BizJournals Portfolio
Apr 01 2009 2:16pm EDT

Big Bluff From Big Telcos

The feds plan to hand out some $7.2 billion in stimulus grants to companies that will deliver broadband to communities that have none, but Verizon and AT&T are making noises like they won't apply for the money because there are too many strings attached.

That's according to Bloomberg News, and that's hard to believe.

AT&T, Comcast and Verizon -- the nation's largest ISPs -- don't want to have to build networks constrained by so-called 'net neutrality' provisions that would ban them from giving preferential treatment to some services (such as their own streaming video server) over others (such as YouTube).

Congress said the networks had to be open, but left it to the Department of Agriculture and the Commerce Department's National Telecommunications and Information Administration to figure out what openness actually means.

The money being handed out isn't very much for the big operators, though it's simply a bluff for the companies to say they may not be applying for the funds.

They will apply; it's free money, for goodness sake.

The big telcos just want to prove their point -- that they don't want rules attached to their networks ever, even if it's Uncle Sam's dollars that paid for that fiber.

Jealous of billions made by ringtone sellers and search engines, ISPs are tired of just being the transport layer.

So they plan to run their own video services over their network, sell dedicated chunks of it to websites that can afford first-class service, and find other ways to make money with their network besides simply delivering bits to and from other people's computers.


by Ryan Singel for Wired.com


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