Friday, January 06, 2006

More Two Tiered Internets

From a subscription requiring article on the WSJ, more on the push for a two tiered Internet.

From the article:

"The phone companies envision a system whereby Internet companies would agree to pay a fee for their content to receive priority treatment as it moves across increasingly crowded networks. Those that don't pay the fee would find their transactions with Internet users -- for games, movies and software downloads, for example -- moving across networks at the normal but comparatively slower pace. Consumers could benefit through faster access to content from companies that agree to pay the fees.

"They want to charge us for the bandwidth the customer has already paid for," said Jeffrey Citron, chief executive of Vonage. Customers who already pay a premium for high-speed Internet access, he said, will end up paying even more if online services pass the new access charges to consumers. "The customer has to pay twice. That's crazy."

Smaller companies say they may not be able to afford paying for premium network access. And as the phone companies start to offer their own Internet-based content such as video and Internet-based phone services, they could gain an unfair advantage over rivals who are paying them fees to offer the same services.

The looming battle between phone companies and Internet content providers has parallels with the fight between local and long-distance phone companies of the 1990s, when upstarts sought free access to the regional phone companies' networks. Until recently, phone companies were required to treat all data sent across their high-speed networks equally and without discrimination. But last year, a Supreme Court decision cemented the FCC's authority to decide the rules for broadband Internet lines. The agency promptly deregulated Internet services, dropping rules that prevented the type of pricing plans now being proposed.

Critics of these ideas say that smaller Internet companies will be squeezed out of being able to offer their products at all. "They want to radically change the way they sell telecommunications service," said Mark Cooper, research director of the Washington-based Consumer Federation of America. "We're afraid that they're simply going to pick and choose who's going to win and lose."



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