Mark Cuban and the Chicken Little Netheads

Who will deliver me Video on Demand?

Net Futures Do Martians pay late fees? And why, in 2006, do Earthlings need to go to Blockbusters in the rain?

These are questions we need to bear in mind as background to one of the most contentious debates in US telecommunications policy today.

Our visiting, hypothetical Martian would be astonished to discover that with so much cable running under our streets, and popular entertainment already in digital formats, we must still trudge out and seek from a dowdy selection of physical product. Even Netflix requires a trip to the PO Box. Popular culture is brought to the home today inside a Macintosh raincoat, not a Macintosh computer.

The technical reason for this is because the internet is lousy at delivering video, of course. However, the latest attempt to alleviate this stupidity, and add a premium overlay for delivering high quality video quickly over IP, and so enabling the celestial movie jukebox, has caused great alarm. It's going to be introduced on networks such as AT&T Lightspeed, and Verizon's fibre Fios offering. But the prospect of VoD doesn't appeal to everyone.

"This is horrendous," is how former San Jose Mercury columnist Dan Gillmor described the idea recently.

"It's a threat not just to Citizens Media (sic) but to democracy itself."

What a pity that this important debate has degenerated into such hyperbole, and is now accompanied by irrational, sky-is-falling hysteria. There's also more than a hint of snobbery here, for internet people have never been comfortable with the idea of popular culture. Why, one may ask, should new forms of delivery of popular culture take a backseat to some strange technical abstraction - and a communications infrastructure that suits the internet bloggers - largely white, middle-class and media literate - at the expense of blue collar tastes.

It's a pity indeed, for there's a very rational case for concern here.

In recent years the Baby Bells, the incumbent owners of the physical infrastructure we use, have largely written regulatory policy to suit themselves. Just as the small family store is now a rarity, the death of the independent ISP is surely now only two or three years away. The "Bellheads", as Professor Rob Frieden of Penn State University characterizes them, are investing heavily in fiber capability which will solve a problem that the "Netheads" have proved themselves unable or unwilling to tackle, that of high quality video over IP.

So the Baby Bells have the pipes, are investing in improving them, and now want to monetize those investments. With an increasingly vociferous chorus led by AT&T, and former SBC boss Ed Whitacre, multi-tier pricing looks set to be introduced. At a premium, low latency guaranteed delivery service agreements will allow new applications - perhaps applications that save us a trip to Blockbuster in the rain - to be introduced.

Whitacre reiterated his case again this week:

"If someone wants to transmit a high quality service with no interruptions and ‘guaranteed this, guaranteed that’, they should be willing to pay for that,” he told the FT “Now they might pass it on to their customers who are looking at a movie, for example. But that ought to be a cost of doing business for them. They shouldn’t get on [the network] and expect a free ride.”

The dangers of AT&T abusing this, however, are immediately apparent. What's to stop a vertically integrated infrastructure provider deprioritizing every one else's traffic?