Get Ready To Pay More For Using The Internet

Indeed, while arguing that Google shouldn't have to pay broadband providers a Web toll, Internet pioneer Vinton Cerf told the Senate Commerce Committee Tuesday that telecoms and cable operators should look to their own customers to recoup the costs of providing high-speed services.

"These companies can charge their own customers whatever they want, in order to make back their investments," Cerf, who works for Google, said in his prepared statement to the panel, which is hearing testimony on the debate. "Trying to extract additional fees from Web-based companies -- who are not in any way 'customers' of the provider -- would constitute a form of 'double recovery.'

"Google takes no issue with the broadband carriers' ability to set prices for Internet access that compensate for the costs and risks associated with their network investments."

The debate involving industry titans revolves around the concept of "Internet neutrality." Web companies such as Google, Yahoo and Microsoft MSN don't want to be charged for the increasing amount of bandwidth their services require, particularly as the companies launch video and Internet telephony services. They claim that all data should be allowed to flow democratically, and no content should get to use the fast lane because providers can pay a toll.

Companies such as AT&T, Comcast and other high-speed providers argue that Internet companies that need more bandwidth should pay for it, particularly companies offering bandwidth-hogging video and phone applications. As AT&T Chairman Edward Whitacre noted in a Business Week interview in November, for "anybody to expect to use these pipes (for) free is nuts!"

Multi-billion-dollar companies like Google suggesting that consumers should pay more for the bandwidth required to receive better services is sure to rankle many people. But industry analysts say no matter which side gets its way, any additional costs will be passed along to consumers.

"It's just a matter of who's bill you end up seeing this on," Joe Laszlow, analyst for JupiterResarch, said.

For the last couple of years, broadband providers have been offering multi-tiered pricing for high-speed service, with introductory prices as low as $13 a month. While broadband service in general isn't expected to cost much more, cable operators and telephone companies will certainly be charging more for accessing the services moving over their pipes. What ever they don't get from Internet companies would certainly be wrapped into customers' bills.

"One way or another, it's going to get pushed out to the consumer," Erik Keith, analyst for Current Analysis, said. "Revenue generation is going to have to come from the end user."

The same is true of Internet companies, if they pay more for delivering content, then the cost will have to be made up either through advertisers, consumers or both.

"Some one ends up paying here," Laszlow said.

So no matter what action Congress takes on regulating the use of the Internet by industry behemoths, customers will have to pickup at least a portion of the tab if the cost for either side goes up.