AT&T chief says that people are only paying for half the Internet
AT&T CEO Ed Whitacre has made a name for himself by making loud and repeated pronouncements about how people and companies are not paying enough for Internet access. First, there was the infamous "our pipes" comment, made last year as a warning to VoIP providers.
Context & Ripple Effects
Ed Whitacre's rhetoric has been escalating for months. In November 2005, bloggers urged consumers to boycott SBC's DSL service over his stance, and by December AT&T and BellSouth were confirmed to be lobbying Capitol Hill for the right to run a two-tiered Internet in which their own services transmit faster. The 'our pipes' warning to VoIP providers came first; the claim that users are paying for 'only half' of the Internet is the next rung on the same ladder.
The framing matters because it converts a pricing grievance into a policy argument: if content companies are underpaying for the network, carriers deserve the right to charge them directly — exactly what the BellSouth-AT&T lobbying push seeks. A rumored AT&T bid for EchoStar remains unconfirmed speculation, but it hints at the same bundle-everything-through-our-pipes instinct.
First-order effects
- VoIP providers and other edge services face renewed public pressure to pay carriage fees, after Whitacre's earlier 'our pipes' warning made clear AT&T sees their traffic as an unpaid ride.
Second-order effects
- Consumer backlash is already organized — the November call to shun AT&T's DSL shows the carrier risks subscriber defections even as it lobbies with BellSouth for legal cover on tiering.
Third-order effects
- If the half-the-cost framing wins in Congress, the Internet's pricing model shifts from one bill per user to tolls at both ends, forcing every edge service into carriage negotiations with access providers.
The trend: Broadband incumbents are asserting ownership of the network layer and pushing paid prioritization from CEO rhetoric into national telecom policy.