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from: Business Week

Get Your Hands Off the Web
Interference in Web content by AT&T and Verizon shows that more regulation is needed

by Stephen H. Wildstrom

A bit over a year ago, I wrote a column arguing that innovation on the Internet would be best served if the government mostly kept its hands off. I've changed my mind. The behavior of the top telecommunications companies, especially Verizon Communications (VZ) and AT&T (T), has convinced me that more government involvement is needed to keep communications free of corporate interference.

The incident that swayed me was a decision in September by Verizon Wireless, majority owned by Verizon Communications, to block Naral Pro-Choice America from using its system to send text-message alerts to supporters. Verizon, which had cited a policy barring distribution of content that "may be seen as controversial or unsavory," quickly backed down after a public outcry. But, a spokesperson says, Verizon "reserves the right to deny other programs in the future."

Verizon has that right under current law. It may not interfere with voice messages, but "common carrier" requirements do not apply to any form of text or data transmission. They should.
How Times Have Changed

The fact is, the old Bell system that was broken up 25 years ago has reassembled itself into a duopoly that dominates the Internet backbone and both landline and wireless phone service. Verizon and AT&T are also among the largest Internet service providers. The old, overregulated AT&T was hostile to innovation, but as stodgy as it was, it saw itself as the steward of a public trust. The company's lightly regulated successors view the world quite differently.

Until a recent change in the terms of its broadband service—again in response to a public flap—AT&T claimed the right to terminate the connection of customers for "conduct that…tends to damage the name or reputation of AT&T." Verizon retains similar language in its terms of service.

Then there's the push by phone companies, which long to get into the TV business, to ingratiate themselves with Hollywood. In defending a plan to block what AT&T believes to be pirated content on its network, its veteran lobbyist James Ciccone said: "AT&T has considered this whole problem of digital piracy, and we feel our interests are very much aligned with the content community's interests." I don't endorse illegal downloads, but it's hard to spot pirated content in transit, so the potential for mistakes is high. And shouldn't AT&T align with the interests of customers?
Google and Others to Pay a Premium?

Phone companies and their allies in the cable TV industry oppose rules that would bar Internet service providers like them from meddling with communications based on content. AT&T and others also say they must be allowed to charge companies such as Google (GOOG) a premium to deliver high-quality video and other advanced services. Their opponents support a single-fee structure for all Internet users covering all types of traffic, be it voice, music, video, or data.

There's a certain irony here. The carriers warn that without premiums to pay for advanced services, the U.S. risks falling behind other nations in broadband. But the U.S. is already losing ground to the rest of the industrialized world in broadband speed and percentage of homes served. Last year the U.S. fell from 12th to 15th in broadband penetration among 29 countries ranked by the Organization for Economic Cooperation & Development. Most of those nations are enthusiastic regulators. (Verizon is rolling out a fast service of up to 50 megabits a second, but so far it reaches just 1 million homes.)

The hands-off approach hasn't served consumers well. And the Web is far too important to entrust the free flow of information to the shifting whims of a few big companies. Government must step in and tell them to leave our content alone.

Wildstrom is Technology & You columnist for BusinessWeek. You can contact him at techandyou@businessweek.com .