Wednesday, July 19, 2006

ISPs are idiots

Well, the ones in America, anyway. They argue that big sites like Google get a "free ride" on the networks, making money from users that they don't share with the ISPs. Some free ride. I'd hate to have Google's monthly bandwidth bill. But as Vint Cerf points out, the real issue is with the users: the ISPs have contracted with the users to provide Internet access to the whole internet, ie any website the user chooses to go to. Now they want to say "Well actually, you can only go to Google and Yahoo if they pay us money to let you." They are breaking the basis of the deal.

And best of all, they are doing it because they fundamentally misunderstand the nature of the internet: all this talk about "prioritising streaming video" means they are trying to re-create a video network on the Internet. But that's now how people use video on the Internet:

[I]f you’re paying any attention at all to Tivo and iPod and other fairly modern communication services, you’ll find people downloading things and then listening to or watching them later. And if you are no longer watching the video as its being delivered to your hard drive, then you no longer need for it to be delivered in realtime in a viewable form. The broadband providers seem to be reinventing the cable and satellite television service model for the Internet. What mystifies me about this is that they are therefore going after an already hotly competing-for market with a finite revenue stream. So the best they can do is a share of that market. Their entry is not going to increase the market, in my view.

So they're breaking the contract with their users to go into competition with satellite TV. What a good business decision. Must be a few MBAs involved there.


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