engineers have been speaking for the last several years.

Whatever... Move along... Nothing new here...

If they wall off content completely the users will eat their arse. If they drop it under some SLAs the content owners will once eat their arse. The reason has nothing to do with common carrier. Nearly all content providers are directly connected to Tier 1 networks in the US. There are no public peerings left. It is essentially negotiated transit and there are legally binding contracts to slap an overly inventive BellDroid across the wrists. And if a content provider does not have a good transit manager it is their fault. It is a part of doing business in the US. This is the same as running a garage without a good mechanic.

Re:Small question:

[jurgen]

Yes, we are. And what's more... we are paying for these pipes in order to get to Google and Yahoo and Vonage, and without those we'd have zero reason to give our money to AT&T. Ok, Google, etc. are standing in for content providers in general... I know that so long as there is internet porn people will be willing to pay for broadband, but that's all content. Also it's not true that the content providers don't pay... they also need Internet connectivity, and as those of us who've tried running commercial websites know that doesn't come cheap.

So what the Telcos really want is for everybody to pay... and then for them all to pay again. Who wants a free ride here?

But that's to be expected... they are corporations and as such have only one objective and that's to maximize their profits (excuse me, shareholder value). And since the government has let them rebuild their monopolies they seem to have the means to do that. Or do they?

Google for one isn't waiting for them. It's been mentioned in the news several times in the last year that Google has been buying dark fiber. So Ed is wrong... they (or some of them) /do/ have fiber out there.

I'm not worried. Yes, the Telcos have nearly rebuilt their monopoly. But it's a far weaker monopoly than it ever was in the past. There is just too much fiber in the ground, and too many alternatives out there... if someone squeezes too hard, the market WILL work. The Internet will not be hijacked by a few big corporations; it's against the interests of too many other big corporations for that to happen. :j

Re:Small question:

[mckyj57]

In a November Business Week story, AT&T Chairman Edward E. Whitacre Jr. complained that Internet content providers were getting a free ride: "They don't have any fiber out there. They don't have any wires. . . . They use my lines for free -- and that's bull," he said. "For a Google or a Yahoo or a Vonage or anybody to expect to use these pipes for free is nuts!''

Guess what, bud -- you don't have any content. So you are even.

Eminent Domain

[Billosaur]

From The Washington Post: The Republican-led Congress is struggling with the issue. On one hand, it has taken a deregulatory approach to the Internet, but on the other, it can't ignore the concerns of Google, Yahoo and eBay, some of the most successful companies of the last 10 years. These companies alone have built up businesses worth hundreds of billions of dollars on an unfettered Internet. Moreover, unfettered Internet access has come to be seen by Americans in general as not just a privilege or a product, but a right akin to free speech and free association.

It comes down to who you think is more important: companies like AT&T, BellSouth, etc. that provide a connection to the Internet, or Google, Yahoo, etc. that provide the content that cause people to want to have an Internet connection in the first place.

Personally, I think this is sour grapes by the telecoms, because they didn't think to invest in the content side of things. Let's face it, one share of Google's stock is worth one share of each of theirs combined and then some.

If I'm Congress, I threaten to nationalize the Internet, specifically its infrastructure and connectivity. Tell them the Federal Government now owns the trunks and fiber and they can bid on a contract for maintenance of the whole thing. Thorw some billions their way as "compensation." They'll change their tune in a hurry lest the lose their steady income.

Re:Eminent Domain

[Glock27]

It comes down to who you think is more important: companies like AT&T, BellSouth, etc. that provide a connection to the Internet, or Google, Yahoo, etc. that provide the content that cause people to want to have an Internet connection in the first place.

Personally, I think this is sour grapes by the telecoms, because they didn't think to invest in the content side of things. Let's face it, one share of Google's stock is worth one share of each of theirs combined and then some.

