As web services become more advanced and media rich, bandwidth is becoming increasingly more expensive. That's just a fact. But what happens when a Telco starts demanding payment not only from the end user, but from the companies providing the media rich services? Well, that's exactly what is happening in the case of Verizon versus Google. Verizon is crying foul because, according to their claims, Google is profiting over their free use of Verizon's network.
Here's a basic primer for how the system works today. A customer pays an Internet Service Provider for access to the Internet, which covers the bandwidth costs of checking email, viewing web pages, and peer-to-peer applications such as chat or video. That's it. Simple.
So why does Verizon want to charge Google for using bandwidth? Their claim is that Verizon has created the backbone of the network on which Google services work. Essentially, Verizon wants to charge websites like Google a tariff for creating services that use up large amounts of bandwidth. At first glance, that may seem reasonable, but when you take into account that Verizon is double dipping, it makes no sense at all. It's as if Massachussetts tried to charge Toyota a fee for all of their cars that are driven on the states roadways. Keep in mind that Verizon is getting money from customers who pay for the bandwidth into their home. But that's not good enough for Verizon.
The fact that Verizon is targeting Google specifically raises two large flags. One, it sounds like they are afraid of what Google represents. Google is going to be offering Voice over IP (VOIP), which will compete directly with Telcos. In addition, Google is partnering with Skype to share Wi-Fi access around the world, which once again is in direct competition to Verizon. A year ago several Telcos cried foul and wanted to ban Vonage VOIP services. Two, Verizon is trying to shutout possible competition because they are planning on launching their own IPTV products, which are estimated to suck up 80% of their networks bandwidth. This leaves a paltry 20% for them to sell off to the highest bidder.
This greed and hording of bandwidth isn't anything new, all you have to do is look back to the early 1990's. Telcos, such as Verizon and SBC, have been building a massive infrastructure across the U.S. In the early 1990's they received massive tax breaks in the hundreds of billions of dollars (yes, billions) to bring high-speed fiber to over 86 million U.S. citizens by the year 2006. So where is this 45mbs high-speed fiber? Pretty much nowhere. The U.S. currently ranks 16th in the world for broadband access. In countries like Japan 100Mbs Internet connections are commonplace. The ebook "The $200 Billion Broadband Scandal" by Bruce Kushnick documents this story.
The Internet has become a public service. It is not owned by a single country or company, but is instead shared by everyone on the planet. Our government gave the Telcos huge tax breaks so in return they would build the infrastructure that would keep the U.S. competitive. Not only did the Telcos not deliver on this promise, but also are now trying to profit and hold this infrastructure hostage. It amounts to extortion. Plain and simple.
To add another level, the telcoms are also trying to get legislators into the action, demanding that Congress pass a law making Google's use illegal.