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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.
Free lunch? It seems like it's neither free as in beer nor speech. As all /.ers know, there is no other kind of free. I'm sure Google's network bandwidth fees are neither free nor small and I know I pay for internet access. So who's getting what for free? Maybe the telecoms are using that little-knownrhetorical device called hyperbole. Or perhaps they are trying to say that companies like Google have found a moreprofitable use for bandwidth than they have and they would like apiece of the pie. A free piece of the pie.
Customer: I'm having trouble with my DSL connection. I paid for broadband access, but google.com took an hour to load and vonage.com took 3 days...
Verizon: I see that you don't have call waiting on your line. I'll go ahead and add that for you, ok? We're also running a promotion that adds no value to you but will extend your contract with us. Would you like to hear about it?
Karma: SELECT `karma` FROM `users` WHERE `userid`=138474;
Funny, I don't feel like a victim.
Google isn't getting any more of a "free lunch" than anybody else; all that makes them special is that the service they provide with the bandwidth they use is insanely popular and valuable.
Imagine for a moment that Verizon provides natural gas utilities instead of communications utilities. Google pays 'em for the gas they use to bake the big, juicy pies that everybody loves. Google makes a fortune from their pies. Is Verizon somehow due something extra because their gas was used to fire the oven?
All that Verizon can see are the nice, fat pies Google has cooling on the windowsill. This isn't about free lunch; this is about grabbing a piece of Google's pie for themselves--by crook or hook.
Obliteracy: Words with explosions
- Do the Verizon customers who access Google's content pay for their network connections?
:)
- Does Google pay their network provider(s) for the access they're using?
- Does Verzion derive an economic benefit by having access to Google's services for it's paying customers?
Therefore:
- Does Verizon believe that they're not charging their customers enough for the services the customer uses?
It has not escaped my attention that I'm reading Slashdot on a free day pass paid sponsored by Verizon...
~
Ok, can someone explain to me what the problem is? Here's how I see it. You (whoever you are, oh smart /. reader) tell me where I got it wrong.
Google has a bunch of servers in a datacenter. That datacenter is hooked up to the Internet somehow, through some ISP, probably a big one (though clearly not Verizon or they wouldn't beaking off about it so much), because if it wasn't hooked up to _someone_ it'd just be a bunch of servers in isolation and Google would be worth nothing. So, Big ISP has run fiber to Google's datacenter(s), and charges Google a fee each month to carry their data. I mean, Google doesn't get free Internet access, do they? Big ISP collects their money, based either on a 95th percentile deal or a byte count deal, depending on the contract. Big ISP doesn't live in isolation either, or they'd be called AOL. So Big ISP probably has a peering agreement with other ISPs, like, say, Verizon. So Google's traffic goes out Big ISP and over to Verizon when a Verizon customer wants it, and some company hooked up to Verizon's backbone has their data go over to Big ISP when a customer at Big ISP wants it. I've just described peering in its most simple terms, haven't I? So, don't peering agreements work such that if more data goes from Big ISP to Verizon in a month, Big ISP gives Verizon money, and if more data goes the other way, Verizon gives Big ISP money. So if Google is such a massive bandwidth hog, they are not in fact getting a free lunch, because Big ISP has to give Verizon money to meet its commitments for the peering agreement, and Big ISP turns around and collects that money from Google in their monthly fee, and if Google is costing Big ISP more every month, then they (simple economics here) charge them more money. So, my question is, what the HELL is the problem? Isn't Verizon already getting paid for Google traffic?
The companies like Verizon are already paid for their pipes. This would be like me charging someone for hosting their server and then getting upset that they're making money off my bandwidth and wanting to charge them more.
I hope this doesn't become law, otherwise this is going to hurt the entire internet in more ways than one.
*I* as a subscriber am paying a fee to use the *network* to access anything that *I* want to! If that happens to be Google, then that's *my* choice!
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.
and thus the rumors of google buying up dark fiber will rear their head again. maybe google will just obsolete the telcos, anyway. i'd pay google for fiber bandwidth, phone, and digital tv, and i'm sure i'm not alone.
Fuck you.
To endulge in the time-honored Slashdot tradition of the stretched analogy, isn't this kind of like inventing a whole new end of the candle to burn? The consumers pay for their bandwidth, the content providers pay for theirs. Where is the freeloading?
Normally these ideas make me fume with rage at their sheer evilness. This is odd. I can't actually fathom the logic of this one.
Can somebody help me out so that I can move on to righteous hatred of Verizon?
It's not like Google, Yahoo, et al are sending this data unsolicited.
The are replying to requests made by paying customers of Verizon.
And they're saying they need this to complete their FTTH buildout
in a profitable way?
Hey Verizon! Didn't you do an analysis to see if FTTH would be
profitable before you began such an ambitious program?
If you can't do it profitably, then don't do it. Don't be
disingenuous by saying that now you need Internet Portals to pony
up for some share of the buildout.
And hey, Vince Cerf! You of all people shouldn't be doing the
"imminent death of the Net predicted (film at 11)" bit. If Verizon
or others start providing "tiered access" to the Internet Portals,
paying customers will complain. Let market forces decide the
outcome.
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
Gentlemen! Set your routing tables to stun.
Verizon doesn't want to carry traffic? FINE, we can arrange that.
Fascism trolls keeping me up every night. When I starts a preachin', he HITS ME WITH HIS REICH!
