I'm a bit late wading into the increasingly-contentious "net neutrality" bugaboo but if you've got some reading time over this last holiday weekend, you may want to check out a feature I wrote in today's National Post about what's going on. I've tried to boil down why some of the large U.S. telecom carriers such as SBC and BellSouth are so adamant about charging downstream tollgates and/or packet prioritization fees. A basic argument is their local phone businesses are shrinking due to VoIP and cable telephony so they need to find new sources of revenue at a time when the marketing of broadband access is becoming increasingly sophisticated with a variety of plans offering different speeds and packet quotas. I believe another reality is telecom executives such as SBC's Ed Whitacre (picture, above left) and BellSouth's William Smith are waging a high-profile lobbying campaign to influence the U.S. government's overhaul of the 1996 Telecommunications Act. By asking for the stars and the moon, they hope to get something more realistic from the folks in Washington. In Canada, Telus Corp. concedes it is looking at options such as downstream tollgates but in typical Canadian fashion, it doesn't want to act alone. Frankly, I do not believe the concept of tollgates and packet prioritization fees will happen because they will fundamentally change how the Internet works and the industry's economics. As it now stands, consumers are paying carriers - and cablecos - to access the Web while online service and content providers are paying fees to have their data centres and servers connected to the network. The carriers may be crying poor but broadband access is a very good business for them. The real issue is they want a bigger piece of the action but they must come up with more creative ways to do it than downstream fees.
Update: Here's a recent BusinessWeek story on net neutrality.