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?

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.

Do google pay for bandwidth?

I know some organizations essentially dodge bandwidth charges by running their own connection to major peer points.

The bbc [bbc.co.uk] 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.

Re:Do google pay for bandwidth?

No, typically no money changes hands at peering points. Peering is the mutual agreement between two networks to share traffic. Typically this is because the the two networks believe that they will exchange traffic on more or less equal levels (in the case of ISP peering) or one of the networks wants easy access to something the other network has (as is the case with content providers such as the BBC peering with an ISP, the ISP's subscribers get access to the BBC content without having to go through transit routes that the ISP has to pay for).

Re:Do google pay for bandwidth?

No, typically no money changes hands at peering points.

But this is a contractural problem, not a legal problem. If Google peers with Verizon don't charge Google then that's their own fault for writing the contract in that way. They could write a contract requiring Google to pay for the peering (and Google has every right to refuse to sign the contract and thus the traffic will be transited through another network instead of peered directly).

However, the ISPs are pushing for _legislation_ rather than just changing their peering contracts. The implication is that they want to be able to charge content providers who they aren't peering with (and thus have no contract with). I.e. if Google is connected to an ISP called "foo" and Verizon is connected to "foo" then "foo" can route the traffic between Google and Verizon - there is no contract between Google and Verizon and each of them is paying "foo" for a transit agreement to route the traffic. In this case, Verizon's _customers_ are paying for Verizon's transit agreement with "foo", but Verizon wants to be able to charge Google too. This seems wholley unfair since Google is having to pay for it's transit agreement with "foo" too.

This is just another example of bad laws being pushed so that greedy corporations can charge parties they don't have contracts with without losing their common carrier status. (At the moment Verizon could block Google's traffic and require Google to sign a contract in order for them to carry it, but that would prevent Verizon from being considered a common carrier since they would be censoring content).

Re:Do google pay for bandwidth?

since they would be censoring content

This phrase struck me as particularly poigniant (sp?). Up until now I had simply been infuriated by the assumption that Google and I got internet access for free. Hell, my fees are around $50/month, and I'm sure Google's fees are in the tens of thousands a month. Some free lunch.

But it hadn't really struck me yet that this was censorship wrapped in greed. A company wants more money for nothing, and therefor plans to limit my access to information as a way to basically extort money from other companies.

It really boils down to the one that suffers is the home user. Google can pony up, but may not out of protest. But when all this bullshit about free lunch and Verizon being wronged is taken away, I suffer. My access to information - already a very shaky balance - is threatened, and appears that such censorship will even be made law by our wonderful government.

I've got to stop reading Slashdot. These days, it just gets my blood-pressure up.

Re:Do google pay for bandwidth?

That doesn't mean it's free really. That means that both networks charge to connect to them and so when they connect to each other they cancel out the charges. If the tele companies are giving Google free peer status and they don't think it's a benefit to them then it's just stupid of them. Will they lose business if the network down the street has better access to Google than them? Very likely so if it's a noticable difference. Is it enough of a loss if that happens to justify not giving Google a break on the peering? Probably not. Bandwidth should be pretty cheap for the people that own the network - it costs almost as much to have the lines going unused as to have them in use. I'd imagine that most of the traffic between Google and others, through their network, is to somebody that is in some way their customer so they are making money by having Google there.

As you said they are sort of being their own ISP and also they are providing a value to their peer network.

Re:Do google pay for bandwidth?

This is exactly why the telcos are (to me) being seen as greedy f'n bastards. They're already getting payment from me (and their other customers) to utilize their bandwidth. Now they apparently want to double-dip and charge the party at the far end to send packets of data to the telco's paying customer. Essentially, in POTS terms, they want both the caller and the callee to pay for the same conversation.

Google pays for the bandwidth they use from their provider. I, as a broadband connected citizen, pay for the bandwidth I use to connect to Google. Essentially, the telcos are already getting paid twice - once to accept the packet and again to deliver it to it's destination.

There is *NO* reason why additional charges should be allowed. It's lunacy to think that this could be allowed to happen. Cost of access can do nothing but go up, which will further widen the gap between those that can afford to be online and those that cannot.

If the telcos aren't happy with how much they're paid to have data travel across their network, then they should re-address their pricing structure with their customers directly.

Knowing what a price increase would mean to the number of customers they'd retain, the safer alternative is clear - charge the companies that their users want data from.

Free lunch?! Ha! They've kept their lunch safe and now they're asking for the $50/plate buffet. Greedy f'n bastards...

Re:Do google pay for bandwidth?

