The New Online Revenue Shake-Down
Bill Gross may be focusing on harnessing solar power these days but the Internet could sure use his creativity. Instead of coming up with new, interesting revenue streams - like Gross' pay-per-click model that jump-started Overture and was later embraced by Google - many of the Internet's leader players are being strategically lazy by slapping new fees on activity that has been traditionally free. In particular, I'm talking about propoed fees slapped on traffic travelling across networks and e-mail. This week both issues were thrust into the spotlight with the introduction of the Net Neutrality Act by Senator Ron Wyden, and the launch of a petition by a coalition to prevent AOL from introducing its controversial e-mail tax. The Net Neutrality Act is an attempt to counter the campaign by broadband service providers such as BellSouth and AT&T to implement downstream tollgates or packet prioritization is a sloppy attempt to recoup revenue they are losing as their traditional local phone businesses erode due to competition from VoIP players. Rather than coming up with new ways to differentiate themselves and generate revenue from offering a variety of access packages to consumers, they have decided to attack net neutrality - a concept that has allowed the Internet to flourish over the past 40 years. On the e-mail front, AOL's “tax” to guarantee e-mail messages are delivered to AOL customers, and not gobbled up by spam filters is a misguided money grab tooffset the decline of its dial-up access business. If you want a two-tiered Internet, tollgates and e-mail taxes are blunt instruments to make it happen. But it's the wrong way to go. If ISPs and e-mail providers want to generate more money, there are better ways to go. For example, ISPs could introduce access packages based on how much speed and bandwidth a consumer wants - something now under consideration according to the Wall St. Journal. This tiered approach is used with great success by BT as a way to give consumers options other than all-you-can-eat plans. Some other revenue opportunities are value-added services such as anti-spam, anti-virus and QoS that can increase ARPU based on consumer choice rather than fees such as an e-mail tax that are arbitrary imposed. Hopefully, these revenue grabs will be defused by the efforts of people such as Senator Wyden, and the Coalition to Stop the AOL Email Tax that includes 50 organizations such as the Electronic Frontier Foundation MoveOn.org and the Gun Owners of America.
