Thursday, February 02, 2006

AT&T Jumps In On Extortion Games

To extort is "to obtain from a person by force, intimidation, or undue or illegal power" according to Merriam-Webster. While mainly used as a term for organized crime, communications providers have been ramping up their lobbying power to get the government's approval for charging content providers extra for the privilege of using their infrastructure. AT&T latest efforts are detailed in this Financial Times article: AT&T chief warns on internet costs.

Great, more fake rhetoric about ROI and who bears the costs. Let's be frank: telcos who think they shouldn't pay for their own infrastructure maintenance and upgrades should not be in business. This entire debate is ridiculous when you consider that these ISPs don't just charge end users for DSL or cable. Content providers also pay hefty rates for serving content in terms of T1, T3, and higher bandwidth. Google, Yahoo, and others don't just serve their webpages free over AT&T's pipes. Much of their business expenses include capital investments in server farms and connectivity.

If AT&T can't profitably maintain their network, they have every right to raise their rates for customers (whether they be the DSL or DS3 type) - any new fees are analogous to power companies getting a percentage of Dell's computer sales since you could argue that Dell is getting a free ride using all this electricity to make their hardware functional.

Plain and simple, ISPs are lobbying the US government for no other reason than to line their pockets. What's next, charge me for having this blog?

No comments: