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Verizon Communications Inc
How do you know a telecommunications executive is misleading you? When he’s trying to invent a new phrase. ”Overbuilds,” for example, is how cable and telephone incumbents refer to new attempts to provide Internet infrastructure that might compete with what they’ve already built. “Spectrum crunch” is another artistic license that wireless companies have adopted, to spread a sense of doom about what might happen if they don’t get their way on spectrum allocation. Comcast (CMCSA) refers to its Web access as “Xfinity.” AT&T (T) calls its Internet access “U-Verse.” Verizon Communications (VZ) doesn’t sell Web access, either. It sells “Fios.”
Though each uses different technology, there is no functional difference among the services. Imagine you want to buy copy paper, but all the companies that sell copy paper have painted different-colored glossy stripes on their copy paper, upped the price, and informed you that they don’t sell paper. They sell “KopieTek,” “Paprfi,” and “ReamStream.”
Now Comcast would have us accept the phrase “public Internet.” Today the Wall Street Journal reported that the Justice Department is investigating whether cable companies are attempting to quash online video services through creative pricing. Basically, cable providers have introduced bandwidth caps that limit the total amount of data a customer can download each month. The providers say they need to do this to reduce congestion on their networks, although limiting total downloads in a month does nothing to prevent congestion during the video traffic peak in the early evening. Then in March, Comcast revealed that videos on its Xfinity app on Microsoft’s (MSFT) Xbox will be exempt from the cap.
From the Journal article: “Xfinity, [Comcast] says, is unlike Internet video services like Netflix because it travels over Comcast’s own private network and not the public Internet. “We have consistently treated all video carried over the public Internet the same whether it comes from our sites or anywhere else on the public Internet,” the company said in May. Nevertheless, it announced then that it would suspend its data caps and start testing a new system that would allow heavy users to pay for more data.”
Comcast suspended its caps, so this sounds like a concession, right? The company is playing the long game. It wants to change the way we think about the Web. If it succeeds, it can do whatever it wants because its “private” Internet is private property, and what Locke-inspired society doesn’t respect that?
So let’s walk through what is “public” and “private” about Comcast’s Internet access. Comcast owns a mixed optic-fiber and copper network that runs to most homes in the areas where it operates. The copper in this network was built through monopoly franchise agreements that it secured, county by county, during cable build-outs 20 and 30 years ago. So the coaxial cable that brings the Web—sorry, “Xfinity”—to its customers was financed after securing exclusive easements from local governments. This is true for all cable providers. The genesis for Comcast’s “private” Internet was a public/private collaboration.
So Comcast failed to invent the Internet. There’s nothing wrong with this. The old AT&T failed to invent the Internet, too, as did the parts of the old AT&T that are now called Verizon. Seriously, no foul here. Almost everyone failed to invent the Internet. But now the Internet, a public network that beat other, competing private networks because universal accessibility and packet neutrality turned out to be as important as growth and revenue generators, is a massive public subsidy for any company lucky enough to own a network in 1995. Comcast was perfectly free to build the Comcasternet, but it did not. And that’s not an accident. Every network does better when all networks interconnect. Had Comcast attempted to create an Internet alone, on its “private” network, it would have failed.
To be fair, Comcast has invested in network upgrades to handle Web traffic, replacing a lot of copper with fiber. But while it was doing that, it was collecting handsomely on a completely new service that suddenly all of its old subscribers wanted: Internet access. Having made those investments, supported by a revenue stream it did not create, Comcast has now decided that its new-ish network is no longer the Web. It is Xfinity and it is private. If Comcast wants to run Xfinity video over Xfinity faster than everything that is not Xfinity, that’s just tough luck for the rest of the “public” Internet.
Or—as the rest of us should continue to call it—the Internet.