Wednesday, December 21, 2005

Proposed U.S. Broadband Legislation Poses Challenges to Content Providers

CNET News covers proposals for new U.S. legislation backed by major broadband Internet access providers to charge varying rates for varying types of traffic. This is a move which is meant to increase the ability of major ISPs to pave the way for more profits as video programming, IP telephony and other streaming media begin to gear up for Web delivery. While some of the proposed legislation (PDF) provides good basic regulatory reforms in light of the merging of telecommunications, television and Web marketplaces, it also sets the stage for ISPs trying to move from Internet access being a neutral commodity to a service that will have tiered pricing for different levels of access quality for content providers. Given the bandwidth-intensive requirements for streaming video and other content sources reliant on high bandwidth services there's perhaps more than a grain of sense to this proposal. But it also may wind up deterring the market penetration of these services as content providers find themselves having to wrestle with a new layer of commercial arrangements that may have to be onpassed to their audiences in one form or another more directly.

Given that multimedia services are an increasingly important element for premium content providers maintaining and accelerating their market penetration the need to deal with premium communications fees is likely to slow that penetration, and hence slow the development of services. This may be good for major ISPs intent on creating their own video and phone services, hence their push. It also may tend to put a drag on other types of publishers that find themselves having to pony up to have performance that's on a par with their competitors in an escalating ISP fee war. Publishers of all kinds would be wise to look at this potential legislation carefully and to consider how their own lobbying efforts may need to be accelerated to ensure that they are not going to find themselves grabbing the short end of the available bandwidth. While it's important to make sure that there's adequate funds for building out broadband facilities it's probably best to have those funds come from more intelligently scaled user access fees that allow them to choose the quality of overall performance that suits them best.
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