I'd be all for it, if Verizon wasn't charging me $45 per month for my DSL connection. You can't eat with two spoons, folks. Either you take money from me, or you take it from content providers. When you start doing both I'm terminating my subscription so you ain't getting a dime from me ever again.
"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."
So a telcom spends enormous sums of cash laying fiber, and you have the gall to imply they don't even own the backbone. What a bunch of socialists.
Vote for Pedro
Let's have some metaphorical fun. Suppose you're a mushroom farmer. You sell your mushrooms wholesale for $1 a bushel and life is good; you're not rich but you get by. One day you notice that Mario Batali is using your mushrooms in his restaurant and on his show and making a bundle. He's selling dishes which prominently feature--no rely on--your mushrooms for far more than you thought they were worth. Do you think you have a case to extract a fee from Chef Batali? Is he getting a free lunch from your hard work or does the mushroom farmer just have business-model-envy? I encourage equally metaphorical and perhaps dubious responses.
Since this arrangment works both on the Google end and the Customer end, Verizon ends up getting paid twice for the google traffic.
However Verizon would like to be paid three times for the Google traffic. You can bet if they win that, then they'll start charging customers extra for "faster" access to google. Their accountants would be thrilled if they could charge 4 times for the same product.
Telcos have always been prime candidates for socialization. They're really pressing their luck pursuing this ridiculous idea.
Disclaimer: I used to work for a telco. A small one but a telco nevertheless.
Working for a telco is a unique experience. I learned a lot, and believe me, most of it was good. I've learned a lot, both technically and from a management POV. I had some opportunities that a small company could not afford. Even with all problems, it was a good time.
The basic problem with telcos is that they still think in terms of their cash cow service, that is voice. They still think in terms of how much the user will pay per transaction, or minute. They have a huge structure, a huge legacy that can't simply be buried or thrown out the window. They have fear of cannibalizing their own products. But worse, they don't get it, and that's not because they're not intelligent, or bad at what they do. They don't get it because most of the time, people are busy running what pays their wages, and that's the legacy services. There's little incentive inside the company to do something else, specially when it means that it could make a lot of people lose their jobs. There's little incentive for people that talks about cannibalizing revenue.
In the end, telcos are like big animals who are threatened by the changing environment. They may have a lot of power, but in the end, guess what? Evolution is inescapable. Verizon (and other big telcos) may even win this battle, and a few other ones. But in the long term, they can't win the war. Bandwidth is doomed to become cheaper and cheaper. People just want to communicate with each other, and Verizon can't control what people do. It's market at work.
There is more info about the legislation proposed to stop this sort of thing in the article Congress mulls Internet-freedom bill
Google should just stop serving Verizon.
Simple solution, Verizon thinks google is getting a service from THEM?
Google shuts them off and 24 hours later every verizon customer will think their internet connection is broken.
This has nothing to do with google/yahoo chewing up bandwith. The fiber companies are just mad other people are making more money.
If it was about eating up fiber, and thus creating the need for greater infrastructure:
They would not focus on two companies that pretty much provide a low bandwith, mostly text based, services.
They could focus on more bandwith intensive services, like maybe iTunes and other pay media services.
They would focus on file sharing networks that connect a bunch of $30 a month, or less, subscribers together that end up consuming disproportinatly large amounts of bandwith.
But instead they choose to pick on the guys consuming fairly little bandwith per use, but happen to be making a bundle of bones. At least they could come up with a less transparent argument.
are through collusion or law.
Because the first company that tries to implement internet tolls alone is going to be at a huge competitive disadvantage. So they'd all have to do it at once. But this kind of collusion is illegal.
But law isn't. :(
While you're at it, don't think of a white bear.
Verizon are freeloading on Google's (and Yahoo's, etc) content to sell Internet connections to their subscribers.
Now wasn't that easy?
"This, as lawmakers are approaching new legislation that could let telcos charge internet companies much more for the use of high speed connections."
!=
"The Senate Commerce Committee will hold a hearing today on the issue, which is known as net neutrality."
For more details:
"Vinton G. Cerf, a vice president and "chief Internet evangelist" at Google, said in an interview that his company is worried that if net neutrality protections are not enacted, the Internet's freedom could be compromised, limiting consumer choice, economic growth, technological innovation and U.S. global competitiveness."
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.
This is the problem of monopolies. Do you notice how Verizon suddenly forgot about all their damn customers that pay them $ 30 - 50 per month for internet access. I mean, they are the ones using their precious pipes. And they PAY for it. Furthermore, Google also pays to send data through the pipes. So you have pipes at each end of which there is a paying customer, Verizon is making billions off of them and at the same time they are bitching that their customers are cheating them.
But of course Verizon can pretend their customers do not exist because they are part of an oligopoly and their only "competitors" are the cable companies which are doing exactly the same thing.
Now imagine if this think happened in an actual competitive, free market industry. Imagine for example if GM starts complaining that all those people keep using "their trucks" for profit and try to extract payment from everyone that purchases a Chevy truck and uses it haul things for money. It would be ridiculous. It would laughable. And of course GM do not do that. In fact they would actually try very hard to get you to buy their truck and use it for profit without reimbursing them.
But of course GM are part of a competitive industry, while Verison are monopolists.
It is obvious now that a company that obtains a secure monopoly will use it to screw over their customers and everyone else. The big orgy of telecom mergers of the 90's should have never been allowed. But now that it has been allowed, the government or the courts should step in or bar monopolistic behaviour.
