Last updated: February 21, 2008 - 12:37am
[SOURCE: BusinessWeek, AUTHOR: Catherine Yang]
Documents filed with the Federal Communications Commission show that Verizon Communications is setting aside a wide lane on its fiber-optic network for delivering its own television service. According to Marvin Sirbu, an engineering professor at Carnegie Mellon University who examined the documents, more than 80% of Verizon's current capacity is earmarked for carrying its service, while all other traffic jostles in the remainder. Leading Net companies say that Verizon's actions could keep some rivals off the road. As consumers try to search Google, buy books on Amazon.com, or watch videos on Yahoo!, they'll all be trying to squeeze into the leftover lanes on Verizon's network. On Feb. 7 the Net companies plan to take their complaints about Verizon's plans to the Senate during a hearing on telecom reform. "The Bells have designed a broadband system that squeezes out the public Internet in favor of services or content they want to provide," says Paul Misener, vice-president for global policy at Amazon.com. Verizon argues that it needs to take such measures to earn a return on its network investments. The New York giant is seeing steep declines in its traditional telephone market, so it is spending an estimated $10 billion over seven years on new fiber lines to diversify into the TV business. Unless it can deliver seamless, high-quality TV service -- a real bandwidth hog -- Verizon says it won't be able to compete against Comcast and other cable rivals. We "give consumers choice for video services," says Verizon Executive Vice-President Thomas J. Tauke. At issue is what the Internet of the future will offer. Critics of the phone industry say the Net has flourished because innovators anywhere could reach consumers just as easily as deep-pocketed corporations. But if Verizon and AT&T set up tolls and express lanes, upstarts may not be able to afford the fees. "If you deliver video the way Verizon does now, that makes it very hard for others to compete," says Carnegie Mellon's Sirbu.
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