Google could come back and say "Hey verizon, since you're building an ISP business based on OUR investments, how about if YOU pay US money to provide better service to Verizon customers?"

It could go both ways...

Re:Do google pay for bandwidth?

Think so? If the Telcos played hardball and Google refused to pay, then struck a deal with the cable companies for exclusive access, who do you think would win? I could flip a coin over DSL or cable at this point, but if only one of them had Google services (and Google could blame the telcos and their extra network charges for that) then I (and everyone I know) would be on cable in a minute.

ISP service is now a commodity, their differentiation is so minimal. Content is the key.

Plus, if Google actually builds their own backbone as many have rumored, people will be paying THEM just to peer.

Re:Do google pay for bandwidth?

Google has more to lose by the Bell's blocking them, than the Bell's have to lose by blocking google.

The commentators all say that Google has been buying shedloads of dark fibre. If this is so, does Google have anything to lose in this fight? By this time next year, could we see Google as the main backbone supplier in the US, and the Bells all whimpering a corner, saying 'please, sir, we didn't mean it'?

End of the Internet?

Google could come back and say "Hey verizon, since you're building an ISP business based on OUR investments, how about if YOU pay US money to provide better service to Verizon customers?"

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).

Nahhh

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.

Re:Do google pay for bandwidth?

I console myself, given the climate in this crazy world, with knowing that someone crazier than me will start capping Telco Higher-ups in the back of the head if net access becomes unreasonably expensive as a result of these bastard demands.

You're getting paid already, fuckers. Don't get too greedy. There's a lot of really smart people out there that you REALLY don't want to piss off. Remember the Unibomber?

Think of a guy like the Unibomber that DOESN'T hate technology. I guarantee there'se someone out there like that who will be looking for Executives of companies that try to fuck the net for their own personal gain.

Just something that worries me based on my studies of those types when I was in college.

Smart people with a beef scare the shit out of me.

Re:Do google pay for bandwidth?

Actually I think this is an intresting case. If this holds true then can telcos attain compensation for business calls as well. If I call my friend to say hi should I be charged a diffrent rate then if I make a profitable business arangement? Should top execs be charged a premium just to use a network? And if any of this holds true by what means could they be allowed to attain assurance of the severity or amount of the charge?

Could this be a new cash cow? Imagine making even 1% on a company like IBM, HP or GE for each multi-million dollar deal made through means of telecomunication(pots, IP, cell,...).

This could either create new accepted business methods or bring each company into the telecom game by buying a part of, or the whole "wire".

Re:Do google pay for bandwidth?

Well, you see: Mr. Bronfman (also known as the 25Watt bulb of the entertainment industry) believes that he should get a cut on every IPod sold. So I can understand where Verizons inspiration is coming from.

Re:Do google pay for bandwidth?

Looks like a new and novel application of the word 'dodge'. Let's take it for a spin:

I dodged taxi fare by buying a car.

I dodged restaraunt bills by cooking my meals.

I dodged cleaning bills by doing laundry

No, sorry, not working for me.

Re:Free Lunch?

I hate to imagine what their bandwidth expenses are. I can chug through $100 of bandwidth a day sometimes (at $.50/GB) and i just run a few small websites. I'd be shocked if Google isn't moving hundreds of TB's of bandwidth a day at least. Their bandwidth and electrical fees must be unbelivable.

And I certainly am paying for Internet access. For home, office, and mobile access I spend a couple hundred dollars a month. All so I can use ssh and a web browser and expect to get shitty service. When they offer me gigabit DSL to my home and office (not to mention servers) then we'll talk about raising the prices.

With the shitty connections we get here in the US they should be glad we're willing to pay at all. Some third world countries have better net access. Pitiful.

Re:Free Lunch?

I think it started with Google starting to buy up their own fiber and tinker with providing a phone service. Google became competition for the telcos and they should be blind scared of that.

Re:Free Lunch?

Hell yes I'd fuck off my telco in a split second to use GoogleNet/VoIP. I'm still pissed Verizon is getting a cut of my Speakeasy OneLink connection.

Re:Free Lunch?

All Google has to do to make Verizon's incessant whining disappear for a long time is redirect every hit from a Verizon customer to Google's servers to a page explaining that Verizon is trying to extort money from them for a 24 hour period. Verizon will get so many customers leaving their service that within 24 hours, they will be BEGGING Google to unblock their network. If Google wants Verizon's internet service to go away forever, all they have to do is refuse to remove the block, and enough customers will tell Verizon to cram it that they will diminish into irrelevance in a matter of days or weeks. Verizon is banking on Google not having the guts to do it. I'm betting that if they push Google too far, they will.

