With apologies to Om Malik, I've borrowed the title of his book about the executives such as Bernie Ebbers who scored during the telecom boom as a way to talk about how today's broadband service providers are sitting on a gold mine and more than happy to squeeze as much profit from it as they possibly can. While a growing number of carriers openly talk about implementing downstream tollgates, they already have enough economic power to grow revenue. Consumers love broadband and are willing to pay a premium for it. In many markets, there are only two major players (a carrier and cableco), and there's little incentive to compete on price because why offer a discount if it's not required. Look at what Bell Canada did yesterday when it nonchalantly unveiled a $2 a month increase in broadband prices. In one fell swoop, it added an additional $52.8 million of annual revenue. But this market clout isn't enough for carriers such as AT&T, BellSouth, Bell Canada and Telus, who want of implement tollgates and QoS fees to generate even more revenue. Truth be told, tollgates are coming; it's only a question of which carrier moves first, how they're sold to consumers ("We need to pay to build next-generation networks, blah, blah, blah"), and how much revenue these tollgates will generate. Google and other popular Web service and content providers will complain and lament the demise of net neutrality but how many DSL customers are really going to switch to cable because Google.com pops up a little slower than it did before? For carriers losing local telephone customers to cablecos, Vonage, Skype, etc., tollgates are their economic salvation. The key is getting them installed while you still have the upper hand because you can get away with new fees when there is still strong demand for your product or service.
Update: Another high-speed revenue opportunity available to carriers is value-added services such as anti-virus and anti-spam protection, and premium content.
Update II: BusinessWeek has a story about how Verizon is setting aside major chunks of its high-speed network for its television service. This has raised concerns about the amount of room left for services and content offered by other companies. It's like Verizon is giving itself a super-highway and everyone else a dusty back country road. As well, Jeff Chester has an empassioned piece called "The End of the Internet?" that calls on the FCC to stop the carriers from controlling the Internet's "digital destiny". Lots of comment from bloggers such as Rob Hyndman and Mathew Ingram.