Big Telcos Want 2-Tiered Internet

Reported many places, but this comes from the Boston Globe. The core of this is that core network providers, like AT&T and SBC want to be able to prioritize traffic on their networks so that they can offer "premium" services and access (particularly, video on demand). Obviously, content providers such as Google aren't really hip to this plan.

Here is what concerns me: The plan to add video on demand to these Inet offerings is that the increased competition will benefit consumers. My anecdotal evidence is exactly the opposite. I believe that the only time providers drop pricing is when they are changing service types. When VoIP started to threaten tradition phone revenues, they didn't drop prices to compete, they just started to create their own, higher-priced VoIP services while continuing to milk the old sservice customers that aren't savvy enough to have switched.

For example: Through Bellsouth (in my area) unlimited, non-VoIP local and long distance costs about $80.00 a month. The same thing from a VoIP provider costs about $20.00-$25.00. Did this cause Bellsouth to drop the cost of their unlimited-local-and-ld plan? Nope. What they have done is sign a deal to sell Packet8 VoIP service, rebranded as their own, at about 50% higher than if you bought it directly from Packet8. Time Warner, the cable Internet provider in our area also offers VoIP service, what do they charge? $39.95! That's almost 2x what you would normally pay for that service. Why do they charge it? The have an inroad into your house already, and can sell themselves as more reliable, easier to use and so on.

Given that in the 2 cases where I've seen big carriers get into the phone business they have attempted to charge 50-100% more than the established VoIP guys, I have no faith whatsoever that the new services they offer will be any sort of a boon for consumers. Tiered network access is nothing more than a sham designed to allow them to lock out other, competitive providers and extract more dollars out of consumers.