Nyquist Capital

Interesting interview in Businessweek on Net Neutrality with Verizon’s VP of Public Affairs (aka he works in Washington DC) Thomas J. Tauke.

It would appear that Verizon has finally found someone who can make a clear case as to why Net Neutrality legislation is anti-market, anti-competitive, and a expropriation of corporate property. This guy mixes the Kool-Aid extra sweet…

Should Internet content providers pay extra to reach customers at higher speeds?
It depends. There is no business model yet that we are aware of where the content providers are paying. But as these networks have increased capability, and as new companies emerge, we think new models will develop.

So let’s say, for example, that you’ve purchased 5 megabits of service, and you are a gamer. And the XYZ gaming company develops a new game that needs 25 megabits of service. They could come to you as a consumer of their products and say: “Go to Verizon and buy 25 megabits.” Or they could come to Verizon and say: “When he logs on, we want you to up the speed so that he will get 25 megabits.” So this would be a way in which they could jumpstart their business by making sure that when you purchased the game from them you also got the high-speed capability.

Is there a gaming company that is doing that now? No. Should we prevent a gaming company from doing that? We don’t see why, because it obviously is easier for that gaming company to come to us and say, “When one of our customers needs this speed, we’d like to give it to them,” rather than to have them go and convince every one of their customers that they should pay for this high-speed access on a monthly basis.

In effect, net neutrality legislation would eliminate a carriers ability to offer variable pricing.

Update: This interview was a sidebar to a longer article lamenting the Bell’s lack of innovation. I’ve also made some comments following up on a Techdirt post that I disagreed with.