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Telecoms Looking to Restructure Internet Fees

Telecoms Looking to Restructure Internet Fees

by , 9:30 AM EST, March 2nd, 2006

Telecommunication companies are looking for alternatives to the current flat-rate broadband Internet fees users currently pay. According to The Wall Street Journal, the companies are eying alternatives that charge customers based on how much Internet bandwidth they use.

One concept involves a "pay as you go" service where users pay one rate for Web surfing, and a higher rate for more bandwidth-intensive activities, like streaming video. Phone companies are also discussing ways to charge customers for premium delivery of services, meaning Web content will be delivered faster from sites that are willing to pay extra fees to the carriers.

Although the new pricing schemes are still in the early concept phase of development, Internet Service Providers and consumer groups are voicing their concerns. They fear that changing the flat-fee pricing structure will create what amounts to a caste system on the Internet. Users that can afford more content will pay for it, and those that can't will do without.

Currently, anyone that can afford an Internet connection, regardless of their connection speed, has access to all of the available content.

Another idea that appeared recently came from AOL and Yahoo!. These companies are discussing charging legitimate bulk emailers a fee to guarantee that the emails they send are delivered to their customers. Although the fees would be limited to bulk emailers, some fear that it could lead to a per message "email tax" for any messages that are sent to AOL subscribers.

So far, cable companies aren't considering new Internet pricing structures. The companies that make the equipment that supports the Internet infrastructure, however, are. Cisco, Lucent, Ellacoya, and others are promoting new devices and pricing ideas to the telecoms and ISPs.

Some Internet companies are openly speaking out against the idea. Vonage spokesman, Chris Murray, commented "It's such a significant departure from the way the Internet works. It's exactly the opposite of the Internet model."

Mark Cooper, director of the Consumer Federation of America, agrees "The minute you let the phone companies decide which services are available, you've killed the Internet."

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