The House is lost, on to the Senate

A little late, but an update as promised.

The COPE act did indeed pass the House, and the net-neutrality amendment was defeated.

The short of the story is, that several representatives argued that a neutral Internet would pass too much of the cost of building tomorrow’s networks to consumers.

Here’s what I would like to know:
The telecoms companies already charge their corporate customers  like Google and Yahoo, based how much bandwidth they use. If they use on average 50Mbit/s, they pay for that. If they use on average 25Mbit/sec, they pay less.

These costs were determined by the telecoms companies. They already know how much money they need from their customers in order to build these new faster networks.
Smart business owners understand that a part of their profits need to be applied to the upkeep of their establishment. Telecoms companies are no different!
AT&T alone expects to save $600m to $800m because of the merger with SBC late in 2005. Their first quarter profits were also up significantly compared to the first quarter of 2005. They also added over half a million new broadband customers, increasing profits there over 14%.

Since the start of 2003, AT&T’s stock price has remained at a fairly steady ~$26 average price. During this whole time AT&T has been constantly upgrading its infrastructure, so where has this sudden panic over upgrade costs come from?

Think of it this way: When you bought a top-of-the-line computer 5 years ago it could have cost you $2000. A top-of-the-line computer today would also cost you about the same. The same is true of most things, including the cost of building a faster network. The costs AT&T, Verizon and Comcast talk of are actually the cost they would have to invest in their networks anyway as part of their projected growth.
So you can see why a lot of this seems suspicious.

More this weekend…

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