The Washington Post ran an article this morning giving industry leaders a chance to comment on the recent comments by SBC CEO Ed Whitacre as well as giving SBC an opportunity to clarify. My original blog post on his troubling comments is here.
SBC spokesman Michael Balmoris said Whitacre was not talking about charging companies for letting customers access their Web sites. Rather, he said, Whitacre was referring to access Internet companies may want to the “managed and secure” portions of the fiber-optic network SBC is building largely to deliver video to customer homes.
“SBC has not and will not block or limit access to lawful content or applications on the Internet,” he said. “Mr. Whitacre’s comments are being misinterpreted. They were not made in the context of the Internet, but rather SBC’s $4 billion investment in its new fiber network to provide Internet-based video services,” Balmoris said.
This clarification is a very different picture from Mr. Whitacres original comments. I would think that if SBC were concerned about companies looking for free access to their new video pipes the companies they would have railed against would have been News Corp, NBC Universal and Viacom. Why he responded as he did when asked about Google, Vonage and MSN is very confusing.
Industry leaders had this to say about Whitacres original comments:
“It seems like a rather monopolistic attitude,” said Michael Jackson, vice president for operations at Skype. “If the line were free to the user, or the bandwidth were free to the user, then perhaps he’d have a point. But the line isn’t free to the user. The customer is paying for the bandwidth. . . . He’s already paid for it. Why should he pay more?”
“It sounds like SBC is going to block me, try to block me, or try to charge me for something,” said Vonage Chairman Jeffrey Citron.
“Any notion that SBC or anyone else . . . can get paid twice on the same service is a bit ludicrous,” he added, saying it would be like UPS demanding the sender and recipient of a package both pay for delivery.
While I like Cintrons UPS analogy, the reality is that telecommunications companies already get paid for delivery at both ends of the connection. At the hosted end companies such as Google, Yahoo and Vonage are paying for huge pipes to connect their hosting centers to the Internet. At the end user side the end user is paying for her broadband access to the Internet. The fact that SBC and the like are already being paid for providing their pipes is why people reacted so strongly to Mr. Whitacres original comments.