PS I hope Verizon do not succeed in making internet access more expensive (either in temrs of fees or adds) because then I will have to stop using their cell phone and they do have a pretty decent network.
I find it interesting that SBC just lowered their 3Mbps/512Kbps price to $17.99 or some price like that. But that is pathetic compared to what others in the world can get today.
/. needs a couple more mod categories..
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Instead, I pay about $60 a month for much better TOS (static IP, servers within reason, etc.), though Verizon still provides the pipe.
See, my DSL connection to Verizon's CO get's shunted onto the ATM fabric and shows up as a PVC to my ISP. They in-turn pay Verizon big $$$ for the fat pipes to whereever.
Now, Verizon charges for both the ATM PVC I use and the fat pipe my ISP uses. They get paid coming and going.
Verizon is free to charge my ISP (Blarg! in case anyone cares) whatever they want for the fat pipes and the DSL PVCs that get resold to me, at least whatever the market will bear. In fact, they price things so that, compared to their ISP service, they get more money from the likes of me. Used to be, I had to pay Verizon directly for the PVC -- "Advanced Data Services" they called it, but they found out that it was easier to sell those in bulk and let the ISP nickel and dime them out (which put more $$$ in my ISP's hands as well as reducing my overall bill).
So, what's the problem here? Verizon can price their pipes at whatever level the market will bear.
I suspect the real issue is that Verizon does not realize that it is competing against itself: their ISP division has to compete with all the other ISPs for bandwidth on it's own network. So what? They get paid either way. But, from the Verizon ISP perspective, they cry foul that so much more money is made by selling bandwidth to and through third-party ISPs and not them -- one division loses while the other division gains.
Note to Verizon: if it is more profitable to lease bandwidth to ISPs than it is to be one, get out of the ISP business!
You could've hired me.
Come to think of it, Verizon is using my yard for free. They dug a hole in my property and put their crap there without compensating me. Maybe I should dig up their wire and demand to be compensated. If extortion is going to be allowed, I can assure everyone Verizon will lose.
70% of statistics are made up.
They can buy shares like anyone else.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
This isn't about a "free lunch" or "free ride" or anything like that.
... but the REAL money is in controlling the bottleneck.
This is about Verizon realizing that providing the pipeline is a good, solid revenue stream
So, they attempt to frame the debate as "free lunch", but the reality is that they're looking for a way to get some of Google's revenues by building a bottleneck.
To Whom It May Concern:
I am a Verizon residential DSL customer. I am writing to register my anger towards the comments John Thorne, a Verizon senior vice president and deputy general counsel, made on February 6, 2006 concerning Google's alleged freeloading for gaining access to people's homes using, in part, Verizon's network.
I am your customer. I pay my Internet bill with an expectation that you will allow me to transmit and receive IP packets to and from arbitrary Internet hosts without undue concern for the nature of those communications. Of the many services I receive by using the Internet, Google's services rank highly. Google is not your customer, you do not provide these services for Google's benefit. I am your customer and pay you to provide access to Google's (among other's) services for my benefit. If you feel that you are not being adequately compensated for providing me with those services, it is I, your customer to whom you should be turning to receive extra compensation not Google.
I pay for the services I receive from Google (and other Internet content providers) not by paying my DSL bill to Verizon, but by subscribing to premium content and by viewing additional advertising content paid for by other parties. Google then uses their income from these transactions to pay for their Internet Service Providers to transmit and deliver IP packets on their behalf in order to provide their services. The Internet communications network economy functions by ISPs cooperating in order to share each other's networks in order to provide worldwide connectivity services to their customers. If you want to get paid from both ends of the table I suggest you provide end-to-end connectivity from each of your customers to each of the services your customer is interested in at a rate that is competitive with the multi-AS Internet infrastructure.
I am not just paying for the infrastructure required for me to communicate with your corporate network. I would not pay for that service. I am paying for the fact that your corporate network, which is connected to my home via DSL, is well connected to the Internet at large and provides me with a gateway to the content I desire.
I find it discouraging that I, as a customer, have a better understanding of the functioning of your business model than does your own senior vice president John Thorne. I suggest you remember who your customers are and are not.
Thank you,
John Jones
xyz@verizon.net
And
xyz@gmail.com
e-mail addresses changed to protect my inbox.
This is a term I coined (although I doubt I was the first) to describe the situation when firm A charges customer B a different price than customer C for exactly, or essentially, the same service or product. As computational power grows and tracking ability increases, we consumers will probably see more and more differential pricing. Early examples of DP are pharmaceuticals and movies. In both of these cases, generally there are very large upfront development costs followed by very low production and distribution costs. In this situation, DP is highly likely to occur. Drug costs in most other countries are lower than in the US because of a variety of reasons, but one of them is simply that drug companies can get away with it, and it is worth it for them to do so. You can even sell advanced medicines in some very poor countries so long as the distribution/production cost is low and the re-importation can be controlled through political channels.
...oh...wait...you want to regulate that?
Now, I would say that the current tussle over internet access costs is similar: With a huge upfront development cost, the large ISPs will attempt to figure out ways to change Google as much as they can, even compared to another company or several companies who might use the same amout of service. Of course, Google is a giant customer, so they have their own leverage, and the outcome will likely be a different one for them than it s for you (US consumer) buying your medication. Let freedom ring!
