I was reading an article by CBC news in Canada this morning that struck a rather prophetic chord. Vonage is protesting an additional fee that Shaw Communications has stated it will start charging any customers who use VoIP over one of the Shaw networks. The $10 additional fee for ‘quality of service’ would, Vonage states, amount to a tax on VoIP and would amost certainly pave the way for Shaw Communications to offer its own VoIP services to consumers at more attractive rates.

This is very similar to a hypothetical situation being argued about in the US Congress right now, with the fear that if some sort of net neutrality is not ensured, ISPs would begin to charge competitors to use their services, thereby effectively blocking out competition.  With lines in the US recently deregulated, allowing the big Telcos to charge whatever they want to ISPs who want to have direct access to the consumer, this would create a market in which the Telcos and Cable companies would be the only ISPs able to effectively compete in the market.

AT&Ts recent acquisition of Bellsouth leaves only 2 actual Telcos left in the US with direct access to consumers — AT&T and Verizon. Anyone else who wants to have access to the consumer at home must pay trillions of dollars to create an infrastructure (which, in many states, is not allowed), or has to pay whatever the Telcos want to charge in order to rent access to the lines already in place.

If you add, on top of that, additional charges to run services over those lines to ensure a ‘quality of service’ for the consumer, then it means that one way or another, the consumer is going to have to pay a lot more either to the Telcos or to the service providers, and the number of companies able to compete in such a hostile market will dwindle to almost nothing.

It shall be interesting to see which direction this argument goes in Canada, as it may affect the outcome of the US Congressional hearings.