It's not "sour grapes". It's "rampant greed". The telecoms are already (or should be if they're competent) turning a profit on the ISP side of things. They get a shiny new income stream of $40-$80 per house that signs up for DSL. That isn't peanuts, that probably averages $600 a year with a target audience of around 100 million households. That's right, if a company managed to sign up 10% of US households, it'd have around a $6 billion annual income stream.

The greedy jerks (who probably received fat government subsidies to install the infrastructure in the first place) simply see an opportunity to charge on both ends of the deal. They don't care if they wreck the Internet in the process.

This needs to be fought.

Re:Eminent Domain

[ranton]

I think it is funny that on Slashdot the government can do whatever it wants as long as it only hurts big companies. If it hurts small companies or the average person, then it is an outrage. But if a Telco or Microsoft or Amazon is hurt by unfair legislation or overabundant governmental control, it is okay or even welcomed.

Re:Eminent Domain

[Billosaur]

The thing about this 2-tiered Internet is, it hurts everyone, from comapnies to individual users. What it says is, "only those of you who play by our rules [the telcos] can get faster access, otherwise we take our toys and go home." The telecom companies created this situation and now they want to throw a tantrum because they can't profit from it (even more!). And so, not only will it hurt the big firs, but the mid-level and small firms, who will have to shell out more of their precious cash to keep up with the big guys, and in the end this "play-by-our-rules" mentality will mean that content may be altered in way we users don't like or appreciate.

Public Utility?

[Anonymous Coward]

Is the web/internet becoming a public utility? It is becoming more and more important to commerce and also is a shared resource. Up to now, telcoms have played nice. But if access becomes restricted and privatized, so that only a few players can afford fast and efficient access, that has the potential of destroying the utility of the internet. Barriers to entry will arise and the internet and web could stagnate. Should it be regulated as a utility, with safeguards to insure entry into the commons? Is this even possible?

Next: exploit their loss of common carrier status

[Rude Turnip]

I have already paid for an IP address at a given speed. Anything that screws around with any of my third party dealings (ie Google, Yahoo, eBay, etc.) is theft of service, IMO.

If something like this goes through, these greedy bastards should lose their common carrier status since they are controlling the types of traffic going through their networks. I, for one, welcome the combined forces of the RIAA, MPAA, FBI & DHS permanently shutting down any ISP that slips up even one bit and allows something illegal to go through their system.

Death!

[Glock27]

To the marketroids...

This is the stupidest idea ever and will receive the warm welcome it deserves.

It is the same idea as making TVs that receive certain stations better than others. "What do you think dear, should we get a Sony?" "No, let's get a Toshiba, I want CBS to come in clear and last year Sony made that deal with MSNBC..."

Brilliant thinking.

Capitalism will certainly fix this (non) problem.

e-Terms

[Caspian]

"Your Rights Online: The Future of e-Commerce and e-Information?"

Any time I see a word beginning with "e-", I reach for my Glock.

Ditto "iFoo" (Apple and Apple alone excepted), "MyFoo", and the like.

Re:e-Terms

[Flaming Babies]

Did you happen to purchase that Glock at this website?

You want more money?

[AviLazar]

Meanwhile, on the other side, companies like AT&T, Verizon and BellSouth are lobbying just as hard, saying that they need to find new ways to pay for the expense of building faster, better communication networks. And, they add, because these new networks will compete with those belonging to Comcast, Time Warner and oth er cable companies -- which currently have about

Here is a suggestion - offer me the same speeds U/D'l that comcast offers, at the same convenience (no I do not want to have to log-on, I want to play and play). Offer this at a cheaper price, or offer faster speeds at the same price. Offer me better service. Do these things and you will have my business - do it not, and go fuck yourselves! I use comcast, yea I pay more, but you know what - i get 3 times the speed of verizon DSL - and for a programmer/web designer that is important.

And then, with your lack of service, you dare complain you are losing out? And you think you have the right to charge the content providers? They are not the ones requesting to send their information over the net, I am going to them requesting the information...I paid already, i shouldn't have to pay again - and yes I will have to pay again as Yahoo decides to charge me for email.

