October 31st, 2005
SBC chief: Vonage, other VoIP providers should pay to use our pipes
In a new Business Week Online interview, SBC Telecommunications CEO Ed Whitacre sounds a bit more than forthright about what he sees as his company’s right to demand carrier fees from Internet telephony providers.
Whitacre, whose company will take the AT&T name when, as expected, final approval is granted for SBC to acquire the iconic company, describes a scenario that at least to this blogger, sounds like one in which he will try to force full-fledged VoIP companies such as Vonage as well as PC to PSTN applications from the likes of Google and Yahoo! to pay for carriage rights.
Let us look at what Whitacre’s sold Business Week Online’s Roger O. Crockett.
Referring to prospective as well as existing Internet phone rivals, Crockett asked Whitacre, "How concerned are you about Internet upstarts like Google, MSN, Vonage and others?"
Whitacre answers:
"How do you think they’re going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it. So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes?
"The Internet can’t be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! (YHOO ) or Vonage or anybody to expect to use these pipes [for] free is nuts!"
If SBC/AT&T is able to enforce this regimen, it will obviously play out in terms of access fees that are passed along to you, the subscriber. But not without a fight in and in front of regulatory agencies, Congressional committees, and the media. We’ll be watching, reporting, and telling you what we think.
Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
| 10/31/05
