NetMyth: Internet companies are “free riders”

NetFact: Internet companies collectively pay billions of dollars per year to network operators for Internet connectivity and transport. That money fully compensates the network operators for their network investment. The Internet companies separately spend billions of dollars more for Internet backbone capacity, much of which goes to the telephone companies as well, now the Internet backbone market has also been consolidated due to the Bell mergers with AT&T; and MCI.

Overall, the four Bell companies alone make some 14 billion dollars annually in revenues from selling special access services to Internet content and applications companies, Internet service providers, and other corporate and institutional users of the local network. FCC figures show that this is a highly lucrative business, with returns over 50 percent. All of this return is in addition to the 20 billion dollars a year in fees that subscribers pay network operators for broadband access to the Internet.

* Remember: The reason why consumers spend all that money for broadband access is to reach the rich and compelling content, applications and services that Internet companies spend billions of dollars to create, develop and deploy.

Net Neutrality Matters. Protect the Open Internet.