Perhaps Verizon should look at their business practices first. First the basically laughed at the TCA of 1996 but not opening fully their network as they other ilecs squeezed the 1st generation DSL providers out of business, their $15 per month DSL service that they lose money on and no competitor can match because that's around what they pay for dry copper, and their FIOS service for which they are losing a fortune on to try and force their competition to price match and drive themselves out of business (cable and DSL).
So the appearance is that they are intentionally driving their revenue down in a blatant anti-competive move. Then they blame an entity that's got nothing to do with it, Google, for their poor performance. That's the old game called misdirection. In some circles it's call lying.
Dear Verizon Communications,
It has come to my notice that you as a company are dissatisfied, and are complaining that content providers are unfairly stepping on the toes of bandwidth providers without sharing the profits. It has also come to my attention that you as a company are seeking ways of extircating fees from these content providers in order for them to use your network.
I would like to remind you that the bandwidth that these content providers use is being paid for. No, it's not being paid for by the likes of Google, Microsoft, or any other content provider, for that matter, but by your subscribers. That's right, subscribers. You know, those people who send you a check for $39.95 every month in exchange for their 256K downstream, 128K upstream that they use in order to get from their computer to the content provider's services. These hard working, paying customers are sending you their hard-earned money to ensure that that you give them access to the sites and the content that they want.
If you decide to cut back access for subscribers to reach the content on the public Internet that they want you will find yourself losing subscribers. Should you try to enforce disconnect fees on these subscribers, or try to enforce any other end-of-contract requirements, you will undoubtedly find yourself in court from a number of subscribers who would challenge such fees due to your failure to provide services. It could even reach the level of class-action status, which would make your position even worse.
Do consider what you're thinking about doing. Your services are already being paid for. If you don't like the profitability of the enterprise then you should get out of it, not look for ways to extort money out of others.
Sincerely,
TWX
Do not look into laser with remaining eye.
I have already quizzed my local congressman as to why I can't (a) separate landline phone service from DSL [guess who my provider is] and (b) get the local area code on a service such as Vonage. While I await the reply I sent him this. It serves as my comment on here too.
2 27257
Further to my recent letter about the Verizon/Vonage VoIP vacuum that is Muskegon, I am now presented with this:
Verizon wants to start charging Google and other major web sites for using their bandwidth!
http://yro.slashdot.org/article.pl?sid=06/02/07/2
FACT 1
------
A) Google's local service provider already gets a fat load of money from Google for their bandwidth.
B) I already pay $80 per month (see previous letter as to why it's 80 and not 30) for my internet service.
FACT 2
------
If this becomes law, what is to stop cable companies from turning around and charging HBO, Fox and ABC for the TV "bandwidth", rather than paying them for the content they provide! This in turn would put a massive hole in TV networks' accounting which would be made up with? More advertising, and less quality programming.
As the lines between internet, phone and TV
become more and more blurry, [snip/] this could set a precedent that would completely turn the TV industry upside down!
This is a ridiculous situation and needs some federal legislation to ensure it will never happen. If only to protect local [snip] service providers [/snip] and to protect the consumers.
What is Verizon doing with all their assets if they are ripping me off for $50 extra a month and also wanting to flip the directional switch on the entire information/entertainment industry?
Hey Verizon, SCO just called, they want their desperation back.
Did it ever occur to anyone that this is effectively what landlords do? Once a shop or restaurant starts to prosper they jack up the rent.
A feeling of having made the same mistake before: Deja Foobar
Voice Over IP is cutting into Verizon's and SBC's revenue from phone products. SBC already has to deal with cell phones taking away the standard landline but long distance and business voice accounts have always been their real cash cow. Losing that is what I think is really eating them, especially when you add video conferencing on top of it.
If more businesses start following the adoption of private VOIP networks like Department of Defense is doing, the telcos know they're screwed but since they can't stop the DoD, they're flexing their monopolistic leverage to blackmail content providers instead.
I'm just speculating, I could totally be on crack.
- tokengeekgrrl
that's not mud.
Eloi are stupid, throw morlocks at them!
wow! i for the first time i fell i wasted my time reading a thread (even if by vertu, it means wasting your time in a somewhat constructive way by reading slashdot) you know, usualy there is some sort of debate or something. so far its all the samething. Verizon Sucks, Google still has to pay. (totaly agree) now we just need someone to let Verizon know about it. lol.
Pure genius! Think of all of the money being made by stock brokers, stock exchanges etc. - surely Verizon will want a slice of that pie, too. Then there's all of the on-line shopping sites, eBay, gambling etc. etc.
1. Extort money from customers for using your bandwidth.
2. ???
3. Profit!
It would seem that step 2 is "Lose your customers."
Verizon gets paid by both those hosting sites and those accessing sites.
But they want to get more money for no actual effort on their part.
Their justification is that Google is getting a 'free pass' on their pipes.
The RIAA member companies get paid when customers buy iTunes music.
But they want to get paid more for no actual effort on their part.
Their justification is that Apple are selling iPods on the back of the RIAA content.
Gary's New Laws of Business:
* If your customers are happy and you're making a solid profit, look for ways to screw them to the wall so that they can leave you in droves.
* If your products are selling well and you've got nothing in the pipeline, rework the pricing structure to screw your customers over so that they can leave you in droves.
* Make everything look as though you're hard done by, and call your customers 'freeloaders', 'scum', 'thieves', 'pirates' and any other names you can think of.
* Lobby your government to make everything you do nice and legal, where previously it was unethical, illegal, immoral, bad for business and just plain dumb.
I await my honorary economics degree.
