IP Democracy: Operators Move to Block VoIP, Video Rivals

The Wall Street Journal has a piece today on how phone and cable companies are reining in customers’ Internet usage, with the not-so-coincidental byproduct of blocking IP-based competitive activities such as VoIP and video file-sharing. The article, penned by Peter Grant and Jesse Drucker, hones in on the central conundrum of the Web 2.0 era: unfettered use of bandwidth can chew up network resources but limiting that use can block competition.

Vodafone and Verizon Wireless have provisions in their contracts that customers can’t use their high-speed wireless networks for VoIP services, ostensibly because the two partners fear bandwidth crippling. “We don’t want people clogging up the network,” Verizon Wireless spokesman Jim Gerace says in the article.

Cable R&D consortium CableLabs contends that 18% of all traffic on cable high-speed networks comes from file-sharing service BitTorrent.

But phone and cable companies, the main broadband conduits in the home, have the power to cut off promising new competitive voice and video services by mickeying with bandwidth usage or by simply out and out barring alternative service usage. And some of the seemingly “neutral” solutions — charging customers more for more bandwidth-intensive services or giving these high-bandwidth competitors lower packet priority — don’t seem much better.

Time Warner Cable is considering several ways of controlling the traffic on its network, Mr. Lajoie says. The operator might simply give video file-sharing traffic a lower priority than other traffic so that it slows down first during periods of peak usage. Or it might restrict the flow of bits to a particular user’s computer if the usage is too heavy. Time Warner Cable may also charge heavy users more if they want preferred treatment. “Revenue opportunities…definitely exist,” Mr. Lajoie says.

Posted by Cynthia Brumfield on October 21, 2005 8:05 AM to IP Democracy