IP Democracy: Competition, Google Can Stop Broadband Providers from Blocking Access

(Washington, DC) A panel of financial industry representatives speaking at Pulver’s Peripheral Visionaries’ Summit today offered definite opinions on SBC CEO Ed Whitacre’s threat to charge access fees to services, such as Google or Yahoo, that ride over the phone company’s broadband platform. One conclusion: phone companies and cable companies need to hang together in demanding toll fees from Internet providers, or neither industry will succeed in extracting payments from Internet services.

Dan Berninger, VP and Senior Analyst, Tier 1 Research, advised the attendees to note that Whitacre aligned SBC with cable operators in the infamous Business Week interview. Whitacre phrased his threat in terms of “we and the cable companies,” Berninger said.

“He can no longer screw the customer by himself. He needs cooperation to do that because the moment he does that [asks Google for payment to access the DSL network] customers are going to run to the Hill. He has to keep them captive in order to implement his access fees. He has to have the cooperation of cable.”

The real solution to the broadband toll gate problem is competition, according to Blair Levin, Managing Director, Legg Mason and former Chief of Staff at the FCC. “What makes me more optimistic…is that Rupert Murdoch and Charlie Ergen are looking at alternative broadband access models. That’s more likely to drive the competition you’re talking about,” Levin said.

Berninger thinks Google or Yahoo can stop the phone companies and cable companies from demanding payments from Internet services. “The force that is going to stop the access industry going forward is the info-tech industry. If there is a player in info-tech that goes for the whole communications imperative…that screws that [any plans that cable or phone companies might have to charge access fees to Yahoo or Google or similar services] up.”

Posted by Cynthia Brumfield on November 10, 2005 11:28 AM to IP Democracy