The high-stakes bun fight between Vonage Canada and Shaw Communications has all the drama of a family squabble over a big inheritance.
There are the whining siblings - Vonage, the huge vendor of voice over IP (VoIP) telephone service, and Shaw, a major Internet service provider (ISP).
There's the powerful if sometimes doddering patriarch, the Canadian Radio-television and Telecommunications Commission, (CRTC), who may or may not remember them in his will.
Then there's the grandkids - small business and home users - who just want to keep on using their phones in peace at the lowest price possible.
And, in a CSI Miami-like touch, there's plenty of dispute over the evidence.
Shaw has advised its high-speed Internet users that they can "improve the quality of Internet telephone services provided by third-party providers" by volunteering to pay a $10 per month "quality of service" fee.
But Vonage Canada vice-president Joe Parent calls that a thinly veiled VoIP tax and "an unfair attempt to drive up the price of competing VoIP services to protect its own high-priced service."
Last week, Vonage Canada cried foul to the CRTC. In response, Shaw CEO Jim Shaw issued a news release calling the Vonage claims "wrong and misleading.”
Vonage fired back, claiming Shaw was "regurgitating" vague information.
Like any good drama, there are some plot twists and turns. Shaw does indeed have a phone service that competes with Vonage and charges considerably more ($65/month or $55 if you take other Shaw services) than Vonage's $39.99 for comparable features.
But, as Shaw president Peter Bissonette explains, Shaw's service is qualitatively different because it does not use the public Internet, which is subject to traffic delays.
Hence, Shaw digital phone customers don't need to pay the $10 quality of service (QoS) fee. Oh, and in a marketing push, Shaw is now offering its product for $29.95 for the first three months and throwing in 1,000 minutes of international calling, for which Vonage charges up to seven cents a minute.
Parent says Shaw has not disclosed exactly what you get for that $10 a month. In a December 2005 letter to the CRTC, Vonage raised questions about Shaw's claim of enhanced VoIP service and its justification for a recurring change "that appears may consist of a one-time configuration of the Shaw-approved cable modem used by the customer."
The Shaw/ Vonage battle is just an opening salvo in a war over "net neutrality" - the idea that all data packets should be treated equally, more or less, on the Internet.
Many experts feel that governments should enshrine that principle through regulation. Big ISPs like America Online are chipping away at net neutrality by offering, for a fee, to slip certain e-mails past their spam filters while trapping mail from non-paying competitors. Some packets are already more equal than others.
On the flipside, e-commerce biggies such as eBay and Amazon - not to mention VoIP companies including Vonage - are raking in profits using the infrastructure of Canadian ISPs such as Shaw and Telus, as well as their American counterparts, such as Comcast and SBC (now part of AT&T). The ISPs reason that they're doing a lot of the work and should share in the gravy.
AT&T CEO Ed Whitacre, the former chief exec at SBC, took specific aim at Google. He was quoted in Business Week Online saying, "what they would like to do is use my pipes free, but I ain't going to let them do that."
This conjures up visions of an ISP sending some packets into a needless holding pattern if a company doesn't pay it for "quality service.”
This sounds like telling a South Bronx shop owner that a lot of windows are getting broken in his neighborhood, but for $25 a month, none of his windows will be touched.
Joe Parent doesn't know if Shaw has the gear to actually do this. "I'm not even sure if they can tell what traffic is VoIP."
Industry sources in New York confirmed that while traffic discrimination is possible, it's an expensive proposition to implement.
One expert, who asked to remain anonymous, even outlined a strategy for making the true nature of Internet traffic virtually invisible to Shaw, as he put it, "if you really want to play hardball with them."
Shaw officials did not return calls about the $10 charge, but a Shaw customer-service representative transferred me to the technical support department. And that person told me that "you get more bandwidth, so it stabilizes your voice over IP service," but couldn't really explain why having a 7.0 Mbps download speed was any better than 5.0 Mbps (which you get without the $10 fee) given that VoIP packets require far less bandwidth than those numbers suggest.
Luminaries such as Vinton Cerf, "the father of the Internet" who now works for Google, testified recently on behalf of net neutrality before a U.S. Senate committee. Cerf said that nothing less than the future of the Internet is at stake, and that "we need to preserve net neutrality for the interests of the next Google waiting to be born in some dorm room or garage."
Arrayed on the other side are experts including law professor Christopher Yoo of Vanderbilt University, who argues the "the term network neutrality is something of a misnomer (because) adoption of any standardized interface has the inevitable effect of favouring certain applications."
Yoo sees no need for government regulators to enforce net neutrality. The Center for Digital Democracy calls Yoo's report "a love letter to the monopolists of the cable industry" and notes that it was funded by the National Cable and Telecommunications Association.
The net-neutrality debate is not going away, because it pits Big Telecom against Big Business in what both see as a zero-sum game. For the consumer and small business user, the competition will mean deals aplenty, at least in the short term.
And if you think the bickering is bad over VoIP, wait until the real family jewels of the high-speed Internet, including video service, are brought out of the closet.
(Tom Keenan is a professor at the University of Calgary and an expert on technology and its social implications. He can be reached at keenan@businessedge.ca)