They must not be as intelligent as one would assume, of course being a profitable company, the amount they sell their connections for to companies like google is of course MORE then they have spent developing those networks, of which in the end they are still in control and will continue to profit off....
:P
Now they are geetting greedy as somsone above posted, at other people with ideas of how to make more money of that bandwidth, and want some of THEIR lunch.
*BUT* if they push a company like google in a corner, where they tell them they have to pay an outrageous cost, I could see google setting up its own lines, via means of laying them and probably more likely, purchasing them from other backbones and teleco's.
Then at that point, Verizon etc will be charging the XtimesCurrent Markup, and google will charge a rate similar to now (which is already of course proven to be profitable, or else verizon etc wouldn't be in business) and google will blow them out of the water. (ok ok, maybe such a scenario while possible isn't probable, but id' like to see it happen)
In any case, what if verizon's the only company to hop on this bandwagon. Google will just NOT use verizon. And im SURE verizon wouldn't just limit it to google but everyone. Just like they pulled with cogent, and 10% of the web couldnt route to eachother becuase of them pulling public peering for that day. Worst case scenario for them: Everyone decieds just to cut them out of the peering, everyone keeps going on with eachother in a happy world, and all verizon customers get BURNED and then switch to other isps, verizon bites the dust.(Another improbable situation, but hey were talkin')
Now, someone reply to this so I don't feel like I wasted the last 3 minutes....
They are trying to slip legislation not to get money from Google but to stop Voip which is making them into dinosaurs.
Same ploys as SCO.
They are dying and will do anything.
Have you ever calculated what we in the U.S. have actually paid for internet access in the last twenty years? I don't mean "per month". I mean, draw back, and think.
Let's go for this year. Lemme see. Guess 20 million, figure from nowhere, with broadband. Just at home. Costs 45 a month on average. 45 X 12. 540 a year, for 20 million homes. 10,800,000,000 a year. Just one year. And it's probably a lot higher; please bear with me here. I'm just making a point.
Ten billion, eleven billion. How much for the last twenty, in toto, business and residential, have we paid? Twenty? Thirty? Forty billion bucks? Keep the idea of the magnitude in mind as I add tens of billions in free money granted by federal and state and municipal governments, in tax breaks, in granted monopoly access to customers, in deregulation calulated to permit the telcos to bring fiber to the door.
HOW MUCH HAVE THEY SUCKED US FOR? A hundred billion? How about the lost opportunity costs because we've crap bandwidth for maximum profit?
And now we'll have two-three companies left after all the merging, in an easy-to-maintain price fixing circle.
Let's call it a hundred billion they've charged, with much more to come. And we've got what for connections? For how much each? How much will it take to pound home the point that the way we've gone about it has failed our people, our economy?
It would have been cheaper for the Federal government to have laid fiber to the home in an Apollo type project over the last 20 years. Private businesses are too fast, too well financed, for any sort of meaningful regulation. They pull simple stunts like placing their best lobbyist, Powell, at the head of the FCC under Bush, where he granted them their wettest wishes. He'll of course go back to work for them after he's done and become a squillionaire for his loyal efforts.
Sigh.
and then there's this: http://muniwireless.com/community/1023 Oy.
If Google offers fiber I'll switch. I've been waiting for fiber for a long LONG time now, I want at least 100mb, but I think we could do better than this, we should be able to do 500mb connection by now, just because we are Americans and to prove we can. Google, please bring us internet 2.0, we have been waiting.
Isn't just about the whole modern American business model about building bottlenecks? Not the first, but today's shining example is that Microsoft has positioned itself as the bottleneck in buying a PC. (the PC "tax"?) (single highest profit part, only part unfettered by competition) The whole patent system has been perverted to where it's no longer used by business (and run by the government) to foster innovation, and everything about creating bottlenecks and tollbooths. Look at the number of things we pay for, like music/movies, etc that are changing from pay-to-obtain to monthly intravenous money drips.
This has very little to do with bandwidth, and much more to do with Google's stock price, and Verizon's envy. (Google's market cap is greater than IBM's.)
The living have better things to do than to continue hating the dead.
Power companies have also finally awoken to the fact that Google has been getting a free ride on the power they are supplying to customers. "We've invested billions of dollars in the world's most stable electrical grid system. Without us, Google's dead."
---Technology will liberate us if it doesn't enslave us first.
Why let things get that far? Demand access to what we've already paid for. Build your own infrastructure regardless. The more you have the more robust the country is. Centralization is obsolete and dangerous.
Those Bell assholes and the cable companies are sitting on a public network built by monopoly protection grants. They are in that position again because they made a bunch of promisses they never kept. If they want to get cute, drop the monopoly protection and let companies like Google have access to the public servitude and bandwith needed to route around their damage. That would show them who's boss and make them compete for customers. The telco monopolies stopped working decades ago, if indeed they ever did work.
Friends don't help friends install M$ junk.
"Businesses have had this free ride for too long - striking lucrative business deals over the phone using our infrastructure, selling products via phone orders, and otherwise exploiting our services. It's only fair that we should get a share of that."
This space available.
Dear Verizon Customer,
We are sorry to inform you that you will no longer be able to access Google, Yahoo, eBay, Amazon, and other high-bandwidth commercial sites through your Verizon internet connection. Due to the loads that these services place on Verizon's network system, Verizon has instituted a new policy which states that high-bandwidth commercial web sites must compensate Verizon for their usage of our network. The companies listed above, and others, have elected not to do so. Therefore, we have no choice but to discontinue the availability of these and other web sites on your internet connection.