Scary

[Quixote]

I don't know what is more scary: the fact that these companies are thinking along these lines, or the fact that our representatives in Congress are so clueless that they haven't done anything about it. I mean, this is a no-brainer. Any sane person would tell the Telecomms to fuck off.

Re:Americentric

[LWATCDR]

Big shock considering that you are posting on a Website created by Americans, owned by an American company, and in English. Why wouldn't Slashdot tend to be Americentric?

Selling it on the Hill

[HangingChad]

Here's how Bellsouth is trying to push their idea on the Hill:

http://msnbc.msn.com/id/10912575/

By having one of the largest lobbying efforts of any company around. So, start the PR offensive right before your coporate wine-swilling legislators step up to defend those poor, down-trodden ISP's carrying the load for those freeloading media companies.

Maybe this will be another another opportunity for Rep. Jim Sensenbrenner (R-Wis.), the great defender of the common man (if that common man happens to be a Fortune 100 company needing sweetheart legislation) to rush to the defense of his constituents.

http://www.opensecrets.org/payback/issue.asp?iss ueid=BA3&congno=109

That's basically the same approach RIAA took. Seems to be becoming the industry model. Heavy lobbying, PR push, profit!!!

Big Players Lose

[Saeed al-Sahaf]

you may one day discover that Yahoo suddenly responds much faster to your inquiries, overriding your affinity for Google.

Considering how much "dark fiber" Google owns, I suspect they saw this comming. I think it is not Google, but Yaho and MSN that might be in for problems. And, don't think that the Big Palyers in the content supply business will just sit by and take this, they have a lot to lose...

Nope. Ma and Pa have to get with the program.

[ScentCone]

This seams to me that it is the internet's version of "buying real estate". Ma-and-Pa stores already have to do it, why not internet companies?

Because it's not the same type of business. If Ma and Pa want to enjoy more sales to people all over the country/world, then they can also register a domain name at GoDaddy for a few dollars, find some $10/month hosting, and have their grandkid create a web site.

Oops! Apparently running a real business on line includes paying professional content people, paying for real hosting, marketing, shipping, warehousing, fraud management, numerous returns, correspondence and phone calls 24x7, language barriers, and enormous competition. You make it sound like the person with the walk-up store is the only one that has competition or overhead.

Further, if Ma and Pa actually do rent out a store on the side of a busy road, they've got something that no Amazon or eBay or any large e-tailer can provided: instant convenience and fulfillment of physical wares.

Did you have the same concerns when mail order catalogs really started to hit it big 15, 20 years ago? It's no different, except that a small retailer doesn't have to commit to a huge printing/postage expense to get a web site out in front of millions of people. Ma and Pa should get online, or Ma and Pa should fine-tune their business around the things that make walking physically into a store preferable over looking at digital pictures, paying for freight, waiting for delivery, and possibly being disappointed with the purchase. Oh: and you don't really think that online stores don't have to pay taxes, do you? The larger retailers have business presences in multiple states, and collect/remit sales tax in every one of them.

If Ma and Pa are worried that someone in their own state might turn to an out-of-state online store to buy something, tax-free, and have it shipped into Ma and Pa's home turf, then they have to remember that they could be putting up their own dot-com, and shipping to that same in-state person for next day delivery by simple ground service. Localized marketing of a web stores is easier than it's ever been (thanks, Google), so there's really no excuse. If a direct competitor of Ma and Pa's moved in right across the street, they'd have to spend money, change what they're doing, and innovate in order to compete and stay afloat. This is no different.

Of course, none of this is what the referenced article is actually about (favored connection speed for favored deal makers), but I couldn't let your comment go without making some points.

Re:Next: exploit their loss of common carrier stat

[kingpin2k]

Parent is exactly right. The ISP's can't be responsible for only part of their traffic (ie ensuring speedy Google delivery). If they go down this path, ALL traffic is their responsibility. It's nuts that they would even get close to this issue. Part of me wants them to succeed just for the sick legal (read: civil litigation) ramifications to kick in.

