Verizon warns financial sector on Internet fight
Verizon Communications warned the financial services industry may not
get the secure networks it needs if Congress adopts laws governing
high-speed Internet broadband networks, according to a company memo
obtained by Reuters on Monday.
The financial services industry is weighing whether to wade into a
fight over legislation on broadband service, known as "Net
neutrality." It fears that without safeguards on pricing for network
access, the costs to financial institutions could rise.
Verizon, the No. 2 U.S. telephone company, opposes legislation for Net
neutrality and sent the memo to its consultants urging them to discuss
with banking industry clients the arguments against possible
legislation in the U.S. House of Representatives and Senate.
"They are being fed a lot of cock-and-bull, Chicken Little stories
about how the future of their industry is at stake because another
network industry might have the freedom to price broadband services
according to market demand," Verizon's chief congressional lobbyist
Peter Davidson said in the memo.
He warned that the financial services industry "better not start
moaning in the future about a lack of sophisticated data links they
need" if Net neutrality laws were passed because the communications
industry may not invest in new networks.
Verizon and AT&T Inc. have expressed interest in expanding from flat pricing
for broadband to selling tiers of service based on the speed, reliability
and security. They have pledged not to block access to the open Internet.
"Why in the world should broadband network providers, who have
invested billions to create those networks, be denied such pricing
freedom?" Davidson said.
That has raised fears among Internet content companies such as
mazon.com Inc. and Google Inc. that they will be shunted to a slower
lane of the Internet if they do not pay more for dedicated access.
Davidson argued that that broadband providers are not "going to do
anything stupid to antagonize the people they rely on for their
A financial industry lawyer has been circulating a memo warning that
the sector ignores the Net neutrality debate at its peril and urged
companies to push for legislation that would preserve flat broadband
pricing for online financial services.
Financial services lobbyists have said they are concerned about the
issue, and are monitoring it.
The House could consider legislation this week that would preserve the
ability to surf on the open Internet but does not specifically bar
Internet providers from charging new fees to assure reliable service
to business users. It is part of a broader communications bill.
The Senate is considering its own legislation but only requires a
study on Net neutrality. Differences between the bills could prevent
any legislation from becoming law this year, analysts have said.
Copyright 2006 Reuters Limited.
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[TELECOM Digest Editor's Note: If allowing AT&T and Verizon to set
prices and standards of service on the net would effectively force
all the spammers out of business, then I am all for it! PAT]