As far as I'm concerned, when companies try to disrupt the Internet with veiled threats and extortion tactics, they should receive an instant Internet death sentence, i.e. blackholing their traffic until they stop acting like whiny little crybabies. The Internet works solely because each ISP pays their fair share of the bandwidth for their customers. If Verizon doesn't want their customers to have access to Google, all they have to do to cut those costs is stop paying the bill, and I can guarantee their upstream providers will stop providing the pipe.

The problem is that Verizon is among the most greedy telcos on the planet Earth. They overcharge their customers for pretty much everything, but that isn't enough, so they want to charge other ISPs' customers, too. Screw Verizon. Life is too short to put up with companies that screw over their customers to make a cheap buck.

If Google has any sense whatsoever, they'll nip this problem in the bud sooner rather than later---they'll turn Verizon's customers against them NOW while this BS can be contained, rather than waiting until other greedy ISPs decide to jump on the bandwagon and utterly destroy the Internet as we know it....

Re:Free Lunch?

and enough customers will tell Verizon to cram it that they will diminish into irrelevance in a matter of days or weeks.

I think you're overstating Google's power a tad here. Sure Verizon will lose customers, but in the end it's a lot easier to switch search engines than it is to switch ISPs. Rule #1: Never underestimate the laziness of the average American.

Also, I don't think 24 hours would be enough to get a lot of people to cancel. Sure they'll talk about cancelling while they can't search for their pr0n or the latest Britney Spears gossip, but as soon as Google flicks back on they'll forget they were ever going to cancel. Rule #2: Never overestimate the memory of the average American. (And if Google were to keep the block on longer than 24 hours, see Rule #1.)

Re:Free Lunch?

No one is forcing the telcos to expand their infrastructure

Actually, the taxpayers have already footed a large part of the bill for them to do just that.

Sadly, no one is making them follow through on it.

Re:Free Lunch?

And, last time I checked, India is still supposed to be 3rd world.

Really? The last time I checked, India was supposed to be "the placed your programming career just got outsourced to"...

Re:Free Lunch?

T-1's are a couple hundred dollars a month - OC-48s are about 1350 T-1s. Assume a big break for buying the big pipe, and that comes out to... several buttloads of cash per month.

It's rather different. To begin with, T-1s are essentially leased lines from a telco. They're pretty shitty and cost a lot more than they should.

OC-x connections are a bit different. When you get up to the level of OC-48 you're probably paying for your own fibre to be run. In google's case they're probably not paying so much for bandwidth since they have so many peering agreements. Why should they pay for bandwidth when they can just hook up a bunch of fibre to AOL's network? I hope you see where I'm going with this...

I'm not in the proper state of mind to really explain it, and I'm no expert on providers of OC-3+ connections. That's way above my damned level. But it's a whole different playing field from the shitty T-1s being offered by ISPs. A few meters of fibre and a router will dwarf the cost of something like T-1, but the price/bit ratio is much better.

All of that, and the fact that google probably pays a lot less for bandwidth than you'd think, aside, I think this's just more FUD from Verizon. I wish Google had some GHenchmen to go take care of those bastards...

Mushrooms

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.

Re:Mushrooms

I'll play..

Suppose you are an electric utility, and you have many millions of paying customers. Life is good; you're a super rich mega corporation, but you would like to make more profits (after all you owe it the shareholders) and have your sites on once again taking the throne back and becoming an honest to goodness monopoly. One day you notice that Sony is selling products that require your electricity to work, and that Sony is making a bundle. Their products absolutely rely on your electricity, and you realize that your electricity is worth more than you thought! After all Sony is getting a free lunch; forget the fact that Sonys customers are already paying for the electricity. You decide that in order for Sonys products (and by extension their customers) will have to pay another fee for the access to electricity that up until now they thought was already paid for. After all, the infrastructure needed to grow the electricity business is not cheap, and you are not interested in giving out a free lunch to anyone.

Re:Mushrooms

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.

Re:Mushrooms

I'll play along as well. Imagine all those sidewalks were in fact paid for by the government, and installed by the government, and the people of the city were actually paying for those sidewalks to be in place. On top of the fact that the customers were paying the government fee's for those sidewalks, they were also in fact paying the company directly for the sidewalks... really you could say they were paying for them twice.

To top it all off, the shops are already paying a third party for that last inch of sidewalk between their shop and the main one's... getting confused yet? Now the first company decides they should get paid not only by the government, and the people, and quite possibly the company that the shops pay for sidewalk access, but also the sidewalks themselves. I mean, after all, it costs a lot of money for the government... er... to put up those sidewalks and maintain. It's only right they get paid 4 ways for the same thing right?

