IP Democracy: Seidenberg: Who Pays for the Backbone?

An article last month in Multichannel News quoted Ivan Seidenberg’s comments on the network neutrality issue from a perspective that caught my attention. His comments came to mind again today, amidst the brouhaha over the latest telecom megamerger.

Speaking at the BusinessWeek Media Summit, Seidenberg pointed to backbone costs as a key driver for charging web-based service providers like Google fees for access to higher speed tiers, which some have begun referring to as “access tiering.” This perspective seems all the more significant given that Verizon and SBC recently acquired two of the largest providers of backbone facilities.

“If you buy your DSL [digital subscriber line] from FiOS, you’ll never have any problem with the bandwidth from your house to the first point in the network,” Seidenberg said. “But the issue is that the backbone needs to be built. Who is going to build it?” Seidenberg added that the options are either that the Internet-applications companies like Google foot the bill, or that it falls on Verizon with no regard to how the company will recoup that cost.

“I think where we are now is one big ruse to shifting costs and hiding behind the notion that a company like Verizon will block traffic…What we have to be careful about is not to be trapped into this public-policy debate and forget the fact that there are commercial sets of agreements that need to be established where customers will pay for access and the market has to figure out how to pay for the growth and the building of the backbone.”

“I don’t think anybody wants us to put all of the cost of the backbone network from New York to San Francisco in the DSL rates,” Seidenberg added. “I think everybody that participates in the broadband world needs to participate. It doesn’t mean that there will be a direct charge. What we need to do is let reasonable people sit down and talk about it.”

Seidenberg’s comments suggest that backbone costs could become a more central focus of Bell arguments in favor of “access tiering.” They may also speak to some of the reasons why Google appears to be putting together its own backbone network. And, depending on how things go in the net neutrality debate, the AT&T/BellSouth deal may help move “access network development” a few spots higher on the long list of priorities under development at the Googleplex.

Posted by Mitch Shapiro on March 6, 2006 2:55 PM to IP Democracy