Trend: Broadband providers want to create a first-class channel for their own content.
The Baby Bells, led by Verizon, want to provide a special fast-lane channel on their broadband networks for their own content. Can they relegate Google, Yahoo, Amazon, eBay, etc. to second-class citizen status? Excerpts from a BusinessWeek article below.
Link: BusinessWeek.com - Is Verizon A Network Hog?
Documents filed with the Federal Communications Commission show that Verizon Communications Inc. is setting aside a wide lane on its fiber-optic network for delivering its own television service. According to Marvin Sirbu, an engineering professor at Carnegie Mellon University who examined the documents, more than 80% of Verizon's current capacity is earmarked for carrying its service, while all other traffic jostles in the remainder.
Leading Net companies say that Verizon's actions could keep some rivals off the road. As consumers try to search Google, buy books on Amazon.com (AMZN ), or watch videos on Yahoo! (YHOO ), they'll all be trying to squeeze into the leftover lanes on Verizon's network. On Feb. 7 the Net companies plan to take their complaints about Verizon's plans to the Senate during a hearing on telecom reform. "The Bells have designed a broadband system that squeezes out the public Internet in favor of services or content they want to provide," says Paul Misener, vice-president for global policy at Amazon.com Inc.
Verizon argues that it needs to take such measures to earn a return on its network investments. The New York giant is seeing steep declines in its traditional telephone market, so it is spending an estimated $10 billion over seven years on new fiber lines to diversify into the TV business. Unless it can deliver seamless, high-quality TV service -- a real bandwidth hog -- Verizon says it won't be able to compete against Comcast Corp. (CMCSA ) and other cable rivals. We "give consumers choice for video services," says Verizon Executive Vice-President Thomas J. Tauke.
At issue is what the Internet of the future will offer.The Net companies are trying to persuade Congress to pass a law ensuring that broadband providers, such as the Bells, don't discriminate against rivals when they charge tolls or prioritize traffic, an idea called "network neutrality."
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