If you're at all confused by this post, perhaps you now realize why we should only have informed people deciding the future of the internet, and those "informed people" best not be part of the ones who stand to profit.

Re:Mushrooms

In this case what Verizon has to realize is that all their networks become useless if there is no content on them. It's a symbiotic relationship. Google needs the networks, and the networks need Google. I don't see why one would want to impose any kind of restrictions on the other.

To win the debate, frame the debate.

This isn't about a "free lunch" or "free ride" or anything like that.

This is about Verizon realizing that providing the pipeline is a good, solid revenue stream ... but the REAL money is in controlling the bottleneck.

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.

Re:Free Lunch?

The speaker must have omitted the part about Google headquarters tapping into their next door neighbor's open wireless LAN, right? When will those people ever learn....

After 20 minutes of being on hold...

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?

Simple solution, in Google style

Just like DMCA-takedown notices that Google uses to highlight the fact that you are missing content (and additionally direct you to the content you are missing), simply put a banner on the search results for any Verizon customer that says something similar to:

Your Internet Service Provider has intentionally degraded the speed at which this page loads. If you would like your search results at full speed, please contact Verizon at 800-483-4000.

Re:Simple solution, in Google style

If morons like Verizon keep this up, it will be more like "Call GoogleNet at xxx-xxx-xxxx. Service coming to your area very soon". It looks like another example of mentally retarded accountants trying to get short term profits at the expense of reason and long term viability. Hey shareholders, sell your Verizon stock now before it isn't worth toilet paper.

Re:Simple solution, in Google style

Telcos have alot of dark fibre in the States.

Most people assume that's optical fibre...but it's actually moral fibre.

I beg your pardon..

Funny, I don't feel like a victim.

This Ain't No Free Lunch

...and here I thought Google paid for their bandwidth like everybody else.

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.

hate to tell you...

that's not mud.

Re:This Ain't No Free Lunch

...and here I thought Google paid for their bandwidth like everybody else.

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.

Re:This Ain't No Free Lunch

I'm on Verizon DSL. I'm 15 hops from www.google.com, 6 of which are within verizon's network, then into level3, then into google

Re:This Ain't No Free Lunch

You, sir (or ma'am), have captured the issue perfectly: the telcos charge a fixed rate for access to lines, and they want the freedom to jack up the rates on a case-by-case basis for those services that are enjoying enough success to be able to afford it.

They could jack up the rates for everyone, but then nobody would use their system, because most people couldn't afford it. They could leave the rates as-is, but then they have to watch the line be leveraged by successful businesses to make tons of money.

To suggest that Google, for instance, gets a "free lunch" with "cheap servers" is ignorant, and completely ignores the expense of employees, infrastructure, code, and other costs of doing business. You might just as well say that the telcos get a "free lunch" with "cheap copper wire", ignoring every other aspect of their business. It suggests that this telco representative at least is confusing companies like Google with a retro image of backyard programmers in a suburban garage -- probably intentionally.

This is not unlike the pricing model that record companies adopt; when an artist is hugely successful, they jack up the price of their CDs. The difference here is that the telcos are providing a service similar to the CD pressing companies, not the record labels -- and can you imagine how long a CD pressing company would stay in business if they tried to charge BMG Music twice as much for pressing Britney Spears CDs as they did other artists? (disclaimer: I have no idea if Britney Spears is distributed by BMG Music)

It's all about greed, pure and simple. Either the telcos will get away with it, or they won't, but don't look for "reasonable" or "appropriate" here -- it's a grab for cash, always has been, always will be.

Re:This Ain't No Free Lunch

..peering through several different networks, including "sprintlink", that presumably neither I nor Google pay any money to...

Welcome to the internet, where anyone's traffic is routed to anyone else via different networks. Seriously, do you think these "other networks" get nothing for transmitting traffic? What kind of buisness would that be? If it did not net them a profit, they would not be doing it at all. Sure, top level backbone providers generally peer with each other for free (see Level3 vs Cogent a few months ago...), but anyone smaller than that usually has to pay for bandwidth to peer based on consumption. No one is going to run a network for free. We as end users pay for our connection to the ISP. Part of that pays for the ISP's upstream connection to their provider. If that provider has another upstream provider, a part of the fees go to that as well, up until you get to the free peering agreements. If Verizon is complaining about the traffic Google is creating eating up their bandwidth, they should re-evaluate their pricing with the peers generating the traffic, not try to charge Google. The best analogy from this thread is a few replies up "If Google were in the Pie baking buisness, and used Verizon (or other carrier) to supply them with gas to cook the pies, is Verizon entitled to charge Google more than other pie bakers (or anyone else) because their pies are better than anyone else's and they happen to make a ton of money off of them?" No, they charge a set rate for what is consumed. If they arent making enough, they raise their rates. If they cant raise rates and remain competitive, tough, thats capitalism and competition.

