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Verizon Threatens Google's 'Free Lunch'
ILikeRed writes to tell us the Washington Post is reporting that Verizon is becoming much more vocal about internet firms using "their" lines to do business without paying extra. From the article: "The network builders are spending a fortune constructing and maintaining the networks that Google intends to ride on with nothing but cheap servers," Thorne told a conference marking the 10th anniversary of the Telecommunications Act of 1996. "It is enjoying a free lunch that should, by any rational account, be the lunch of the facilities providers." This, as lawmakers are approaching new legislation that could let telcos charge internet companies much more for the use of high speed connections.
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I know some organizations essentially dodge bandwidth charges by running their own connection to major peer points.
The bbc certainly use that approach in the UK to keep their costs affordable.
However in that case, then they are doing part of the ISPs job so it seems fair.
More likely than not, Google and Verizon are peering with one another via a private line (which Verizon as a LEC would purchase for exactly $0). I seriously doubt either of them purchase transit via a third party. If anyone on Verizon could do a traceroute to google.com, that would shed some light.
Verizon's probably worried that Google's on-demand video is going to usurp their own offering to their customers and that all the hard-earned cash they're putting into HDSL and video delivery systems is going to go to waste. If I can watch such-and-such on Google for $5, then why would I buy it from Verizon for $10? Google will likely follow Microsoft's lead here and price gouge, being they already have a superior delivery infrastructure that can service customers on all networks while Verizon's market is just their own.
All the content providers have to do is charge a "Bandwidth Recovery Fee" to any provider who charges them a "Bandwidth Usage Fee".
For example, BellSouth and Verizon (the two biggies on this one so far) start charging Google for the "right" to provide content to their customers. In return, Google begins charging BellSouth and Verizon for the "right" for their users to access Google's service over Google's upstream bandwidth.
The end result is that Google breaks even (because they can charge a small amount per customer for a massive total income) or pulls ahead on the deal, and Verizon either stays at the same spot they're in now, or they start losing money - either through losing access to one of the premier search engines on the internet, causing customers to start leaving in droves, or because they pass the "Bandwidth Recovery Fee" onto their consumers, causing everyone's bills to inflate noticeably, also causing customers to leave in droves for cheaper access to the same content.
And while the above article mentions cable and telephone network providers, I've yet to hear Comcast, Cox, Charter, or Time-Warner start making noises in this direction. Mayhap the telcos need to look into cheaper ways to bring all the dark fiber out there online?
You thought that this sig was what you think that I thought you wanted me to think. I think.
"Their accountants would be thrilled if they could charge 4 times for the same product."
I'm an accountant, you insensitive clod!
No way in hell the accountants will be happy when they have to track additional revenue streams with a less than adequate increase in resources (as happens with big companies constantly). It's the shareholders, and the executives with lucrative bonuses written into their contracts, who would be happy to see this. It's not gonna make one iota of a difference to their accountants.
Please don't associate accountants with corporate greed... we measure the wealth, we don't take it home with us.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
I'll play along too. =) Let's say a major corporation owns major streets in a variety of shopping districts in a variety of cities. Then they send out advertising to various shops, telling them of the opportunity to pay a fee and in return the corporation will go dig up the sidewalk in front of competing shops. Hell, they'll dig up the entire sidewalk except in front of yours and even provide teleportation services to customers of your shop. Of course, your competition can avoid all this if they pay the same fees.
This bears striking similarities to a small enterprise I observed when I lived in an Italian neighborhood in New York during the late 70's/early 80's. There was a social club on the block, and the wise guys maintained an armed presence in the neighborhood 24x7. This made our neighborhood very very safe, which helped local businesses. No burglaries in over 20 years we used to brag. One time there was an attempted burglary. When the cops finally showed up 90 minutes later, the wise guys from the social club handed him over, bloody from head to toe. Poor skel apparently fell down the stairs while trying to escape. Anyway, this enterprise was financed by the shopkeepers in the neighborhood. To avoid having their windows broken every 3 weeks, they would pay a small stipend to the social club.
It's funny, what the social club was doing could have gotten them prosecuted under RICO statutes. Actually, I'm pretty sure even conspiring to do what they were doing is probably illegal under those laws, but IANAL.
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Considering the area and the number of people ot serves, the USPS is a damn fine intituion.
Same thing for the roads. I've never had a problem with the dmv. In fact the service I hve always got has been courtious and prompt.
I am not saying telcos should be socialized or not, just pointing out that the perseption of government programs is very often an incorrect one.
The Kruger Dunning explains most post on