One of the chief issues before consumers right now is the desire of the Bells to charge content providers for access to “their” customers.
Telecom law attorney W. Scott McCullough of Austin, Texas sets that straight below:
The answer is that the physical layer customer – the “end user” or “consumer” – has paid for the bandwidth. When that customer Googles and sucks down information (whether text, images, audio or video) the customer is using the service that was bought. Google does not become the physical layer provider’s customer. Indeed, I would argue that if there is a customer/provider relationship between Google and the physical layer provider the better argument is that Google is providing a service to the physical layer provider by supporting the needs of the physical layer provider’s end use customer who has bought Internet access and the features, functions and applications on it – including those at Google. The “cost causer” is not Google but is instead the end use customer that is Googling.
I get on the road and go through a tollway. I pay the toll to be able to go to the store. The store does not pay the owner of the toll road merely because I used the toll road to get to the store.
Similarly, I don’t pay extra if I pick a store the toll road owner does not own or control or have some deal with to get “special handling.” (Think how inefficient it would be if the tollways were “improved” so has to replace the “High Occupancy Vehicles only” lane with a “K-Mart customers only” lane.)
The entire notion of charging “content” providers is backwards and
is merely a way to hide what is ultimately a surcharge to the end use
customer since the “content providers” will have to pass on the cost.
If the ILECs and cablecos want to collect a surcharge for “special
handling” then they should be required to get it from the user of their
services: the end use customer. That would make the fact these folks
are charging monopoly rents very evident and would be more likely to
lead to others being able to actually compete at the physical layer
(either using their own media or on some basis like UNEs) since the
consumers would tire of the extra charges fairly quickly.
In the carrier world we are supposed to be eliminating the hidden
cross-subsidies embedded in telephone rates. Been doing this since
1976, and the same bad ideas keep coming back around with new and
different and glitzy names that hide the true intent and result and
reverse painstaking gains made over years of competitive effort.
Hush-a-phone led to protective connecting interfaces, which led to
antitrust action. MCI lead to access charges and then divestiture,
which in turn lead to the 96 Act which was then used to return to the
pre-Hush-a-phone days (Think about it: will the ILECs or cablecos let
you use your own terminal device [“modem”/set top]??; the divestitures
are rapidly being undone and we are seeing more and more horizontal and
vertical integration with control moving rapidly up the stack.) Charges
to “content providers” are ultimately just a new kind of
anticompetitive and hidden cross-subsidy that will prop up the Belz and
cablecos for yet another few years until they inevitably overreach to
the point the public revolts and we go around full circle and start all
over again.
