ISPs are Standing in the Way of Internet Content Providers

Jun 25, 2013 8:40 AM, By Doug Irwin, CPBE DRB

I’ve speculated in various pieces that I’ve written over the last few years as to whether or not radio delivered via the Internet will ever supplant over-the-air. I’ve always said “no” because I believe that, while Internet radio will continue to gain in popularity at the expense of O-T-A, an equilibrium point will be reached in that Internet radio usage will plateau, and OTA usage will stabilize. The reason behind that is the cost of delivering radio via the Internet. A few articles I’ve seen this last week back up my premise. Let’s take a look at these.

First, an article in GigaOM talks about how local ISPs (last mile providers) are starting to push back at content providers, expecting them to pay for network upgrades. From the article (the added emphasis is mine): “They (ISPs) see their pipes becoming commodified — dumb, as it were. So they want to build a new Internet model: one based on terminating traffic that looks a lot like the old-school telephone networks, where ISPs serving the last mile can charge content companies and bandwidth providers for upgrades they make to the network in order to carry the increase in traffic. The point of connection and negotiation has become the ports where traffic hops from the bandwidth providers onto the ISPs’ network.”

I don’t need to tell you this means that content providers that succeed will find themselves being pressured to pay for access to the end users, at least indirectly. The end-users will end up paying then — at least until they switch to the newest, trendiest content provider — one that starts its business life under the radar.

And speaking of last mile providers wanting to charge end-users more, take a look at this article from the Huffinton Post. It seems that Verizon and AT&T, which have a 65 percent market share of the U.S. wireless market between them, aren’t getting enough money out of you. “Because fewer new customers are signing up for wireless plans, giants like AT&T and Verizon are looking everywhere they can for additional revenue, which means charging their existing subscribers more … only 1.1 million new wireless accounts were created the first three months of 2013, according to the report from Chetan Sharma Consulting, a firm that specializes in mobile trends and strategy. This represents a whopping 60 percent decline over the number of new connections in the same quarter of 2012. That’s a huge problem for the wireless industry, which thrived in previous years as new customers signed up for mobile subscriptions.”

I’m not trying to add insult to injury but evidently at least one large ISP has decided not only to charge you for access to the Internet, but to share your access with others. From another article in GigaOM, we learn that Comcast is going to start sharing your broadband connection for you. New Cisco cable modem/wireless access points are being shipped to customers, and they accommodate two wireless networks: one for the people that actually pay for the access, and one for all other Comcast customers. “Many Comcast customers might bristle at the idea of letting other people use their broadband connections even if their traffic is kept separate and their own connections are secure. What most people deal with today is plentiful and cheap bandwidth at home and at work but expensive and limited bandwidth everywhere in between. If everyone teamed together to share their broadband with one another, then everyone suddenly starts getting solid connections wherever they go.” 10 years ago this was called war-driving and was most definitely frowned upon by Cisco. And, of course for the everywhere in-between part, we can rely on Verizon and AT&T to take care of us, right?

Radio stations have unfettered access, under their control, to provide content to the end-users. We need to do everything we can to maintain those facilities and relationships with our customers. We can’t simply let third parties (the Verizons and AT&Ts of the World) get in the middle and expect them to see to our best interests.

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