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SBC CEO Threatens Internet

David Utter
Expert Author
Published: 2005-10-31

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Ed Whitacre, who is about to be the CEO of AT&T once SBC changes its name, thinks the likes of Google and Yahoo need to be paying him.

If you've ever wondered why Google would want a network it wholly owns and controls, look no farther than the Business Week interview with SBC Communications head man Whitacre. Asked about concerns he might have with the likes of the search engines companies, and VoIP market leader Vonage, he sees a big tollbooth constructed at the on-ramp to the information superhighway:

How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?

The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!

In this scenario, the old adage about the Internet routing around problems doesn't help, because the growth of broadband coupled with massive consolidation by the telecom industry means a few hands control the routes. This may come as a real shock to customers who thought that paying hefty broadband subscription fees to SBC and others actually entitles them to go where they want online.

A former SBC executive figures in a proposal to limit municipal competition to private providers. House Representative Pete Sessions, R-TX, was with SBC for 16 years; the company still employs his wife, Juanita. Sessions introduced legislation in Congress that would ban municipalities from offering services that could compete with private providers like SBC.

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About the Author:
David Utter is a staff writer for WebProNews covering technology and business. Email him here.

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