Neutrality nets scapegoat as rhetoric rises

The murky waters of Internet neutrality grew even murkier last week, as a group of major consumer groups called for government intervention, and network operators scrambled to try to ward off such a threat amid an explosion of passionate rhetoric.

The latest skirmish in the war over who controls Internet access was touched off by comments BellSouth Chief Technology Officer Bill Smith made about the possibility of BellSouth offering content providers premium distribution. Smith and BellSouth came under heavy fire from the Internet community, which claimed such services amount to double-dipping for high-speed access revenues and create a two-tiered Internet that gives well-heeled players better access to Internet users. Along the way, BellSouth and other telephone companies were accused of “cyberextortion,” and their top executives were accused of lying.

Content providers, including MovieLink and Disney, initiated the discussions with BellSouth, said BellSouth spokesman Jeff Batcher. Content providers want a way to ensure their customers can get high-quality content in a timely manner, he said.

“The Internet is fundamentally changing,” Batcher said. “We know that 14% of our customers consume 80% of the bandwidth. If we can't prioritize the traffic, the Internet has a great chance of becoming almost useless.”

BellSouth not only found itself on the defensive, however, but almost alone on the front lines, as some other service providers scrambled to avoid the hailstorm of network criticism.

The cable industry in particular steered clear of backing BellSouth's contention. Time Warner refused to comment. Comcast referred queries to the National Cable Television Association, where spokesman Brian Dietz read a statement trumpeting cable's investment in broadband and its members' agreement not to block consumer access to the Internet in any way.

At Cox Communications, spokesman David Grabert reaffirmed his company's support for Internet neutrality, adding that Cox “has no policy statement” regarding commercial arrangements with content providers and no such arrangements at this time.

Verizon spokesman David Fish said the company “provides open and unfettered access” to the Internet, but he wouldn't comment on commercial agreements with content providers.

AT&T, whose chairman and CEO, Ed Whitacre, came under similar fire for comments published in Business Week last February, was willing to defend the concept of commercial agreements between service providers and content providers.

“This has been happening on a number of different levels — it's a concept similar to 800 numbers, where a company pays to enable its customers to reach it more easily,” said SBC spokesman Dave Pacholczyk. “When you go down the aisles of a supermarket, the reason a certain cereal is in a certain place is because the distributor has paid a grocery store for a premium spot. This is hardly new or novel.”

Qwest's Bill Myers said his company supports Internet neutrality but also backs business-to-business negotiations. “That's how things get done in the business world,” he said. Qwest is not engaged in any such negotiations currently, Myers added.

Jeannine Kenny, senior policy analyst for the Consumers Union, criticized the business practice during a press conference held last week by her organization and two others.

“If a content provider has to pay for high-speed access when the consumer is already paying for that access, start-ups won't be able to get off the ground, we won't have innovation, and we will lose competition,” she said. “This is the same thing as asking a sender and a receiver to pay to get an overnight FedEx package.”

The consumer groups want Congress or the FCC to act to prevent network operators from creating new categories of Internet content delivery to protect consumers from the chance that a cartel of large companies will control the Internet, said Mark Cooper, director of research at the Consumer Federation of America.

When it comes to potential regulation, however, service providers are likely to band together.

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