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January 22, 2006

The Future of Online Business - Paying AT&T for 'Priority' Status

Good article today from The Washington Post on "network neutrality" and possible plans by big telcoms to make companies pay for priority treatment over their competition:

Companies like Google and Yahoo pay some fees to connect to their servers to the Internet, but AT&T will collect little if any additional revenue when Yahoo starts offering new features that take up lots of bandwidth on the Internet. When Yahoo's millions of customers download huge blocks of video or play complex video games, AT&T ends up carrying that increased digital traffic without additional financial compensation.

That could change if a plan to award the best bandwidth to the highest bidder goes into effect.

Probably won't effect mom-and-pops much, but could seriously impinge on the ability of sites like Craigslist and MySpace to come from nowhere and evolve into massive bandwidth-sucking monsters. Those who can pay more will be given priority, while those with fast-growing startups will either also pay up, or be stuck with sluggish websites. The bar for entry gets raised.

Read The Coming Tug of War Over the Internet.


Update: Check out this site on media policy pointed to in the comments for more details.

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