Nov. 14, 2005 – Page 3041
Back in 1989, newspaper publishers were battling what they saw as a huge threat to their classified advertising business. No, it wasn’t Craigslist or Monster.com (come on, people, this was before the Web). Rather, publishers were fighting the regional Bell phone monopolies, which wanted Congress to let them distribute their Yellow Pages listings to computer users over their phone lines.
Forward thinkers that they are, the publishers were scared because they had seen the future, and it was — in France. The Minitel was a device that the state-run French phone company had installed into residents’ homes, allowing people to shop, get stock quotes and news updates on a little green screen. The phone company controlled all the data that went into the Minitel, and it also reaped all the profits.
It seemed hypocritical for news publishers to deny the phone companies the right to control both the “content” and the “conduit” over which that content travels. Newspapers since Gutenberg have done the same, owning the printing presses, delivery vehicles and what goes onto every printed page. But the publishers were a powerful lobby (remember the adage “Never argue with someone who buys ink by the barrel”?) and the Bells weren’t allowed into the “electronic publishing” business until the Telecommunications Act of 1996.
Those newspaper bosses had no idea that within just a few years the Bells would be the least of their worries: The Internet would pose a far greater threat — not just by stealing off with classified ads, but by destroying their long-cherished control over the distribution of news and print advertising.
What makes the Web the distribution channel of choice is its free and open nature; any content or Web application provider can set up shop and all the world can get there. That may be bad news for the old-line news publishers, but it’s good news for everyone else.
Too bad it might not last. To enjoy the Internet today, you must have high-speed “broadband” access. Yet, in most markets, only the local phone company (yes, those Bells) and a cable company provide it. And lately, these gateway providers are sounding more and more like gatekeepers, threatening to levy new charges on Web sites that compete with their other lines of business — and even threatening to block users from visiting competing Web sites at all.
Phone companies, for example, are talking about blocking Web-based voice services such as Skype and Vonage; they argue that such services hog their limited bandwidth. Verso Technologies Inc., a vendor to telcos, already sells “Skype Filtering” software that allows carriers to block Voice over Internet Protocol (VoIP) services.
Also, as the Web becomes a place to download movies and TV shows, many fear cable (and soon phone) companies will block those sites and instead steer consumers to their own programs.
Last week, Edward E. Whitacre Jr., chairman and chief executive of SBC Communications Inc., was asked by BusinessWeek whether Vonage, Google and other Web companies posed a competitive threat. His response: “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?”
Talk like that feeds a groundswell of opinion that Congress should enact some kind of doctrine of “network neutrality,” which would aim to ensure that consumers retain the freedom to go to any Web site of their choosing, or download any application of their choosing, without interference from their access provider.
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Whitacre and other broadband providers are justified in making customers pay more when they use more bandwidth — but they shouldn’t be able to use that problem as justification for shutting down access or diminishing service to competing businesses.
It might have been easier to legislate broadband neutrality back when the phone companies were highly regulated “common carriers” using networks built with assured profits. But, as Whitacre argues, the telcos have laid a lot of fiber since deregulation in 1996. Now they view their networks like cable systems, built with private capital.
So maybe news publishers in 1989 weren’t so naive to worry that the Bells might end up with unfair control over electronic content. Maybe we’ve all been naive to think the Web would stay a free-ranging place where your access provider won’t get in the way of your surfing.
And maybe we’ll soon be updating that adage to say: “Never argue with someone who sells Internet access by the megabit.”
Mike Mills is CQ’s executive editor for electronic publishing. Next week’s CQ Roundtable: Courts & the Law, by Kenneth Jost.






