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FCC knocks telcos' secret plan to divide and bill the web

Google thinks it's 'horrible' too

The smart choice: opportunity from uncertainty

CES Forgive us if the FCC Chairman’s message today about maintaining a level of decency on the public airwaves didn't take. A pair of very large, very exposed breasts proved too distracting.

Yes, these are the moments you pray for every year here at the Consumer Electronics Show (CES). The gadget fest, for those of you who haven't heard, takes place at the same time as the Adult Entertainment Expo. The two conferences, in fact, collide at the Sands Expo and Convention Center where a few CES sessions are held. Throughout the Sands' halls, you'll see the g-string set meet the Crackberry crew.

FCC Chairman Kevin Martin today held a question and answer session at the Sands where he touched on a number of topics, including US broadband usage, VoIP and, of course, keeping TV and radio safe for public consumption. After the Chairman's speech ended, we walked about ten feet and ran into a woman exposing herself in the middle of the conference hall. Only Las Vegas could bring porn stars and Janet Jackson nipple-busters so close. (We're Martin's aides kept him away form the thigh-highs, frilly undies and leather boots.)

The Chairman – a huge improvement over chief Janet Jackson nipple shielder Michael Powell – tossed out the party line on most subjects. He called for a speedier broadband rollout, vowed to make VoIP companies meet landline safety standards and urged consumers to embrace digital TV. You've heard all these messages in the past.

What you may not be familiar with is the FCC's intense fear that media companies or the telephone companies will wall off content and internet services from certain classes of customers. While not perfectly clear about the issue at hand, Martin seems to think the internet will be divided up and with different classes of content walled off from consumers.

"(I would) be concerned if you talked about network providers blocking access to content that consumers want," he said.

Service providers should be free to charge different amounts for varying bandwidth, but they should not be allowed to cordon off content from consumers, Martin said.

These comments appeared to be in response to issues raised in a Wall Street Journal story published this morning titled "Phone companies set off a battle over internet fees."

The story reveals that large phone companies have been threatening to charge the likes of Google and Vonage for "high-quality delivery of music, movies and the like over their telecommunications networks."

"The phone companies envision a system whereby internet companies would pay a fee for their content to receive priority treatment as it moves across increasingly crowded networks," the paper said. "Those that don't pay the fee would risk their transactions with internet users – for games, movies and software downloads, for example – moving across networks at a relatively slower pace. Consumers could benefit through faster access to content from companies that agree to pay the fees."

Of course, consumers could also be screwed by having to pay more for broadband access if service providers decided to pass on these network tolls. The situation would be exacerbated for many consumers who already pay for premium bandwidth and would essentially be paying twice for improved internet speeds if service providers raised their rates as a result of the phone companies' charges.

Needless to say, this idea hasn't gone over well with service providers.

"I think it would really stifle innovation and be a horrible thing for the world," said Google co-founder Larry Page, during a keynote speech at CES. He added that a company like Google would probably not have come into existence if such "gatekeeper" polices were in place.

Smaller companies can't be happy about the idea either. Larger service providers would be able to afford to send their content along at a quicker clip and presumably deliver better products.

"We need a watchful eye to ensure that network providers do not become internet gatekeepers, with the ability to dictate who can use the internet and for what purposes," an FCC Commissioner Michael Copps told the WSJ.

BellSouth is already negotiating with one movie download provider to take a cut of the $2 to $5 fee for each film delivered, according to the paper. By paying the fee, the unnamed movie delivery company would be able to guarantee the fastest possible downloads to consumers.

It's not a pretty scenario.

As the paper notes, the telecommunications companies have traditionally used a "best efforts" policy to move internet traffic as quickly as they can regardless of the type of data. Now, however, as increased broadband usage has made movie, music and other content services more feasible, the telcos want to cash in on the shift.

Based on today's comments, the FCC looks ready to challenge the telcos on this front. It should be a great battle. ®

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