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Telcos Up Ante In Net Neutrality Game

David A. Utter
Staff Writer
Published: 2006-02-07

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Telecoms like Verizon and AT&T have been pushing harder to get their dreams of a two-tiered Internet supported by Congress and content providers.

The people do not appear to have been heard by the telcos. Instead of recognizing the benefits and needs for an Internet that doesn't have artificial barriers placed within it, Verizon and AT&T have turned up the volume.

A Washington Post article cited Verizon senior VP and deputy general counsel John Thorne, who spoke ahead of Congressional discussions on net neutrality:

"The network builders are spending a fortune constructing and maintaining the networks that Google intends to ride on with nothing but cheap servers," Thorne told a conference marking the 10th anniversary of the Telecommunications Act of 1996. "It is enjoying a free lunch that should, by any rational account, be the lunch of the facilities providers."

The article further noted Verizon's work at constructing a fiber optic network that would deliver high-speed services. One source claims this work has been paid for already, in the form of $200 billion in tax breaks and other largess bestowed upon the telcos prior to the passage of the Telecommunications Act of 1996.

Telecom analyst Bruce Kushnick has made a number of claims regarding that $200 billion, and summarized the claims that appear in his book about the issue of telcos getting incentives to bring fiber to the home and then not doing so:

Starting in the early 1990's, the Clinton-Gore Administration had aggressive plans to create the "National Infrastructure Initiative" to rewire ALL of America with fiber optic wiring, replacing the 100 year old copper wire. The Bell companies - SBC, Verizon, BellSouth and Qwest, claimed that they would step up to the plate and rewire homes, schools, libraries, government agencies, businesses and hospitals, etc. if they received financial incentives.

•  By 2006, 86 million households should have already been wired with a fiber (and coax), wire, capable of at least 45 Mbps in both directions, and could handle 500+ channels.
•  Universal Broadband: This wiring was to be done in rich and poor neighborhoods, in rural, urban and suburban areas equally.
•  Open to ALL Competition: These networks were to be open to ALL competitors, not a closed-in network or deployed only where the phone company desired.
•  This is not Verizon's FIOS or SBC's Lightspeed fiber optics, which are slower, can't handle 500 channels, are not open to competition, and are not being deployed equitably.
•  This was NOT fiber somewhere in the network ether, but directly to homes.

Away from Washington, DC, in San Francisco, AT&T (formerly SBC) has pulled all of its ads from the San Francisco Chronicle. That action was reportedly worth $5 million per year to the newspaper, according to a post by search expert John Battelle, who thinks this move foreshadows what Google will face as it moves ahead with its plans to unwire San Francisco, and perhaps beyond:

…this is your new competitor, Google. Get to know them. As you offer free WiFi to all of San Francisco (and, one might argue, the rest of the country/world), and undermine AT&T/SBC's broadband business (and wheel Vint Cerf out to argue the net neutrality meme), hard ball players like SBC are going to go after you, and rest assured, their motto ain't "don't be evil."

These same providers, AT&T/SBC, Verizon, BellSouth, and others collect fees from end-user subscribers in the home as well as from Google, Yahoo, and other big Internet players. Implying the Google is enjoying a "free lunch" doesn't conform to reality; the only free lunch associated with Google is in their employee cafeterias.


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

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