We are sorry for any inconvenience this may cause.
Sincerely,
Verizon Customer Service
------------------
Dear Verizon,
Pbbbbbtttthhhppp.
Sincerely,
A Valued Soon-To-Be Ex-Verizon Customer.
Oh man, only on Slashdot does this kind of illustration (an apt illustration, mind you) get like twelve levels of comments. Good thing I have mush room on my screen so I could read the whole thing!
Ok, now that I've ranted, I've gotta tell you what a fun guy you are, Anonymous Coward. I will spore you and move on, but the morel of the story is that if you start talking mushrooms you had better be ready for someone to truffle with you!
--
I'll be here all week. Tip your waitresses!
blah blah blah
I'm really getting sick of this "me too" stuff that's coming down from the telcos. I've got $5 that they're afraid that things like VOIP which can be run on other distribution systems (aside from telco lines) is gonna put them out of business. This just seems more of the same, almost like their trying to skim a little off the top of all the success Google gets. You don't see power companies doing this, it's pretty much the same thing.
And of course, this proposal of Verizon's is gonna end up getting costs passed onto consumers, someway or another.
Insert Sig Here
Google has the content, and the means to index it. It owns the technology to make this happen. Verizon, on the other hand, has the right to run their phone lines through lots and lots of privately owned and government owned land that isn't theirs. Even the tech that makes it possible to have the internet does not belong to Verizon; there are many other ways of connecting to Google, and Verizon can easily be replaced.
In other words, Google has something to offer, and Verizon is mostly just an administrator of something that belongs to the public. The tech that makes it possible to have the internet does not belong to Verizon; there are many other ways of connecting to Google, and Verizon can easily be replaced.
If Google goes away we're back to the days where Yahoo ruled, and it takes months to index the internet, and millions of man-hours. Unless you want bad results, of course. The other crawlers can give you those.
The point is that I think maybe I'm sick of Verizon not having to pay google to use its service. Do they really deserve a free lunch from Google?
Mod me down and I will become more powerful than you can possibly imagine!
Doesn't common carrier status still exist?
The minute they start 'bitpooling' traffic to specific hosts, they should lose their common carrier status. End of story. It's already been said a hundred times in this particular discussion that it's like the telco's trying to charge for the same thing again...it's typical telco ideology.
Even when I was a phone guy (a few years ago), I remembered that we billed by the minute to our clients, but were charged by the second. We handled 1-800 traffic on the same page...even taking the campus that makes outgoing 1-800 numbers and putting them on a different T-1 where we were given a 'payphone' tarrif for handling the traffic a different way (that paid for the T-1 and associated linecard).
If they're saying that their current infastructure can't handle this and they need the money for 'capital improvement,' I find this very blurry. When we installed a digital phone (D-Term for you NEC phreaks), we billed that specific department *up front* the cost of: the D-Term phone ($100), 1/16th of a line card ($1200 for a line card), then charged them an additional n dollars a month because of the limited upgradability of a D-Term (you couldn't assign the LENS to a spot in a different cabinet if you wanted the ability to pick up that line or see that specific status, and since the cards take up analog line space, blah blah blah). If a small college can have the insight to do this in 2000, why couldn't a major telco do it in 2006?
Maybe they're seeing this from a different way:
What happens when all of our subscribers already are subscribing to a high-speed package and we're getting the maximum amount of market saturation that we can allow? We've already laid off enough of our workforce that we can't really afford that to take one too many hits, and we (middle management/execs) don't want to lose our jobs or take a pay cut, so, let's bill them for something again! Cha-Ching!
Freakin Greedy Bastards, anyway.
I disable sigs...do you?
It's also SBC/AT&T pressing this issue. You don't hear the cable companies pressing this issue, because in most places (in the USA), they already provide the best internet connections available to the end consumer. They already have bandwidth, etc provisioned for VoIP, movies, games and the rest.
It was interesting to note, that it was mentioned during the Senate committee meeting that Verizon has spent exactly $250,000,000 since the 1996 Telecom Act to upgrade its infrastructure (it was also noted, that Verizon and the other Bells promised at that time to have us all 45 mbit MINIMUM symetrical DSL lines into the home by 2005, and were given tax-free government-funded taxpayer dollars to do it with).
Assuming Verizon has 1 million paying customers for DSL at an average price of $45 per month:
$450,000,000
Multiply that by 12 months (this is not taking into account any paychecks, taxes, fees, etc Verizon has to pay).
Now, tell me again how they aren't making hand-over-foot profits while still not keeping their promises NOR paying back the tax-free loans the government gave them (using OUR taxpayer money)?
Maybe they should try improving their infrastructure even more before they go traipsing about trying to provide VoIP and video on demand.
As it was said during the hearing, "There is plenty of bandwidth out there, if you turn on your dark fiber instead of letting it gather dust." - a reference to the telcos laying alot of fiber line willy-nilly about the countryside, but only lighting up a small fraction of it.
Senator Stevens wasn't very pleased to learn that we are 16th in the world for broadband. He was also not happy about the fact that other nations have 100 mbit access and in some cases gigabit symetrical access to the home, while we are piddling around with 45-100 mbit asymertrical tops for home users and small businesses (fiber lines, and 100 mbit is exorbitantly expensive, unless you are a small business who can pass the buck onto your paying customers). He made note of how a certain telco ISP had blocked their customers from signing up with 3rd party VoIP, by not allowing traffic to go to that company's site from their network. He was proud of the fact that under certain laws passed within the last few years, it is ILLEGAL for telcos to do that. He also implied that for telcos to drop competing VoIP services into a low QOS queue would also be to their detriment if Congress catches wind of it, due to 911 emergency issues, etc.
