SBC to Internet: We own you

by Mathew on October 31, 2005

Ed Whitacre, CEO of SBC Telecommunications, tells Businessweek magazine that as far as he’s concerned, telecoms and cable companies get to control the Internet:

“Q. How concerned are you about Internet upstarts like Google, MSN, Vonage, and others?

A. 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! or Vonage or anybody to expect to use these pipes [for] free is nuts!”

That’s a nice try, Ed. You may not be the only one to try that kind of thing, but let’s see you try to block access to Skype or Gmail unless someone pays up. And don’t large bandwidth users pay for traffic carried on a cable or telecom network already? SBC’s new business model sounds a little bit like extortion to me. Former Release 1.0 editor Kevin Werbach says we should be afraid. More discussion on the Interesting People list.

Update: The Washington Post has a story criticizing Ed, in which an SBC spokesman does some serious backpedalling on the whole arging-chay for andwidth-bay thing.

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