When I first read these comments I was stunned that there wasn’t much of an outrage because it appears to be outright extortion from the head of a public utility.

Ed Whitacre, AT&T’s chairman and CEO, appears to advocate extortion as a marketing and business policy in this Financial Times article.

Extortion? Talking about Google and others, Whitacre says, “

I think the content providers should be paying for the use of the network – obviously not the piece from the customer to the network, which has already been paid for by the customer in Internet access fees – but for accessing the so-called Internet cloud…”

What’s that mean? He wants Google and other sites that use a lot of bandwidth to pay for that bandwidth. Again.

Here’s how it works. You sign up to get on the internet with the local internet service provider, or the phone company, or the cable company. They, in turn, connect you to the rest of the internet.

Up front, you’ve paid to access whatever exists wherever it exists on the internet. The phone company makes profit on those connections.

Guess what? Google does the same. They buy bandwidth from bandwidth providers (a phone company of sorts) that allow their servers to connect to the internet, so you can google Google.

Whitacre wants Google and other “content providers” to cough up more money. They’re already paying the phone company (bandwidth providers) to access the internet. AT&T wants them to pay again.

Paul Taylor writes, “

While they have emphasised that they are not seeking to charge additional fees for content and other services delivered on a ‘best effort’ basis, they argue that content providers seeking guaranteed delivery of high quality content should be willing to pay.”

Hmmm. That sounds like quality of service, which, in this case is a politically correct term for extortion. If you want connection to the internet, here’s the price. If you want it to work all the time, there’s another price for that.

How is that different than the “insurance” (Quality of Service) sold by the Sopranos?