I will reserve judgement until I see what kind of law Congress passes in this situation, but from what I witnessed today, the telcos are not making a very strong argument in their favor, and Google and the rest of the bunch are.
@Mindless Drivel: 100% of Twitter posts ever Tweeted.
Verizon (and others) are clearly using the power-company's electricity to carry out their business. And they are basically getting a free lunch here! Clearly the power-company is entitled to receive their cut of Verizons profits, right?
Lesbian Nazi Hookers Abducted by UFOs and Forced Into Weight Loss Programs - -all next week on Town Talk.
This is the end of open information.
The internet will revert back to days where Compuserve and AOL each had their own internet (aka intranet).
Grundgesetz * 23. Mai 1949 - 30. November 2007 - http://www.vorratsdatenspeicherung.de/
Eminent Domain! Eminent Domain!
I'm already paying too much for broadband! If 'they' want to increase the cost of my lil' pipe by whacking Google, et. al., then let the gov't have at 'em!
I mean, after all, if the city can bulldoze my house to build a shopping mall, certainly the feds can take back the 'net to "...promote the general welfare, and secure the blessings of [unlimited broadband internet access] to ourselves and our posterity..."
Nope, I didn't read TFA, but I'm sure I know what Verizon THINKS they want...
I'll tell you folks roughly the same thing I told the CPUC at the public hearings about the SBC-AT&T merger:
Telecom and Internet is a part of our national infrastructure, just as surely as are our roads, the air we breathe, and the radio frequency spectrum. Do we let the construction companies that build and maintain the roads OWN the sections to which they've contributed their efforts? Do we let the corporations who lease segments of RF spectrum own them outright? Do we allow the contractors who build our NASA spacecraft and military equipment continue to own what they've built?
No, we don't; those roads, those radiowaves, those spacecraft and tanks and jets, being part of the common infrastructure and used for the common good, belong to all of us.
So why is it that we've allowed telecom companies, beginning with AT&T, to own the sections of common infrastructure which they've constructed? Shouldn't that infrastructure also be recognized as a commonly shared resource, one owned by all of us?
It's my contention that a grievous mistake was made more than thirty years ago, when AT&T was deemed a monopoly and partitioned. It was indeed a "monopoly", because the infrastructure which they helped create was a monolithic and commonly shared resource, exactly in the same fashion as is our system of roads.
The mistake that was made was allowing that resource to be privately owned in the first place. In partitioning AT&T, that shared resource was still privately owned but now by multiple corporations rather than one. What should have happened all those years ago is that AT&T should have been required to become some form of non-profit and truly public entity, perhaps a government agency or contractor - in the same vein as defense contractors - or a non-profit corporation with public oversight. It should not have been sectioned-up, along with our shared electronic resource.
I suspect the logic behind that mistake extends back even further in our history, to the time of the railroads. Rather than recognizing that the railroads would become part of the common infrastructure and funding their construction with that understanding and with public funds, we left it to greedy ambitious entrepreneurs to do it, and retain control of what they had built. We repeated that mistake again with the telegraph system, and yet again with the first telephones. As a nation, we should never have allowed this to happen.
Fast forward back to here and now, and this looming threat of these corporations - which still own the pieces of this national infrastructure - setting up the equivalent of toll booths at all the major intersections and deciding who has to pay and how much. The immediate problem isn't the root problem, it's a mere symptom of the much older problem.
We had the chance - multiple chances - decades ago to make the correct decision about the long-term ownership of our shared national telecom roadways. We made grievous errors then, in our capitalistic zeal; I see little likelihood those errors in judgement will be corrected now. They will be further compounded, unless we the true owners of that infrastructure finally revolt and take back the deed.
Mark
Would you believe that the site on which Arthur Guinness chose to build his brewery came with the right to abstract water from Dublin's mains supply, at a low flat rate?
Presumably whoever made that agreement was expecting the construction of housing tenements or something like that. Whoops.
The city got very upset when they realised what was going on. Far too much of the city's water supply was getting turned into Guinness. The brewery was indeed getting a free lunch here. It took a long struggle, both legal and on one occasion violent, before the brewery were able to secure their water supply from the city's attempts to correct their earlier error.
It eventually became clear that the conversion of Dublin's water supply into Guinness wasn't actually upsetting anybody; quite the contrary :-)
Real Daleks don't climb stairs - they level the building.
The internet will revert back to days where Compuserve and AOL each had their own internet (aka intranet).
Nope, it'll never happen. It's like the cold war. Each side has too many nukes to lob at each other, and nobody will actually make the first strike.
Look at it like this: Google and other online providers are building this huge host of services. If any telco/ISP actually tries to charge them for running services over their wire, then Google simply stops running services over their wire, blocking off that section of the network entirely. Suddenly telco/ISP's customers can't access their Gmail, can't do their google searches, etc, etc. Customers bitch furiously, and start leaving ISP in droves, to competing ISP that isn't trying to be such a bastard. ISP repents and Google provides service to that segment of the network again.
No ISP is actually going to try to charge these major service providers because the end result is simply that these service providers simply cut them off. The ISP has little or no content that people actually want to use. They'd love to be in the content game, but they have proven, time and again, that they suck at it. Customers want the same content that their friends get. If my ISP does something that impacts my access to the content I want, then I'm damn well going to switch ISPs, yeah?