Countermeasures to 2-teir

[G4from128k]

I can see several countermeasures to this development. The key is that the site owner can tell which ISP is stifling the traffic or extorting extra speed payments and change elements of their site to reflect that ISP's unpleasant behavior. For any traffic coming from a Bell South or other 2-tier "badISP" customer:

1. Publish BadISP's tech support numbers: "If you are having trouble with this site call 1-800-BadISP" -- at about $5-$10 per call, the telco would soon see the folly of its ways.
   
2. Publicize BadISPs performance issues: "This site optimized for BadISP competitors" and provide links to non-2-tier competitors.
   
3. Post higher prices for BadISP customers: iTunes for $1.09 per song to BadISP customers to pay for "faster" service.
   

Creating a 2-tier internet is hardly anonymous and site owner can easily inform end-users of misbehavior.

Middle Ages of the Internet

[the eric conspiracy]

This reminds me of stories from the middle ages when local robber barons set up their own tolls on local roads as sort of a protection racket. The ultimate solution was to have government take over and run the roads. I wonder if that is where this will lead.

Their real target is VOIP

[Maclir]

The cash cow for telcos is not being an ISP. The cash cow is long distance phone charges. And given that "long distance" can be as close as 10 miles....

But VOIP will kill that cow stone dead. And the telcos want to make sure that won't happen.

Re:Americentric

[PhoenixFlare]

Americentric

A story on an American-run website writen by an American paper about American companies lobbying the American government....Imagine that!

Telcos Risking Irrelevance?

[amelith]

Nothing much new here it's typical telco thinking. The're used to running large and hugely complex networks (e.g. GSM) with tightly controlled and metered access.

If operators had designed the Internet then searching would be a network function controlled by the them and the concept of multiple search engines would seem strange. But then so woulld using the Internet as the terrifying usage charges would have stalled it way back. Adding a service to the network would take a committee of committees several years (e.g. MMS messaging).

If they don't understand that bandwidth is now a commodity then they could be in for a few serious shocks, unless they can buy the necessary laws to keep out small local competition (they already have in some countries).

There's still money to be made by Telcos as running reliable networks isn't a doddle. I don't think it lies in blackmailing those who build the services that make Internet access desirable in the first place.

Ame

Who are these people and can we kill them?

[namespan]

Seriously. These guys are basically the same level of morality and worth to society as Spammers -- looking for an easy way to make an extra buck at the expense of the total experience.

And if we can't murder them and have their arms and legs mailed back to their families by the powers of darkness, maybe it's time to make a pact among geeks that THEIR email and internet traffic should always run an order or magnitude more slowly.

RICO Laws

[TwP]

How is this not racketeering?

Telco: Have we got a deal for!
WebSite: Let's hear it.
Telco: If you pay us $X per month, we won't limit our customers access to your website.
WebSite: <sarcasm>Wow! That sounds like a great deal</sarcasm>

Now, imagine this with the mafia and a Small Business Owner (SBO)

Mafia: Have we got a deal for you!
SBO: Let's here it.
Mafia: If you pay us $X per month, we won't break your customer's knees with a baseball bat.
SBO: <sarcasm>Wow! That sounds like a great deal</sarcasm>

Whoosh. SMACK! (knees crack) AAAaaauughhh!

Anywho, that's just my simplified version of reality, but it does make sense. Telcos and the cable companies dipped their toes into blocking ports (TCP-25 anyone?) in the name of preventing spam. They're already performing traffic shaping so they can make more money on "business" accounts (more bandwithd for more money). I guess they feel they can now work this same scenario from the other end since they have met so little resistance in the two previous cases.

Have we dug our own grave with this one by not pipping up earlier? Is silence in the previous cases the same as conset. The telcos and cable companies seem to think so.

Been there done that

[rickb928]

Haven't we done this before? Wasn't it called AOL?

Seriously, I say let the telcos do what they want. Just don't call it Internet service.

Cause it ain't.

rick