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Monday, July 10, 2006

Net Neutrality: Go for eBay

It seems to be in vogue to claim that the worst beasts in the jungle are the Telco’s: they conspire time and time again to keep the playing field tilted and to keep the poor innocent web companies away from the best bits of food chain.

What absolute and complete tosh!

In fact the worst purveyor of closed systems and non-open access is without doubt eBay.

A little light was thrown into eBay’s monopolist vision of future by its’ banning of Google Checkout for payment services. Ebay claims that because Google Checkout does not have a track record, it cannot be given approved status. Is this an artificial barrier to entry that eBay is creating or a legitimate concern on behalf of its’ users? I would of course claim the former and if I was a telco I’d shout long and hard to whoever regulates eBay. If fact, I’d go a step further, if I was a large Mobile Company I’d ask eBay if I they could allow customers to make payments for their goods via Mobile Prepay Balances. After all, more teenagers in the UK have prepaid accounts than bank accounts and they have proved extremely difficult over many years to defraud.

When eBay refuses or imposes high transactional fees, I’d then take them to the Office of Fair Trading (OFT) to expose them as the modern day monopolists that they surely are.

Obviously with the action above, eBay is protecting its’ Paypal monopoly revenue stream. eBay hope to create another stream with another equally outrageous and illegal service called Skype. If I was a telco I’d go for this one as well, however subtlety is required this time or else the telcos run the risk of being called whingers. Here, I’d encourage a few of my corporate customers to take Skype to court for illegal use of their networks for carrying other people’s traffic. The remedy I’d seek is two-fold: one a simple way of avoiding any network carrying other people’s traffic; and two a simple way to block Skype traffic for my network completely. Obviously, there is an industry evolving around the grooming of good and bad P2P traffic, but these tools will be beyond the capability and wallets of your average small company. I believe it is extremely unfair for Skype to write capabilities into its’ software which are so blatantly designed to transverse corporate firewalls. I also believe they know exactly the type of organisation (read public sector with large bandwidth and limited IT Skills) who will end up paying for the majority of their “Supa-Node” infrastructure. In short, I believe that Skype are a “free rider” of the worst type, they fully understand their actions and design their software to force IT-challenged companies to pay for their operational costs. Many people who sign the Skype End-User Licence Agreement do not have authority to sign away commitments to carry traffic on behalf of others on the corporate IT networks that they are installing the software.

As a telco I’d assist these class action lawsuits with examples that show that they provide their corporate customers with tools to block unwarranted traffic that would cost their customers a lot of money eg Premium Rate Number and Overseas Calls. In the interest of fair play, I'd also finance a few lobbyists to get various governments to write legislation to make Skype illegal until they make the necessary changes.

Finally, just because eBay is so thoroughly evil, I’d go after their cash cow with a vengeance. I believe the reason that eBay is so dominant (and a monopolist in certain countries auction markets) is because it has a “trust” system based upon a user id and voted for by the user community. If you use eBay you know the user track record and also know that if the user was doing anything illegal that eBay would ban the user as frequently happens – in other words the eBay systems contains the de-facto internet standard for the risk profile of the individual.

If we take this example into the real world, can you imagine the type of outrage that would occur if a single bank owned exclusively the credit rating information for most traders in the world and forced you to use their bank for transaction if you wanted access to this information? The executives would be locked-up and the keys for the cell would be thrown away for a long time.

I would be arguing that eBay is a monopolist supplier for this type of information and should be broken up. In other words the “trust” element of their network should be separated from their “transactional” network. The “trust” network, since it is a monopolist should be regulated and open to any eCommerce vendor and have common unique identifies such as National Insurance number to enable other companies to interface to the data and for tax authorities to ensure that the eBay customers are not just fraudulent tax avoiders.

Although, these three measures are pretty harsh and spoken in jest, they really are a case of the old saying that “people in glass houses should not throw stones”