Google is standing up to the freakin' government to not have to release their search stats, you think they aren't going to shoot the finger to any of these ISP who tells them to buck up for use of their line? The mere fact that Google *will* cut off an ISP is enough to keep that ISP from pulling the trigger on this sort of nonsense, at least until the ISP thinks that it really can replace all the content on teh interweb.
- Give a man a fire and he's warm for a day, but set him on fire and he's warm for the rest of his life.
How much does it cost for a wired phone in your home/apartment/office? Call it about $20/month. (I know it is more in many places, but stay with me...)
Now, a broadband connection, depending on overall throughput, may cost $100/month.
Still with me?
OK - How many voice conversations can be supported over that broadband connection? More than 5? More than 10? More than 100? Anything over 5 means the provider is losing money. If someone cancels their wired phone and uses a broadband connection, the provider loses that revenue. Now, a single customer might not be too bad, the company may be providing the high-speed connection. However, it is still less revenue than there would have been.
Now, we throw in a company that sets up in your neighborhood and offers you VoIP services over their broadband connection, so you don't need to keep your wired phone. If 10 people in the neighborhood do that, then the telecomm is 'losing' money. They have less revenue than before, and less profits, they have 1 new customer paying $100 for the broadband connection, but have lost 10 people paying $20, for a "loss" of $100.
Take it to the extreme, and have someone like Google provide phone service to anyone with an Internet connection. Imagine every person in the US cancels their regular phone service to use Google's service. The telecomms go bankrupt, or they have to increase the price of broadband by orders of magnitude. Yes, the company's may be bloated. Yes, tax dollars may have paid for the telecomm to run fiber. However, this was done so services could be fairly offered to everyone. Could my town of 800 have afforded to run fiber 30 miles to the nearest city? No. However, they can pay enough for service that it is profitable to maintain and manage that connection. It is the same with roads. Some roads use federal or state dollars to get paved. They may only connect 30 or 40 people, but that's the way things are. If we didn't do it this way, there would be extensive roads around cities, connected only by the Interstates. OK, I'm kind of off-topic now...
Anyway, the current market prices are because the revenue stream assumes that there will be wired home users paying more than their bandwidth is worth, as compared to a broadband Internet connection. If they lose those customers, it means that the cost for Internet bandwidth will rise - dramatically. So, they would rather have a company providing those services pay more, rather than having the cost pass on to all of their users.
Reading code is like reading the dictionary - you have to read half of it before you can go back and understand it.
I pay for an internet portal. I used to use QWest, but have gone to Comcast. Either eay, I am paying $45 to access the internet.
Google is paying for their internet access as well. They are using something along the lines of T3, DS3, or OC3 connection(s) which also cost money. Both Telco and Cable companies are using the lines for dual access, one for POTS lines and DSL the other for Cable TV and Internet.
I don't pay for Cable TV as I have satellite, but I don't/can't use Satellite Internet. I don't have a POTS line because I have VoIP, and I don't use DSL.
I know the telco is worried about their $$, but they should provide internet service and VoIP and skip the POTS crap. Even if someone doesn't use the DSL connection, it wouldn't hurt the Telco to charge the $30 a month for VoIP just like they do for POTS. They simply wouldn't give you a DSL Modem, only a VoIP modem.
Either that, or cable providers who offer internet need to support highter bandwidth, like the DS3 and OC3 and higher...then we could cut Verizon and QWest (etc) out of the internet portal picture...
They complain about a free lunch, but as far as I can tell, everyone is paying for their access and usage of the phone lines...just because VoIP and other services directly come into conflict with what Verizon and QWest provide, shouldn't make any difference...the internet is one large marketplace... If they limit or restrict access, then they will be engaging in unfair business practices, or forcing alternatives to their service, which will further bomb their bottom line.
--E--
This is an interesting issue in DC at the moment. The house is ready to move already on this issue, and will give the telcos everything they want (and the cable guys get what they want too). The senate is moving more slowly, luckily. The main concern seems to be ultimately do property rights of network owners trump the economic growth of the edge entities. Common carriage isn't the issue here because the Internet is not common carriage (as a term of art) but neutral to the content that travels on it (as a design element). This point was rather well made by Vint Cerf at the hearings. The other really interesting speaker was Internet2 CEO Gary Bachula - his statement that effectively undercut the "network management" argument was "we have most cheaply solved the packet prioritization issues by simply increasing the bandwidth, rather than prioritizing packets" - the fact that the network owners are trying to prioritize packets at greater expense than simply increasing the overall available bandwidth to everone is exactly the point: the creation of scarcity is the key to profit. It is in the network owner's interests to compete on price on the bottom end of the "bandwidth spectrum" to gain customers then charge content providers to access "their" customers. Competing with each other on increasingly fast bandwidth is as profitable for network owners as the digital camera market is for manufacturers - namely not at all. What we will see in the absence of real net neutrality rules is increasingly long broadband contracts with very low teaser rates (AT&T now offers 12.95 for the first three months) then an increase in monopolistic rent extraction from content providers. We'll end up seeing something that looks like Google's adwords strategy which is "we'll let anyone get priority access to our customers, but it will go to the highest bidder" The only problem with that is that it's bad for the economy when it applies to all possible content rather than the subsection of content that's sold through one of many redundant marketplaces.