[IP] SBC Head Ignites Access Debate
Begin forwarded message:
From: Dewayne Hendricks <dewayne@xxxxxxxxxxxxx>
Date: November 4, 2005 3:26:43 PM EST
To: Dewayne-Net Technology List <dewayne-net@xxxxxxxxxxxxx>
Subject: [Dewayne-Net] SBC Head Ignites Access Debate
Reply-To: dewayne@xxxxxxxxxxxxx
[Note: Worth reading as a good follow up to the posting last week of
Whitacre's remarks from his 'Business Week' interview which
generated a hailstorm of comments. DLH]
SBC Head Ignites Access Debate
By Arshad Mohammed
Washington Post Staff Writer
Friday, November 4, 2005; D01
<http://www.washingtonpost.com/wp-dyn/content/article/2005/11/03/
AR2005110302211.html>
The head of a major telecommunications company stirred up a hornets'
nest this week by suggesting that he wants to charge companies like
Google and Yahoo a fee for bringing them into consumers' homes.
SBC Communications Inc. Chairman Edward E. Whitacre Jr.'s comments to
Business Week magazine prompted Internet companies to accuse him of
aspiring to block access to their Web sites and to extort money from
their businesses.
A spokesman for San Antonio-based SBC said the second-largest U.S.
telecom company is committed to giving customers unfettered access to
the Internet and that the comments were misinterpreted.
But Whitacre's characteristically blunt remarks -- published as his
company this week won federal approval to buy AT&T Corp. for $16
billion -- revived a debate on whether Congress should make sure that
consumers can go wherever they want on the Internet and keep phone
and cable companies from blocking legal Web sites and services.
Asked about Internet firms such as Google, Microsoft Corp.'s MSN and
online phone service Vonage, Whitacre told Business Week that those
companies were dependent on SBC's lines -- or "pipes" -- for their
success in reaching consumers.
"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," he said, according to Business Week Online's edited
excerpts of the interview.
"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 free is nuts," he said.
Internet companies said Whitacre was stating what they have long
feared -- that SBC and others may manage their networks to choke off
access to Web sites or to target competing firms such as Vonage
Holdings Corp. and Skype Technologies SA, which provide Internet-
based phone services.
"It seems like a rather monopolistic attitude," said Michael Jackson,
vice president for operations at Skype. "If the line were free to the
user, or the bandwidth were free to the user, then perhaps he'd have
a point. But the line isn't free to the user. The customer is paying
for the bandwidth. . . . He's already paid for it. Why should he pay
more?"
"It sounds like SBC is going to block me, try to block me, or try to
charge me for something," said Vonage Chairman Jeffrey Citron.
"Any notion that SBC or anyone else . . . can get paid twice on the
same service is a bit ludicrous," he added, saying it would be like
UPS demanding the sender and recipient of a package both pay for
delivery.
Citron and others said Whitacre's comments strengthened the argument
for "net neutrality" legislation to ensure that consumers can go
where they want on the Internet and that network operators like SBC
do not favor some sites over others.
The issue has become more prominent in Washington since the Federal
Communications Commission in March stepped in to stop a broadband
provider from blocking an Internet phone service.
FCC Chairman Kevin J. Martin declined to comment directly on
Whitacre's remarks but said he does not think new FCC rules are
warranted.
"I don't think that there is evidence of the kind of activity of
blocking consumers' access to the Internet that would justify us
adopting new rules at this stage," Martin said in an interview. In
approving the SBC-AT&T merger this week, the FCC put conditions on
the deal that would prohibit the company from restricting access to
Internet content for two years. Martin had initially opposed imposing
any conditions for the merger.
Most people have at best two choices for high-speed Internet access
-- phone lines and cable wires -- giving them few options if their
provider interferes with their Internet services.
"The real issue here is exactly what Mr. Whitacre owns up to. They
have market power -- if not monopoly, then duopoly -- and there are
no other choices for consumers," said Paul Misener, Amazon.com Inc.
vice president for global public policy.
Misener said he wanted SBC and other broadband providers to prosper
because they bring droves of customers to Amazon.
"But to sort of flip it around and to be able to extort fees from
Internet companies because there is nowhere else for their [SBC's]
customers to go, it seems to us an untoward exercise of their market
power," he said.
[snip]
Weblog at: <http://weblog.warpspeed.com>
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