A conversation with At&t's CEO, Ed Whitacre.
Once again At&t CEO Ed Whitacre is out in front showing how competition friendly At&t (formerly SBC, formerly At&t) is.
�We have to figure out who pays for this bigger and bigger IP network,� said Mr. Whitacre. �We have to show a return on our investments.�
Whoa, hold on there, Skippy. Are you saying that it is not your responsibility to pay for your high-speed infrastructure investments, that you do not have the responsibility of setting pricing structures so that you can achieve ROI from sales to your customers? Who then should foot the bill for your FTTH projects?
�I think the content providers should be paying for the use of the network � obviously not the piece from the customer to the network, which has already been paid for by the customer in Internet access fees � but for accessing the so-called Internet cloud.�
Wait a second! Aren't these content providers already doing this? No, don't answer. I already know they are.
Like every end user, every content provider has to pay for a high-speed connection to the Internet. In fact, unlike your end users who can pay as little as $14.95 a month for T1 (1.5mbs) speeds to the Internet, content providers must pay much higher rates for direct connections to the backbone.
The common rate for a full T1 to the Internet backbone, not some other company, but directly to the backbone will run content providers anywhere from $500-1000 a month. In addition, they must sign multi-year contracts and pay hefty install fees. Worse yet, most content providers can't get by on a meager 1.5 mbps T1, they need DS3s (45 mbps) or OC192s (9.6 gbps) at costs of tens of thousands per month.
�If someone wants to transmit a high quality service with no interruptions and �guaranteed this, guaranteed that�, they should be willing to pay for that,� the AT&T chief said.
�Now they might pass it on to their customers who are looking at a movie, for example. But that ought to be a cost of doing business for them. They shouldn�t get on [the network] and expect a free ride.�
You are killing me. Do you actually here yourself when you speak? You just said, "that ought to be a cost of doing business."
Exactly, Mr. Whitacre, it ought to be the cost of doing business. Thus, if you can not achieve ROI selling DSL for $14.95 per month, perhaps you should consider raising your rates to a sustainable level. Do not ask content providers to foot your bill, content providers already built the cost of their high-speed access into their products and services and so should you!
Have fun,
j
Although this conversation never actually took place, all quotes attributed to At&t CEO Ed Whitacre were his own words.
|
0 people think they have something witty to say about this entry.
