Did you know that porn was a critical element to the success of VHS?

A friend that used to work at AMPEX shared this little detail with me. It's a story we've heard before with other new media form factors: new technology is released that requires an overhaul of existing implementations, so a "killer app" needs to be released to get people to move. Some quiet deals were done so that adult production houses would prefer VHS and the result was a perfect storm of content and technology. And consumers happily invested in VHS so they could see naked people in the privacy of their own home.

The Internet is in a similar boat. It's a technology that has been around since DARPA's heydays. Even after Al Gore spear-headed the necessary legal steps to make commerce on the Internet legal, no one cared until the web started opening things up. However, it took a critical mass of content on the web before there was a strong ramp of users paying for their access.

Today there is a balance between the Internet and the content providers: a bad network and the content providers don't stay in business, no content and the network providers aren't going to have demand from consumers.

If Internet providers think that they are going to be able to charge content providers for using their pipes in a tiered pricing model, they are going to be surprised. I doubt most content providers, especially the big ones, are going to be willing to pay for better access. If content providers get deprioritized and quality suffers, users are going to be unhappy with service providers which in turn will open up the market for providers that don't play with packet priorities.

The only exception to this behavior is going to be VoIP over the Internet. The exception stems from the fact that there isn't a lot of difference between the features of a content providers' VoIP (e.g., Vonage) and a service providers' VoIP (e.g., Verizon). For most customers, a phone is a phone... Because of the lack of features differentiation, content providers are going to be able to offer a substitute that would benefit from the tiered model *and* keep customers happy. Any other kind of content is going to fail miserably because, well, let's face it; AT&T isn't going to offer a YouTube service of their own.