TELECOM Digest OnLine - Sorted: Web Traffic Jams Bring Fight Over Fast-Lane Fees

Web Traffic Jams Bring Fight Over Fast-Lane Fees

Paul Davidson (
Tue, 7 Feb 2006 16:34:48 -0600

Web traffic jams bring fight over fast-lane fees
By Paul Davidson, USA TODAYTue Feb 7, 7:18 AM ET

The Internet isn't always the smoothest information highway. Bottlenecks are
increasing as more consumers use bandwidth-intensive applications, such as
video, over broadband lines.

When bottlenecks happen, videos may download more slowly. Live webcasts
freeze up. Calls on Internet-based phone services break up a bit.

To address the problem, BellSouth and AT&T, formerly SBC, plan to offer Web
content providers new fee-based services that would assure speedy delivery
of movies, games and other offerings over DSL broadband lines. Verizon is
also considering enhanced services but has been vague about its plans.

Yet Web stalwarts such as Google and Amazon say the strategy would turn the
equal-opportunity Internet into a two-tiered market. One for phone
companies, which are offering video services themselves, and their paying
partners; another for websites that refuse to pay up. They also fear that
while cable companies have not discussed similar plans, they would follow

"Once they decide what's normal and what's fast, (phone companies) are
gatekeepers," says Mark Cooper of the Consumer Federation of America.

The phone companies say they simply want to recoup their multibillion-dollar
investments in new broadband lines, better manage an increasingly congested
network and hold down consumer prices.

The debate has become the most heated battle in telecom and takes center
stage at a Senate Commerce Committee hearing Tuesday. Lawmakers are
considering new laws to ensure consumer access to websites.

The controversy is rooted in two trends. On the one hand, phone companies
are beefing up their networks with fiber-optic lines so they can compete
with cable providers. They're rolling out TV services, including
video-on-demand, as part of a bundle that includes phone and turbocharged
high-speed Internet services.

At the same time, more video offerings are coming to the Web. Google last
month started selling reruns of TV shows and National Basketball Association
games. ITunes, NBC Universal and AOL also plan to sell or stream TV

Eventually, the distinction between traditional TV and online video could
blur as subscribers watch more programs on demand and new technology
delivers Internet content to TV screens.

The emerging competition raises the fear that phone companies could block
access to rivals' websites. A prohibition against such a practice was lifted
when the Federal Communications Commission deregulated phone-company
broadband services last year.

As a condition for approval of the SBC-AT&T and Verizon-MCI mergers, those
companies must refrain from blocking access to websites for two years. Phone
companies say they would never impede such access, and telecom-reform bills
in Congress would outlaw the practice.

Yet the House bill explicitly allows phone companies to offer premium
content-delivery services.

They are needed, the phone giants say, because video and other
high-bandwidth applications will place a growing strain on their networks,
increasing congestion and costs. Already, snarls at certain times might
disrupt the flow of an online game or cause a live video stream to jitter.

The premium services would guarantee a content provider top-notch service by
boosting its bandwidth or giving its offerings priority over other data

BellSouth says it's in talks about such deals with about five companies,
including Movielink, which offers movie downloads. For example, to juice up
the speed of a download for a Movielink customer, BellSouth is considering
charging Movielink a fee equivalent to about 10% of the $3 to $5 the
consumer pays Movielink, says BellSouth Chief Technology Officer Bill Smith.

Similarly, an Internet-based phone company that charges subscribers $24 a
month might pay BellSouth $2 a month per customer to ensure crystal-clear
conversations. The added costs could be passed to consumers. "We have to
have ways to recoup our investment," Smith says.

Yet content providers say consumers already pay varying prices for different
broadband speeds. Those who want faster service can simply upgrade to a
higher tier. Why should the content provider also be hit with a fee?

"If the customer isn't already buying high-quality broadband that doesn't
have congestion, what are they getting -- substandard performance?" says
Jeffrey Citron, CEO of Vonage, the No. 1 Internet-based phone service.
Vonage worries the added cost could make it tougher to compete with the
phone companies' own Internet-based phone services.

Adds Google's policy counsel, Alan Davidson: "Our concern is that carriers
are being given the power to control what consumers do and see online."
Content providers that don't pay will suffer, he says, either by comparison
or because giving routing priority to some services will inherently slow
down those that wind up at the back of the line. While Google can afford the
premium fees, Davidson says, many start-ups can't, hobbling innovation on
the Web.

Smith says regular broadband service would not be affected. "What we're
talking about is offering a higher level of service, not pushing people to a
lower level."

Phone companies say they are trying to pass costs to high-bandwidth users
and spare subscribers price increases. Content providers "can always say,
'No, we're not interested,' " says AT&T Vice President Jim Cicconi.

Still, Cooper says, the plans are troubling because phone companies
plan to ensure their own video offerings boast superior quality. To
get comparable service, their rivals would be saddled with higher

If the phone giants really want to ease congestion, let them improve
the quality of all video and pass the costs to their subscribers, Web
providers say. "It ought to be done in a content-neutral fashion,"
says Brent Thompson of IAC/InterActiveCorp, which operates websites
such as Ask Jeeves and

Smith retorts that BellSouth's plan is no different than Google
charging a fee for prime placement in its advertised search
results. "Their arguments are inconsistent with their own model," he

Copyright 2006 USA TODAY, a division of Gannett Co. Inc.

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