Monday, March 27, 2006

The Tail Charges the Dog

Lately the telephone companies have been squawking about the "unfairness" of companies like Google and eBay and Yahoo making money off their wires, and suggesting a multi-tiered approach might be in the future. They've said it might be fairer if companies paid a premium for higher speeds.

So far the FCC, in a rare burst of spinefulness, has resisted. But who knows what will happen in the future?

Techdirt has a great column suggesting the opposite question: If anyone's going to pay anyone, shouldn't the telcos pay Google and Yahoo and other content providers for making the Internet so valuable that people want to order high-speed Internet service in the first place?

Of course, the answer goes back to the Reagan era, when the last great organized crime shakedown racket took place. I'm talking about when the big cable systems demanded part ownership and/or other extravagant incentives in exchange for carrying channels on their systems. The channels bent over, and the pattern was set. The telcos are just trying to repeat history.

The problem is that somewhere along the line, the paradigm of the businesses formed in the wrong way (IMHO). Cable and telcos see themselves as supermarket chains, and distributors must compete for their precious shelf space, and bribe them to feature their products.

There's a reason they call it the "Information Superhighway" and not the "Information Supergrocer." They are in the business of providing access.

Telcos are airlines. You choose the fastest provider at the best price to take you reliably to the most fun destinations.

Without destinations, there would be no need for travel.

They need to understand that. If an airline said it was going to start flying slower to Orlando unless Disney paid up, I know which of his four fingers Mickey would give him.

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