Wednesday, March 08, 2006

End of the Internet (as we know it)

Sporting its newly acquired AT&T brand (AT&T as we knew it after the 1984 divestiture no longer exists), SBC on Monday announced its $67 billion takeover of BellSouth, uniting for the first time in 22 years four of the original seven "Baby Bells". The usual bravado hit the headlines, "317,000 employees", "71 million local landline customers", "54 million cell customers", "largest merger in telecom history" and so on. Then the familiar drivel about benefits to customers, efficiencies, synergies, more and better services, discounts for bundled services, etc. (Forgive my cynicism but I've lived it from the inside). Finally the outcry from consumers' groups about the lack of competition, higher prices and so forth.

Everyone missed the real story, at least everyone until the New York Times caught it today in an editorial. The biggest impact this merger is likely to have is to bring about is their ability to use a quasi-monopoly position to change internet usage as we know it.

The internet has evolved into a service that we use much as we use local phone service: unlimited use. This plus the proliferation of broadband connections has spawned an explosion of ways we use the service, from shopping, to music and video downloading, to podcasting, to blogging, to VOIP (internet phone service). There is no usage barrier as with long distance telephone or cell minutes, so we surf at will with no self-imposed usage restraints. Because of this eCompanies have thrived and spawned new industries and commerce, such as, Vonage, eBay, and iTunes. And companies have the ability to compete with each other for our business on a level playing field.

But if a single telecom concern could control a significant part of the infrastructure (not the end user ISP part, but the highway "pipes" that are the backbone of the internet) they could dictate what businesses get the express lanes to their sites, and what ones get the stop and go lanes, depending on how well the business pays for the access, called "tiered" access. Plus, ISPs could be forced to regulate volume even within a controlled bandwidth, forcing users to regulate their "online" time (as many sites "refresh" on a regular basis, causing a potential usage meter to advance, both business and consumer broadband customers would log off between needed sessions). This would be like charging shoppers for every minute they spent in a shopping mall, regardless of purchase. Get 'em addicted to the free drug, then start charging.

This isn't necessarily an evil thing, but could dramatically alter the future of the internet, and its long term success.

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