Double Dipping - AT&T Edition
Remember Ed Whiteacre (ex AT&T CEO) and his hilariously ridiculous statement about "paying for our pipes"? To refresh your memory (italics mine)
Kittehs!
There, you now have a pressing urge to go hit up YouTube, right? Kittehs!
I'll make it easier for you
You're watching the above Kitteh video, right? Of course you are....
The data came down the pipe from Verizon / Comcast / Charter / whoever to you, and you're happily watching said Kitteh video.
Who paid for the pipe from Verizon / whoever to you? Why, you did, right? Thats what your monthly bill goes to. Simple
Where did that data come from? YouTube, right?
So, what our boy (Ed) seems to be implying is that YouTube isn't paying for this. Remember
YouTube has data centers, big honking data centers, and big honking pipes from those data-centers (ok, teensy fibre pipes, but you get the point), and they're paying huge sums of money to their carriers for their data. Oh, they may be paying less than you and I, but thats what comes with negotiation power.
But there is no Free Lunch going on here.
Remember That.
So, of course, AT&T is trying this again. In an interview with the WSJ, John Donovan (CEO AT&T) floated the same bloody idea again, just in a different guise. Basically, he wants the providers of data services to pay for the data used by those services.
Again, sounds nice and neat and cool, except that they are already paying for that data!
Seriously, the only reason this is an issue is because the U.S. ISPs are imposing bandwidth caps on the consumer end. They need to make more money somewhere, and since
- the costs of providing data services are going down
- there doesnt actually seem to be a spectrum shortage in the wireless world
the only way out is to create artificial scarcity.
So, cut the amount of data people can use (I love the absolutely arbitrary "top 5%" rule), and then charge the provider for that very same data.
Brilliant!
I love living in a quasi-monopolistic world. Services are *so* much better...
How concerned are you about Internet upstarts like Google (GOOG ), MSN, Vonage, and others?Lets break down this bit, so that we are absolutely clear about it.
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?
Kittehs!
There, you now have a pressing urge to go hit up YouTube, right? Kittehs!
I'll make it easier for you
You're watching the above Kitteh video, right? Of course you are....
The data came down the pipe from Verizon / Comcast / Charter / whoever to you, and you're happily watching said Kitteh video.
Who paid for the pipe from Verizon / whoever to you? Why, you did, right? Thats what your monthly bill goes to. Simple
Where did that data come from? YouTube, right?
So, what our boy (Ed) seems to be implying is that YouTube isn't paying for this. Remember
There's going to have to be some mechanism for these people who use these pipes to pay for the portion they're usingThats good, and fair, and the American way, right? Except, YouTube is damn well paying for these pipes!!
YouTube has data centers, big honking data centers, and big honking pipes from those data-centers (ok, teensy fibre pipes, but you get the point), and they're paying huge sums of money to their carriers for their data. Oh, they may be paying less than you and I, but thats what comes with negotiation power.
But there is no Free Lunch going on here.
Remember That.
So, of course, AT&T is trying this again. In an interview with the WSJ, John Donovan (CEO AT&T) floated the same bloody idea again, just in a different guise. Basically, he wants the providers of data services to pay for the data used by those services.
Again, sounds nice and neat and cool, except that they are already paying for that data!
Seriously, the only reason this is an issue is because the U.S. ISPs are imposing bandwidth caps on the consumer end. They need to make more money somewhere, and since
- the costs of providing data services are going down
- there doesnt actually seem to be a spectrum shortage in the wireless world
the only way out is to create artificial scarcity.
So, cut the amount of data people can use (I love the absolutely arbitrary "top 5%" rule), and then charge the provider for that very same data.
Brilliant!
I love living in a quasi-monopolistic world. Services are *so* much better...
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