As for relating to the reserving of bandwidth issue...Verizon can do as they like with their own bandwidth, if their customers dont approve, they can go elsewhere. However, being that there is a psudo monopolistic situation with LECs, certain customers might have no alternative, in which case Telecom regulations step in to protect the customer from price gouging and other unfair monopolistic practices. Given the recent results of the Trianual Review by the FCC, most of these protections are sadly being stripped away, and the LECs are falling back together into another AT&T, this time named SBC it would seem. One of the protections still around though, is also protection for the LEC itself for the content they might carry: "Common Carrier" status. The LEC treats all traffic the same, and as such, cannot be held liable if that traffic happens to be transmitting illeagle content, or be going places it shouldnt. If they start filtering traffic based on where it is going and charging or reducing bandwidth based on the source/destination, they stand a good chance of losing "Common Carrier" as they are now filtering specific traffic: so why couldn't they filter all traffic including Illeagle traffic...

This is specifically why I think content providers should be seperated completely from service providers. Its the same as Microsoft being both an OS company and general software company, if they control one part, they tend to use that to force the other down the customer's throats (Netscape vs IE).

Tm

Trying to ignore the obvious....

- 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... :)
~

Dear Verizon Communications

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

Don't peering agreements already cover this?

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?

No no no

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.

Re:No no no

"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.

This is ridiculous

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.

What do I pay my DSL provider for, then?

*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!

3d candle burning

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?

Bullshit Vs. Bullshit

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.

Internet Damage

Gentlemen! Set your routing tables to stun.

Verizon doesn't want to carry traffic? FINE, we can arrange that.

I'd be all for it, if

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.

why is "their" in quotes?

"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.

Next: socialization

Telcos have always been prime candidates for socialization. They're really pressing their luck pursuing this ridiculous idea.

Re:Next: socialization

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.

It's difficult to adapt to a new environment

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.

Congress mulls Internet-freedom bill

There is more info about the legislation proposed to stop this sort of thing in the article Congress mulls Internet-freedom bill [marketwatch.com]

Google should just stop serving Verizon

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.

Re:Google should just stop serving Verizon

Google should do exactly that. Issue a public "so sorry for using your wires" to verizon and start blocking all verizon addresses. Chances are within 24 hours, verizon would be offering to PAY GOOGLE to start using their wires again. Verizon is the one leaching off of the internet content providers..they get $40 (or whatever) a month to sell google et al to their customers without having to pay anything to the content providers.

The only way to successfully implement tolls

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. :(

Freeloading

Verizon are freeloading on Google's (and Yahoo's, etc) content to sell Internet connections to their subscribers.

Now wasn't that easy?

Really Easy Way to stop this nonsense...

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?

This is the problem of monopolies

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.

They don't have enough money?

The only way we are going to attract the truly huge amounts of capital needed to build out these networks is to strike down governmental entry barriers and allow providers to realize profits

What about the accusations that the U.S. telephone companies have conned the government and its tax payers out of US$200bn, and 50Mbps symmetric connections should already be available? http://blogs.siliconvalley.com/gmsv/2006/02/the_un ited_stat.html [siliconvalley.com]

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.

Do what I do, Verizon is not my ISP, ...

I could get crippled internet service from Verizon for some odd $30 a month.

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!

If Verizon wants more money from Google...

They can buy shares like anyone else.

-jcr

Not paying their fair share?

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.

Congressman alerted

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.

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=06/02/07/22 27257 [slashdot.org]

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?

I think this has more to do with VOIP

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 [ecommercetimes.com] 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

wasting my time reading this post

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.

Stock Exchanges? Brokers?

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."

Big Business' Big Grab?

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.

This has been a twenty year con by telcos

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 [muniwireless.com] Oy.

Utility companies reportedly up in arms, also

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."

Telcos Demand Cut of Proceeds from Business Calls

"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."

Here it comes...

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.

I'm sick of this

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.

What about Common Carrier?

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.

It's not just Verizon...

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.

The ISP's are getting a free lunch as well!

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?

Bring on the Socialists?

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...

Telecom and Internet is INFRASTRUCTURE...

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

Verizon does lose money - really...

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.