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2006

Google Threatens Telcos with Antitrust Action

July 18, 2006 0

A Google executive who helped invent the internet has said that Google will use antitrust lawsuits to defend net neutrality.

Google of late warned it will not hesitate to file anti-trust complaints in the United States if high-speed Internet providers abuse the market power they could receive from U.S. legislators.

The U.S. Senate Commerce Committee last week approved sweeping communications reform legislation that would make it easier for telephone companies like AT&T to offer subscription television to consumers.

In an escalation war of words over network neutrality — the idea that all Internet content would not be prioritized for delivery on the basis of fees — a top Google executive said that the Internet giant would pursue antitrust enforcement against telecommunications companies if abuses occur.

Google Vice President and noted Internet pioneer Vinton Cerf said at a news conference in Sofia, Bulgaria, that the company would be happy if the U.S. Congress passes a measure to enforce network neutrality.

But if it does not, he said, Google will not hesitate to file antitrust complaints if telecommunications companies misuse their resulting market power.

After the Commerce Committee of the US Senate rejected enshrining the equality of internet data in law last week, told an audience that the firm will seek to protect its rights to reach every home with antitrust legislation, according to Reuters.

"If we are not successful in our arguments then we will simply have to wait until something bad happens and then we will make known our case to the Department of Justice’s antitrust division," he told an audience in Sofia.

My company, along with many others believes that the Internet should stay open and accessible to everyone equally, Cerf said.

We are worried that some of the broadband service providers will interfere with that principle and will attempt to use their control over broadband transport facilities to interfere with services of competitors.

Hand on Spigot
Brian Washburn, an analyst at Current Analysis, a technology research firm, said Cerf’s statement might simply amount to posturing.

It may be tough for Google to argue antitrust if net neutrality measures fail, Washburn said. "In order to argue antitrust, one would need to establish that a company or a group of companies are monopolistic, with their hand on the spigot. But there are many providers and many resellers."

Last week the U.S. Senate’s Committee on Commerce, Science and Technology approved significant changes to US telecommunications law, allowing telcos to offer TV-like digital video services. The telcos wanted to ensure that they could prioritize their bandwidth-heavy video services on their own networks, but this raised the ire of digital rights activists.

Foreseeing a future where services such as Google or MySpace could be charged to be sent to homes and services which did pay a fast-track fee were promoted by telcos, activists and politicians opposed the change and attempted to have “internet neutrality” enshrined in the new law.

That attempt failed by the narrowest of margins. An amendment needed a majority of the 22 person Committee but the vote was tied at 11–11. An amendment may still be introduced once the bill reaches the floor of the Senate.

The main bill, which passed the committee by a 15-7 vote, deals with broadband, TV, and other telecommunications matters. It includes a provision allowing the Federal Communications Commission to fine phone and cable companies if they try to block access to legal content or services on the Net.

A similar bill, which also does not include a requirement for network neutrality, has passed the House of Representatives.

But it narrowly rejected attempts by some lawmakers to strengthen safeguards on Internet service, which had pitted high-speed Internet, or broadband, providers such as AT&T against Internet content companies like Google.

The battle centered on whether broadband providers can charge more to carry unaffiliated content or to guarantee service quality, an issue called Net neutrality.

"If the legislators … insist on neutrality, we will be happy. If they do not put it in, we will be less happy but then we will have to wait and see whether or not there actually is any abuse," Cerf, told a news conference in Bulgaria.

The U.S. bill includes provisions aimed at preserving consumers’ ability to surf anywhere on the public Internet and use any Internet-related application, software or service.

Cerf is visiting Bulgaria at the invitation of President Georgi Parvanov to discuss ways to boost information technology business and Internet access in the country.

Cerf is a vice president of Google and is credited with playing a key role in the invention of the internet. He helped to develop the universal TCP/IP protocol in the 1970s and founded the Internet Society in 1992. He is now “chief internet evangelist” for Google.

Cerf said that Google would have to adapt if the US law is passed without any automatic protection for net neutrality, but that the company would have to "wait and see whether or not there actually is any abuse," according to Reuters.

Wyden To Filibuster?
Senator Ron Wyden (D-Ore.) has indicated that he is prepared to filibuster the entire bill unless a provision for network neutrality is included.

Without a clear policy preserving the neutrality of the Internet and without tough sanctions against those who would discriminate, the Internet will be forever changed for the worse, Wyden said in a statement.

A potential hedge against such actions, the "network neutrality" argument backed by Google and other major Internet companies, did not make it out of committee. Though legislators attempted to measures to the telecom legislation to preserve net neutrality, those were rejected.

Telecoms companies lobbied hard against net neutrality and have argued that since they pay for the networks they should be allowed to decide what information receives priority on it. AT&T CEO Edward Whitacre said last November in an interview with Business Week that internet companies such as Google and Vonage ought to pay to reach customers’ homes.

How do you think they are 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, he told the magazine.

Streaming video, and television, have become a big focus for Internet companies, telecoms, and cable providers. All wish to deliver video and TV content to their users who spend more time in front of a computer than a television.

Proponents of net neutrality argue that by paying a monthly fee for internet access, customers have already paid to access sites like Google or Vonage, and blocking the sites and asking for further payment acts counter to the service they have already bought.

A Verizon Communications executive has called for an end to Google’s free lunch, he said. A Bell South executive has said that he wants the Internet to be turned into a “pay-for-performance marketplace.”

Under Senate rules, a Senator may filibuster by speaking without limit on a given measure, thus blocking a vote. Sixty votes in the Senate would be required to end a filibuster.

But Senator Ted Stevens (R-Alaska), who sponsored the main bill and chairs the Committee, has acknowledged he does not yet have 60 votes. It is expected that the bill will not reach the Senate floor until September at the earliest.

Advocates of network neutrality believe that, unless it is required, telecommunications companies will be able to charge different rates for different kinds of Internet content. Network neutrality would specifically prohibit these kinds of "toll roads."

Rising broadband acceptance in the United States has led more people to seek out rich media content. Though the technology to deliver that content has matured greatly, the ways everyone can profit from its delivery, without hoarding those profits, have not been developed nearly as well.

Despite extensive lobbying by the telephone carriers, prospects for a final law this year remain uncertain. Congress faces a dwindling number of work days because of the November elections.

If the measure passes the full Senate, it would have to be reconciled with a narrower bill approved by the House of Representatives