Schools, businesses, and other consumers could end up paying more for videoconferencing, video streaming, voice-over-IP, and other broadband internet services, if plans floated by major telecommunications companies come to pass. The firms’ proposals have sparked a wave of concern that reaches from consumer rights’ groups to members of Congress–with some critics saying the very future of the internet is at stake.

On today’s internet, the traffic cops are blind; they do not look at the data they are directing, and they do not give preferential treatment. But that’s something operators of the internet highway, the major U.S. phone companies, want to change by effectively adding a toll lane: They want to be able to give priority treatment to those who pay to get through faster.

Naturally, consumer advocates and the web companies that would be paying the toll are calling it highway robbery.

“Allowing broadband carriers to control what people see and do online would fundamentally undermine the principles that have made the internet such a success,” Vinton Cerf told a Senate committee recently. Cerf, who played a key role in building the internet, is now the “chief internet evangelist” at Google Inc.

On the internet, information is carried in “packets,” or small chunks of data. An eMail message might be divided into several packets that travel different routes to the destination, much like cars have multiple ways of getting somewhere. The packets might arrive out of order, a few even late, but data can be reassembled to reconstitute the message.

This design grew out of the military’s desire for a network that was both simple and reliable. And as the internet became more widely available, this equal treatment of traffic was part of what made it attractive; individuals, startups, and big corporations were on the same footing.

Now, however, the internet is being used for things the engineers of the 1960s and 70s could not have envisioned, such as video, telephone calls, and internet games.

It doesn’t really matter if an eMail message gets where it is going half a second late, but a half-second’s delay in a phone call is annoying, and a half-second’s delay in a fast-moving game can mean a missed shot.

Thus, the telecommunications companies want to be able to provide “tiered service,” guaranteeing that, for a price, some packets will get to their destination on time.

The carriers are under “tremendous pressure” from customers to provide more reliable service, said Shawn White, director of external operations at Keynote Systems Inc., which tracks the performance of web sites and the internet.

Brief delays, for instance, could result in stuttering video, which is unacceptable to advertisers and end-users alike, White notes.

Whether they tier their service or not, telecommunications companies need to expand capacity. To do so costs money, and the telecoms argue that internet users will have to pay, one way or another. They say it is preferable that the money come from those who need and are willing to pay for better service, rather than spreading the cost out over all users.

“We do have to recover the cost for building the new capacity out there that the content providers are expecting us to provide,” said Jim Cicconi, AT&T Inc.’s senior executive vice president of external and legislative affairs.

AT&T already provides connections between offices of the same company, or between government offices, using AT&T’s own lines rather than the public internet. This allows AT&T to guarantee a certain quality level.

By prioritizing packets, AT&T could extend that service to the connection between a web site and a surfer at home or at school.

To the opponents of such plans, abandoning the “network neutrality” principle opens up the prospect of carriers blocking sites that do not pay up or that compete with the carriers’ own services–for instance, by providing phone calls.

The carriers have stoked these fears with some hard-line rhetoric. The Washington Post recently quoted John Thorne, senior vice president and deputy general counsel for Verizon Communications Inc., as telling a conference that Google “is enjoying a free lunch that should, by any rational account, be the lunch of the facilities providers.”

Ed Whitacre, AT&T’s chief executive, has raised eyebrows with similar statements to the effect that Google and Yahoo Inc. are “freeloading” on the internet–a remarkable assertion, considering both companies pay millions of dollars in internet access fees and their visitors pay for internet access, too.

Brasil Telecom SA, Brazil’s third-largest phone company, said in mid-February it had installed the first system that can identify information by type–say, a voice call–and bill the company providing it, addressing what the company calls “revenue leakage.” The company would not give further details on its plans.

U.S. carriers are careful to point out that they do not intend to block anyone’s internet access or degrade service.

“None of the worst scenarios people have painted here can take place, nor are they taking place,” Cicconi said, adding that the government would stop any such abuse, as the Federal Communications Commission (FCC) did in one case where a phone company that provides internet services blocked a competing voice-over-internet company.

Also, competition among carriers means they will not want to block sites for fear of losing customers, Cicconi said.

Opponents say that even if toll roads leave the rest of the internet unimpeded, it will stifle innovation.

“The next great idea, the next Google or eBay or Napster or whatever, won’t have the capital to get themselves in the fast lanes right away,” said Ben Scott at Free Press, a nonprofit organization that promotes freedom of speech. “The reason the big eCompanies were so successful was that they started on the same level playing field as everyone else.”

Another objection to packet prioritization is technical.

The Internet2 association assumed that prioritization was the way to go when it started building a super-fast, next-generation network connecting universities.

However, engineers abandoned that notion after a few years, concluding that it’s more effective simply to expand the network’s capacity for all traffic–adding lanes to the highway instead of a parallel toll road.

The FCC has supported net neutrality in somewhat hedged terms, leading to calls in Congress for a stronger defense of the principle to be included in a future telecommunications bill.

Sen. Ron Wyden, D-Ore., has introduced legislation that would preserve net neutrality, called the Internet Non-Discrimination Act of 2006. Wyden’s bill would ensure that network operators do not act as gatekeepers by blocking, screening, or discriminating against certain kinds of internet traffic, or creating segmented internet highways for preferred services.

Many consumer rights’ groups have praised the bill, including EDUCAUSE, a nonprofit organization that promotes the intelligent use of technology in higher education.

In a letter to Wyden, EDUCAUSE President Brian Hawkins and Internet2 President and CEO Doug Van Houweling said, “The internet has become the most valuable medium for distance learning, scientific research, telemedicine, and many other educational purposes. Broadband internet service allows rural students to take music classes from the best symphony conductors, permits grammar-school students to participate in virtual undersea expeditions, and permits doctors in remote locations to share X-rays and monitor their patients in real time. But the internet can only serve these goals if it remains open and available to all users, educators, and innovators.”

The telephone and cable companies argue against any such law, pointing to the traditionally very light regulation of the internet.

“The hands-off policy has given us the flexibility to innovate and respond to consumer demand,” said Kyle McSlarrow, chief executive of the National Cable and Telecommunications Association.

AT&T’s announcement of its plans to buy BellSouth Corp. for $67 billion, however, might give Congress and others more reason for pause. If approved, the merger–announced March 5–reportedly would create a telecommunications giant with $130 billion in sales and 70 million local phone customers in 22 states. (See related story.)

For the carriers, part of the attraction of a tiered internet is probably that they would get away from being a “dumb pipe.” They’re the messengers, with the unglamorous job of passing along the data that others produce and consume. With tiered service, the carrier would become more important–and, perhaps, would have more pricing power.

“It’s very rational behavior in the industry. I would do the same thing if I was paid by my shareholders,” Free Press’s Scott said. “But rational market behavior doesn’t necessarily mean good public service.”


AT&T Inc.

Verizon Communications Inc.

Federal Communications Commission

Free Press

Sen. Ron Wyden, D-Ore.


National Cable and Telecommunications Association