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AT&T and Whitacre on Net Neutrality

Good but short interview in the Financial Times this morning with Ed Whitacre, CEO of AT&T (prior CEO of SBC).

Some choice quotes:

If someone wants to transmit a high quality service with no interruptions and ‘guaranteed this, guaranteed that’, they should be willing to pay for that,” the AT&T chief said.

“Now they might pass it on to their customers who are looking at a movie, for example. But that ought to be a cost of doing business for them. They shouldn’t get on [the network] and expect a free ride.”

Note that the cable guys have been virtually silent on this issue. Why? They already deliver video the old fashioned broadcast way and don’t face this issue. Eventually, they will have a harder time adapting to the non-broadcast IPTV model- but hey, why throw yourself in front of a moving bus when the telcos are willing to do it for you?

I’ve got to hand it to Whitacre for sticking to his message however unpopular it is. Even people who dislike what he has to say must admire his fortitude.

“We have to figure out who pays for this bigger and bigger IP network,” said Mr Whitacre, who was in New York ahead of AT&T’s annual presentation to investors and analysts on Tuesday. “We have to show a return on our investments.”

Amen.

Discussion

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  1. I totally agree with Whitacre. When true-broadband (FTTx and >10Mbps BWA) infrastructures are in place, the likes of Google, MSN, AOL, and YAHOO should be paying for “premium”distribution, i.e. at full-streaming quality.

    They should NOT be forced tho. If they don’t pay the tiny fees, the transmission should be at lower bitrates. Simple as that.

    I remember that I was trying to buy bandwidth on the platforms from the likes of Sky and DirecTV back in 1996. They wanted to have 50% of my freaking revenue for transmission (via their satellite) and a huge fee on top of it for the tiny capacity on their satellite transponder. Go figure ;-)

    Posted by Neal S. Lachman | February 7, 2006, 1:06 PM
  2. Gentlemen:

    The issue here is not one of adequately recovering costs from suppliers such as Yahoo! and MSN.

    Rather, this is the approach of least resistence to deregulating network neutrality – not only for revenue purposes but also for the purposes of extending total control to local COs.

    Formulating this effort around an attempt to recoup costs from large providers, such as Microsoft, is simply a red herring to avoid the backlash which would be associated with an up-front assault on control-limitations.

    If successful, the demise of network neutrality will lead to the following, in this order:

    1. Preferred bandwidth allocations for paying “partners”
    2. Surcharges based on type of content to providers
    3. Surcharges to consumers based on type and amount of content

    AT&T was originally broken up under the Sherwin anti-trust act; The remnants of the original entity are now re-forming and obtaining the same level of control exercised by their former incarnation.

    The difference between today’s emerging entity and that of yore is nothing more than the calendar year in which they operate.

    Johnathan I. Hyler,
    CISSP, IIA, MCSE, MCSD
    johann7@comcast.net

    Posted by Johnathan I. Hyler | March 8, 2006, 9:35 AM
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