Hurley's World

Many people are commenting about the proposal made by Verizon, Bell South, and other companies demanding that Google pay telecoms money to ensure that users can view their premium content. Such premium content would undoubtedly include Google Video. Many of these same people are calling this a double-dip or a pure money grab, since home users are already paying for their access. However, what many of them fail to mention is that Verizon, and probably a few other telecom companies, are in the process of laying vasts amounts of fiber optic cable across the US, a rather costly proposition. So costly, in fact, that it's doubtful Verizon can afford to pay for these upgrades from subscriber fees alone.

For instance, I pay approximately $30/month for my Verizon DSL service at home. According to the Verizon website, if Verizon fiber optic was available at my home, the cost would just be $5 more per month for the higher bandwidth. This $5 per month would have to pay for the cables, the manhours to lay them, and for the installation and upkeep of the additional equipment necessary to handle this increased bandwidth. I'm hard pressed to figure out how they can do it.

However, they can't pass the costs onto the consumer since most consumers do not need the extra bandwidth, at least not yet. The $35 mark puts them at or below the cost of most cable Internet offerings. They also can't afford to not upgrade their network since DSL is too slow to take advantage of most of the Internet features on the horizon, such as Google Video. So, they decide to develop a product which, from all accounts, beats any offering cable can make, price it at level that most consumers find comfortable, and ask the providers of the next generation of Internet content to make up the difference.

This is why Verizon quietly talked to the Internet heavyweights and why they don't have a great answer to the question of why. Most likely, answering would expose their weakness and most people wouldn't like the answer anyway. They hoped to deflect attention by calling Google a bad guy but didn't realize how integral Google has become in many of our lives. Plus, when they say Google, we don't think about video and other potential high bandwidth technologies, but rather we see Google Search, Google Maps, and other such, largely text-based, technologies.