From a marketing/sales perspective the proposed plan is a "no win" for the broadband providers. If I'm Comcast and I go to Google and say pay up or else, what is my follow through? If Google says "no thank you" as I'm sure they will, you have just told your customer that their internet experience is going to be worse than before because Google refused to pay for bandwidth on your network. Now as Joe Customer on Comcast's network I have two choices regardless of how I feel about Google not paying up. I can either put up with crappy or no service to YouTube and Google or I can go somewhere else.

The problem with this scenario, from a Comcast perspective, is that the customer's choices have no positive impact on their Comcast experience. The best they can do from a Comcast perspective is put up with a degraded internet experience. Not a choice any businessman would want to force on a customer.

If you are Comcast going to Google, what do you ask for? I would think anything less that $0.50/customer would be a waste of time. Raising your broadband price $0.50/month is not going to cause a big stir and mass migration. Sure you are going to get other people to pay eventually, but how many can really afford it beyond Google, Yahoo and MSN for instance.

Now, from a Google perspective $0.50/customer/month for Comcast is going to be $4.5 mil extra every month and for the top 5 providers it is going to be $16 mil per month. I doubt they are going to be able to pay .

And finally, from a competition perspective, you are Verizon and Comcast has just issued the ultimatum to Google who said no, do you follow suite and hit Google up as well or do you now advertise that you have an 'express lane' to Google and Comcast customers are more than welcome to the fold. Instead of getting $0.50/customer out of Google you get X many new customers from Comcast. The content provider's pockets aren't deep enough to make sticking them more profitable than sticking your customer. It is back to a volume question. Do I sell 10 items at a $1000 markup and make $10000 or do I sell 10000 items at a $1 markup to make my $10000. You are going to have a lot more potential customers on the $1 markup.

I just don't see the teeth in the argument. Way too many things have to align, against natural market forces, make the doomsday a reality.

   Sam Tetherow
   Sandhills Wireless

Pete Davis wrote:
Hmmm.. I think they DO charge the recipient of the cell call. Even if its a land line, the recipient does have to pay for service, even if it is a "unlimited minutes" plan. Nobody has FREE phone service. Someone pays for the dial tone, even if its VOIP. The telephone system kind of IS the original INTER(national)NET(work) just that it was in place before everyone out there was trying to hook up a computer and send each other video clips of chimpanzees lip-syncing Sonny and Cher songs. The nice thing as a provider (of the phone or the internet, or both) is that whether your customer is sending bits (or voice) or whether the customer is receiving, they are still paying you. Peering agreements between tier 1 providers only make their network better. AT&T knows that if they can't get my bits to connect to websites hosted on Sprint lines, then I will find an upstream who will. Same thing if I am a hosting company. If I host using a Verizon upstream, and L3 customers cannot connect to my server, then VZ will get the boot. Same analogy applies to phones. If my Sprint phone in Texas couldn't connect me to a Verizon subscriber in West Virginia, and Sprint said it was because they couldn't get a peering agreement with Verizon, then I would discontinue the peering agreement between Sprint and my checkbook. On the other hand, as a provider, I do have the ability to give access to only my subscribers for certain perks. Some cell providers offer "free" mobile to mobile calling. And why not? This gets them loyalty to both customers. Other ISPs offer "exclusive content" (AOL, YahooDSL, etc). The "exclusive" video clips available offered by cell providers is a war going on now that I don't really understand, but if it brings in the customers, then good for them.

If you cannot offer something more than the competitor, then you are just another ISP. To stand out from the competition, you need to offer something. Speed, reliability, security, exclusive content, price, availability to connectivity when the customer lives 14 miles out of the city limits, or whatever.

Pete Davis

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