Opinion: SBC CEO Edward Whitacre says his company's paying customers should pay more for using the SBC network to exchange content. His plan would cripple the Internet.What the head of SBC says about paying for the Internet is a cause for concern.
What follows is the most disturbing quote I have read in quite some time. It's from an interview with SBC CEO Edward Whitacre that appeared on the BusinessWeek Web site. Here's the exchange:
BW: How concerned are you about Internet upstarts like Google, MSN, Vonage, and others?
Whitacre: "How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?
"The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!"
No, Mr. Whitacre, Google, Yahoo, MSN, Vonage, and the whole rest of the Internet isn't nuts, you are. Worse, you're the nut who is running our country's largest telecom provider.
My understanding is that everyone on the Internet pays for the bandwidth they use. I am, for example, paying SBC about $80 a month for a DSL connection and some static IP addresses. A company like Google pays for the bandwidth it uses, writing very significant checks, maybe to SBC. That's where the return on SBC's investment is supposed to come from, not charging extra for allowing Internet content and transactions to reach your customers.
The Internet has worked quite well, thus far. But, now Mr. Whitacre, in true telecom monopolist fashion, shows up with plans to change the rules. This is the same company, after all, that claims a patent on the frames technology used on Web sites and once sent a flurry of letters to businesses demanding payment. Some people just don't get it, ya know?
If I read the quote correctly, Mr. Whitacre wants to charge an additional fee to deliver content to his customers, people like me who are already paying for the bandwidth necessary to receive that content. Is he trying to charge twice for the same bandwidth?
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Or he is simply trying to give his company's online content the benefit of free carriage while charging competitors to reach his customers?
In the voice telephony world, this sounds like besides charging its regular rates, SBC would want to charge businesses extra to do things like call their customers or take orders over the phone. Why they should pay extra for this I can't imagine.
To be honest, I am not sure what this lunatic wants to do—besides fleece anyone who comes in contact with his company's network—but he's a lunatic to be reckoned with. Actually, I have other ideas, but reckoning is as far as the penal code allows me to go.
Several years ago, I wrote urging the FCC to prevent Internet service providers, like SBC and the cable companies, from also owning content. My belief is that companies providing Internet access should be common carriers, their facilities available to anyone with the ability to pay, all on the same terms.
Internet carriers are free to charge one another to access each others' networks or to carry traffic that isn't from or to their customers IP addresses. Internet users, however, should only have to pay their own ISP for the bandwidth they use. That model has worked fine so far and should work well into the future, provided the Edward Whitacres of the world can be stopped. (What makes me think there is somebody just like him lurking over at Comcast?)
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SBC is entitled to a fair rate of return on the network services it provides, but if someone else can provide them less expensively, SBC deserves only a limited amount of special protection while it makes the necessary adjustments to its business model.
Mr. Whitacre's plan could cripple the Internet, which might be a good thing for a company selling dial tone delivered over copper wires into homes and offices, but would be a major blow to everyone else.
I hope Mr. Whitacre was just off his meds when he spoke to BusinessWeek, or that somehow he was misquoted/misunderstood/was really joking. But, for now, I take the man at his word. Edward Whitacre is the Internet's biggest threat. And he must be stopped.
Contributing editor David Coursey has spent two decades writing about hardware, software and communications for business customers. He can be reached at david_coursey@ziffdavis.com.
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