Who owns the bandwidth on an IP network? Can customers access and use any service they want using a broadband network? Are outside service providers entitled to use another service provider’s network to deliver their service? What are the rights and obligations of a broadband network provider?
As the implications of broadband IP networking become clearer to network operators, consumers, businesses and regulators, the full import of the phrase “the service is separate from the network” is starting to hit. By their very nature, IP networks enable customers to access many different kinds of services and content, most of which are not provided by the same company they pay for their broadband access.
For consumers and businesses eager to tap the new services available over broadband IP networks — VoIP chief among them today — open IP networks are a bonanza. They have multiple choices of providers, prices and features, and it seems that competition finally has come to phone service.
For network operators, such openness is a direct challenge to their traditional ways of doing business, where they provide both the network and the services, and have tight control over what is served up to the customer. When customers can access any voice service, they may not use the one provided by the access operator, and that can cut deeply into the revenue of traditional telcos.
 AT&T Inc. Chairman and CEO Ed Whitacre |
Recently, with VoIP adding more than 800,000 customers per quarter (according to figures from TeleGeography), traditional telcos have felt the sting of lost customers and revenue more strongly than ever before. Their resentment has bubbled over in public, with AT&T Inc. (formerly SBC Communications Inc.) Chairman and CEO Ed Whitacre telling Business Week early in November, “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?”
Whitacre’s comments created a sensation, because they implied that his company might be considering some way to block the traffic of third-party VoIP service providers that didn’t pay. Within days the spinmeisters at SBC were in full repair mode. “SBC has not and will not block our customers’ access to lawful content or applications available on the open public Internet. Nor will we block those providers’ access to our customers,” said a spokesperson in response to an inquiry about the CEO’s remarks. “Customers will have the same access that they have today.”
The spokesperson added, “But what we are planning on doing is investing many billions of dollars to build out an IP fiber network and to offer services and capabilities that would travel over our network infrastructure rather than the public Internet.” Those features would include “service reliability and other things that go along with that.”
As for VoIP providers, “Vonage [Holdings Corp.] is available over the open public Internet today. We are not going to block any access over the open public Internet,” the spokesperson specified.
Link Hoewing, vice president of Internet and technology policy at Verizon Communications Inc., says, far from blocking services, “We are supporting the connectivity principles which [former FCC Chairman Michael Powell] called the four network freedoms.” Early in 2004 Powell articulated four freedoms that broadband subscribers should have: access to any legal content of choice, the ability to run or use any applications of their choice, the freedom to attach any device to the Internet and the freedom to get any service information about a service of choice.
“We agree with them and have supported them for two years,” says Hoewing. “We also offer VoIP, and we want our VoIP to work on someone else’s cable modem the way it works on our DSL. So an open broadband pipe is a good thing for us, too, not just those who make VoIP in competition with us.”
Net neutrality — which basically means adhering to the four freedoms — is a requirement of the FCC in approving the mergers of SBC and AT&T Corp., and Verizon and MCI Inc., which means they have agreed to open fair use.
Bryan Martin, CEO of 8x8 Inc., which offers the consumer and business VoIP service Packet8, says customers should be able to use the bandwidth they pay network operators for as they wish. If service providers have an issue with the usage, he says, “they can charge more for the bandwidth, but I don’t think they can enforce that after the fact.”
However, the merger agreements require SBC and Verizon to adhere to network neutrality for just two years. After that time, can they close their networks?
Martin appears untroubled by the prospect. “In the telecom world two years is basically forever,” says Martin. Besides, he adds, “I don’t think any regulatory agency should be able to go to any company saying ‘you have to agree forever’ to anything like that.”
| Links |
| 8x8 Inc. www.8x8.com AT&T Inc. www.att.com MCI Inc. www.mci.com SBC Communications Inc. www.sbc.com TeleGeography www.telegeography.com Verizon Communications Inc. www.verizon.com |
