Time Warner Cable CEO Glenn Britt today came very, very close to saying that his company will charge access fees to third-party Internet content and application providers for their use of Time Warner Cable’s broadband networks. Speaking at Goldman Sachs’ Communacopia Conference, Britt spent much time discussing the issue of network neutrality and said “I think we are going to have to explore different ways of charging” for the costs of the network, shifting some of the burden away from consumers and toward Internet content providers such as Google and Yahoo!.
“Unless we find some way to manage that traffic, and potentially charge for prioritization, this whole Internet phenomenon will come crashing down,” Britt said. He clearly believes that the push for net neutrality regulation is coming from a handful of big companies that are seeking special favors from Washington.
A few large companies, who used to be start-ups, have decided that the prospect of having to pay for differentiated traffic is a scary thing and they’re going to Congress and saying ‘Gee Mr. Congressman or Mr. Senator, now is the time to regulate…the Internet. But don’t regulate me.’
Britt, who is one of the sharpest people in the cable industry and is regarded as a top-notch executive, seemed to get caught in an uncustomary bind when asked by one of Goldman’s analysts whether capital expenditures would rise as a result of all this new investment he said Time Warner would have to make. Britt had prefaced his discussion on network neutrality by saying “in order for the Internet to keep up with it [growing bandwidth consumption]…it’s going to require investment” and therefore someone has to pay for the investment.
But…when asked how much Time Warner Cable would have to “invest” to deliver ever-increasing amounts of speed, Britt said “we have a road map to get to as fast a speed as anybody is talking about at this moment. That’s not a capital issue. It’s an evolutionary issue.”
Then…he added an interesting clarification that doesn’t make sense to me. “The issue with net neutrality is throughput. It’s not how fast you get it but how much of it you get,” Britt said. OK, well, aren’t speed and capacity pretty much the same thing?
Cynthia Brumfield at 4:34 PM|Comments(1)
A lot of what is coming out of the Cable operators doesn't make sense these days. There is a strong argument that the Internet (access) should be a regulated and mandated utility for all in the US. The cable operators are enjoying huge margins on broadband access and they fight hard to maintian those margins. Never wavering on price, never lowing lowering charges. CableCo's try to compete with higher throughput (that isn't gaurenteed) and that is how they justify the high prices.
If Verizon would throw everything they had at Fios and AT&T would get their act together, they really could make this problem (i.e., speed, consumption, access, and neutrality) go away for the next few years. If you look at those markets where Fios is deployed, you will find that cable operators have boosted capacity on the network; and consumers have sometimes got lower prices!
Explain that Mr. Britt.
Posted by: andrew at September 20, 2006 1:14 PM
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