Google, in particular, has termed this practice "cyberextortion."
Less inflammatory, but no less damning, critics have accused the telecoms of wanting to be "gatekeepers" of the Internet, or "toll booths" on the "information superhighway," impeding the free flow of ideas and innovations.
How, they ask, could a start-up company ever hope to compete with, say, a Google, which could afford to spend far more on getting priority service on the Internet? Who would use a new search engine, no matter how good, that took ten seconds to return a result that took only a second on Google?
In effect, the critics contend, the telecoms -- and not a competitively free market of ideas -- would be picking the winners and losers on the Internet, the winners being not only those who paid the most but also those with whom the telecoms had a working relationship (such as a subsidiary or sister company within a conglomerate). Internet phone companies would be particularly vulnerable to "discrimination," as some have called it, by rival telephone companies being allowed by law to charge more for some than for others to use their systems.
The fundamental question is, shall the Internet be turned into a system like that of cable television, in which the content producers must pay to have their content transmitted, in addition to the fees paid by the end-users to have the content received? Or will the dissemination of information on the Internet continue to be free? And how would all that impact personal websites and blogs? The implications -- for society at large as well as for the economy in particular -- are as staggering as the power of the Internet itself.
Currently, the popular demand is for continuing "network neutrality" -- perhaps with some accommodations for extraordinarily large transmissions -- but telecom companies, and perhaps cable companies, are thought by some to already be working out deals behind the scenes for preferential treatment of various content providers.
Consumers and Workers
Both residential and business consumers of telecom services can expect to be bombarded with press releases, advertising, and other corporate communications from the new AT&T regarding the BellSouth merger -- perhaps in addition to the half billion dollars AT&T is spending this year acclimating its customers to the recent acquisition of AT&T by SBC, which took the more famous brand name of its purchase.
Just as the SBC-AT&T deal was by almost all accounts a "good fit" -- AT&T bringing with it long-distance; SBC, local -- the AT&T-BellSouth merger also makes sense on paper -- the two systems compete very little for local or Internet customers, and they own Cingular Wireless together: At least initially, customers of AT&T, BellSouth, and Cingular should experience little if any change from the deal.
It is in the long run that the impact is more debatable.
Speaking on behalf of the combined AT&T and BellSouth, for which he would serve as chairman and CEO, current AT&T Chairman Edward E. Whitacre Jr. has said, "The merger ... will benefit customers through new services and expanded service capabilities." The plan is for the company's increased size to help hold down costs -- as with those layoffs mentioned above and other economies of scale, saving some $2 billion to $3 billion a year -- which may allow the new AT&T to undercut the prices of the cable and satellite companies, particularly for the television programming AT&T is beginning to deliver.
Speaking on behalf of consumers, Gene Kimmelman, policy director at Consumers Union, publisher of Consumer Reports magazine, has been quoted as saying that the merger "will lead to the end of the era of falling prices for telephone and cellphone service."
In addition, fees for Internet service may rise, particularly in areas with limited high-speed choices and perhaps with the introduction of a "tiered" system of fees for content providers (as discussed above), probably ultimately passed on to consumers.
Regulators and Legislators
Mark Cooper, research director of the Consumer Federation of America, has been reported as saying, "Telecommunications has now gone from a regulated monopoly to an unregulated duopoly with just two major players. Consumers know that is not enough competition to lower their prices and drive innovation."
Moreover, Janee Briesemeister, a senior policy analyst of the Consumers Union, has said, "The track record of the baby Bells since the passage of the Telecommunications Act of 1996 shows a persistent pattern of bad acts, broken promises, and a failure to compete."
Less inflammatory, but no less damning, critics have accused the telecoms of wanting to be "gatekeepers" of the Internet, or "toll booths" on the "information superhighway," impeding the free flow of ideas and innovations.
How, they ask, could a start-up company ever hope to compete with, say, a Google, which could afford to spend far more on getting priority service on the Internet? Who would use a new search engine, no matter how good, that took ten seconds to return a result that took only a second on Google?
In effect, the critics contend, the telecoms -- and not a competitively free market of ideas -- would be picking the winners and losers on the Internet, the winners being not only those who paid the most but also those with whom the telecoms had a working relationship (such as a subsidiary or sister company within a conglomerate). Internet phone companies would be particularly vulnerable to "discrimination," as some have called it, by rival telephone companies being allowed by law to charge more for some than for others to use their systems.
Currently, the popular demand is for continuing "network neutrality" -- perhaps with some accommodations for extraordinarily large transmissions -- but telecom companies, and perhaps cable companies, are thought by some to already be working out deals behind the scenes for preferential treatment of various content providers.
Consumers and Workers
Both residential and business consumers of telecom services can expect to be bombarded with press releases, advertising, and other corporate communications from the new AT&T regarding the BellSouth merger -- perhaps in addition to the half billion dollars AT&T is spending this year acclimating its customers to the recent acquisition of AT&T by SBC, which took the more famous brand name of its purchase.
Just as the SBC-AT&T deal was by almost all accounts a "good fit" -- AT&T bringing with it long-distance; SBC, local -- the AT&T-BellSouth merger also makes sense on paper -- the two systems compete very little for local or Internet customers, and they own Cingular Wireless together: At least initially, customers of AT&T, BellSouth, and Cingular should experience little if any change from the deal.
It is in the long run that the impact is more debatable.
Speaking on behalf of the combined AT&T and BellSouth, for which he would serve as chairman and CEO, current AT&T Chairman Edward E. Whitacre Jr. has said, "The merger ... will benefit customers through new services and expanded service capabilities." The plan is for the company's increased size to help hold down costs -- as with those layoffs mentioned above and other economies of scale, saving some $2 billion to $3 billion a year -- which may allow the new AT&T to undercut the prices of the cable and satellite companies, particularly for the television programming AT&T is beginning to deliver.
Speaking on behalf of consumers, Gene Kimmelman, policy director at Consumers Union, publisher of Consumer Reports magazine, has been quoted as saying that the merger "will lead to the end of the era of falling prices for telephone and cellphone service."
In addition, fees for Internet service may rise, particularly in areas with limited high-speed choices and perhaps with the introduction of a "tiered" system of fees for content providers (as discussed above), probably ultimately passed on to consumers.
Regulators and Legislators
Mark Cooper, research director of the Consumer Federation of America, has been reported as saying, "Telecommunications has now gone from a regulated monopoly to an unregulated duopoly with just two major players. Consumers know that is not enough competition to lower their prices and drive innovation."
Moreover, Janee Briesemeister, a senior policy analyst of the Consumers Union, has said, "The track record of the baby Bells since the passage of the Telecommunications Act of 1996 shows a persistent pattern of bad acts, broken promises, and a failure to compete."
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