Bandwidth Wars Heating Up
US Telecoms firms are now considering charging content providers for providing users with bandwidth intensive content.
The TimesOnline reported recently that US telecoms giants are considering charging Internet companies for broadband delivery of bandwidth intensive applications.
“US telecoms giants, including BellSouth and Verizon Communications, want to levy fees on internet services such as Google for broadband delivery of music and film downloads as well as other “bandwidth-heavy” applications over their telephone networks.” reports TimesOnline.
In the UK the picture is somewhat different, and BT has been warned of strong resistance if it considers a similar move.
Bandwidth is certainly not an inexhaustible resource, but it is debatable whether content providers should be held partly responsible for network upkeep over and above the standard bandwidth charges.
The Internet is fuelled by content, and broadband uptake is reliant on the availability of multimedia and other bandwidth intensive applications that will validate the investment.
It is often the availability of bandwidth intensive content which convinces consumers to invest in broadband, but it is unlikely that these internet companies will see any of the profits from the telecoms firms.
In South Africa Telkom has a much easier ride. The cost of bandwidth to local ISP’s is currently so high that many website owners have no choice but to host their websites internationally.
Furthermore, Telkom charges broadband consumers on a usage based system, which means that they have to pay high fees when making use of bandwidth intensive applications.
In the local context it means that content providers are hesitant to develop and provide bandwidth intensive content or applications, while consumers are counting their bits and bytes which is not good news for the South African Internet as a whole.
Local hosting companies are also losing out to their cheaper international counterparts.
Telkom is afforded the luxury of charging exorbitant rates through government’s reluctance to allow self provisioning or introduce true competition in the telecoms arena. International telecoms companies however do not have the same priviledge.
If the telecoms giants push their prices up too high it will make financial sense for companies like Google and Yahoo to develop and use their own infrastructure.
There is already speculation that Google are making plans to head in this direction. Google want to develop their own global fiber network, which must be of some concern to the traditional telecoms companies.
Whatever the outcome of this bandwidth squabble, consumers will most likely come out tops in the competitive US environment.
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