The Tiering of the Internet

The Boston Globe has an article about how the old telephone companies are lobbying Congress and the FCC to allow a multi-tier internet that would prioritize packet delivery, for a price.

The prospect of a tiered Internet with ”regular” and ”premium” broadband services is spawning fierce debate as Congress takes up a major overhaul of telecom regulations. The House of Representatives last month held hearings on a preliminary draft by two GOP congressmen, Joe Barton of Texas and Fred Upton of Michigan, that would give the telecom companies the freedom to establish premium broadband services. The telecom bill is due for action early next year.

A change along these lines would be different from the way the Internet has operated. ”The Internet model has been that carriers cannot interfere with the choices that consumers make,” said Alan Davidson, Google’s Washington policy counsel.

This is the old slice and dice game that they have tried to play since the bottom fell out of the long-distance market. The competitive local carrriers are basically dead, after exhausting themselves waiting around for the FCC to enforce interconnection rules with the old Bell system. The telcos and incumbent cable companies have been successful in banning municipal broadband or fiber schemes in several states. In other words, “if we don’t do it…nobody else can either”.

Now comes an announcement from Adelphia Cable today in the mail, that residential broadband (which goes for about $58/month) is now going to cost $78.00/month (for a 12 month contract) for “businesses” that are home-based. Hmm. No value-added. Half the present upload speed (384K instead of 768). No fixed IP address, still asymetrical speeds, and a 40% price increase. A fixed IP is another $20.00 per month. They include a “web site”…and 7 eMail addresses. “Business Class” indeed.

If Verizon residential DSL is available for $30.00/month that basically allows for the same or better speeds, will Adelphia be able to compete in the same market, with a product that has the same or lower speeds, for more than two-and-a-half times the price? And Verizon does offer a “business DSL” which includes a fixed IP address, for about $80.00/month. We have a client running a 12-seat computer classroom, and another 10 administration workers off of one of these Verizon connections.

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