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Something less than the Internet
This column originally ran in ComputorEdge on March 10, 2006
(Issue 2410, Recycling)
Are we about to go back in time in the online world?
A recent proposal by SBC/AT&T chairman and CEO Ed Whitacre to charge other businesses to gain access to SBC's DSL Internet subscribers sounds an awful lot like the old AOL model.
When the Internet was first opened up to the public and startup companies across the country started selling access to the general public, AOL held out.
AOL, then known as America Online, had began life in the mid-1980s as a commercial dial-up service for Commodore 64 owners. Through the years, AOL (and similar dial-up services like CompuServe, Prodigy and GEnie) had developed a tremendous amount of online content: Daily news updates, online games, shareware and freeware files for downloading, online conversationforums.
And so when this "free" Internet (you only had to pay your Internet service provider for hooking you up to the Internet backbone) came along, AOL was none too eager to offer its subscribers free access to the larger 'Net.
For the first few years that the 'Net was open to the public, AOL subscribers did not get Internet access as part of their basic AOL subscription. In fact, at first, you couldn't even send or receive Internet e-mail via AOL. You couldn't browse the Web, use ftp to download files, or access the Usenet newsgroups.
But as the popularity of the Internet exploded in the mid-1990s, AOL eventually came to see that offering full Internet access in addition to its own online content was the only way to survive.
Looking for a buck
Back in November, Whitacre told BusinessWeek magazine that Google, MSN and Vonage – among others – should expect to start paying in order to have access to SBC's DSL Internet subscribers: "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?"
That was three months ago as this is written, and SBC has yet to try to shut out certain sites from being reached by their DSL subscribers.
And given that SBC advertises its DSL service as an Internet hookup, any attempt to change such a basic operating premise for existing customers is likely to be greeted with multiple (and expensive) class-action lawsuits from said subscribers. If SBC/AT&T (SBC, the Baby Bell for much of the Southwestern United States, recently bought AT&T and took AT&T's name) wants to start selling new subscribers a form of DSL that doesn't include full Internet access, that might fly legally – but only if they make very clear that what you are getting is not access to the Internet, but access to such portions of the Internet as SBC/AT&T has decided you can access.
Can you imagine the uproar of SBC/AT&T tries this, though? Google is the No. 1 destination on the 'Net – and AT&T thinks it can dictate terms?
Getting it completely backward
Look, the only reason a lot of people are even subscribing to the SBC/AT&T DSL service in the first place is in order to be able to use Google.
If anything, SBC/AT&T ought to be paying Google a finder's fee for creating such demand for Internet access. Google's search engine has turned out to be the "killer app" that made the Internet an indispensable tool for most American homes.
Anyway, Whitacre has it all backward: It's not Google that wants access to SBC/AT&T's subscribers – it's those subscribers that are paying roughly $20 a month in order to be able to get to Google. To MSN. To Vonage.
Now, if Whitacre and his brain trust – such as it is – think that VoIP services like Vonage are going to so impact his long-distance and wireless business that the revenue from DSL connections will no longer pay its share of use of the telephony infrastructure – namely the telephone cables criss-crossing the country and world – then perhaps DSL subscription rates will need to be adjusted. Or perhaps a monthly gigabyte traffic cap needs to be implemented.
But simply putting popular Web sites off-limits to one's own subscribers unless those Web sites pay an additional access fee is a recipe for killing SBC/AT&T's own DSL business.
Because those subscribers are unlikely to put up with such heavy-handed arrogance from Whitacre et al. Instead, they'll simply take their Internet business elsewhere – to the cable companies (which by all accounts offer even faster Internet access), to the satellite TV companies (which offer ISDN-like speeds) or even go back to dial-up service.
After all, full access to the Internet slowly may be better than fast access to a very limited portion of the 'Net.