I have commented before on the raging INTERnet-neutrality debate and how closely allied it is to the issue of LOCAL net neutrality - the focus of the OPLAN Foundation.

Well last week I was reminded again of just how much double talk some of the major vested interests in the telecoms and cable sector are engaged in on this issue. 

We already know the totally warped "let the market be free" argument of the likes of AT&T and Verizon who want to charge service providers and the likes of Yahoo and Google for use of the Internet on a differential basis - i.e. destroy 'net neutrality'.  The fallacy of their 'free-market argument' being that these major corporations would never exist as they do today, as vertically integrated behemoths, had they not been created as such through a century of state intervention, nationalisation and more recently, arbitrary sector-specific regulation.  Had the market been allowed to deploy the digital technologies of abundance free from state intervention and vested interest protection - then the likes of AT&T, Verizon, France Telecom and BT would have left the stage long ago.

Anyway, as we all know, given the fact that they are still with us, it is not surprising that large companies such as Google, Yahoo and Microsoft having been denied the power of the free market to ensure the continued neutrality of the internet - feel forced to turn to legislators to prevent the artifically long-lived dinosaurs from messing it up.  "Foul" cry the dinosaurs - "...government stay out of this - let the market decide!".  Some market, I say!

Well, it appears that shareholder meetings in these "state preserved dinosaurs" look like becoming a battleground for fighting with US politicians over net neutrality.  A self-styled conservative investment group (The Free Enterprise Action Fund - FEAF) wants Google, Yahoo!, eBay and Amazon to explain to their stock holders why they want the US government to stop broadband service providers from charging different tariffs for using the internet.   I urge you to take the time to read a fuller report of this in the Register  but briefly, Tom Borelli, a FEAF portfolio manager interviewed by the Register, thinks that companies that "run" to government are acting against "innovation." "They should focus on improving their products, not legislation", says Mr Borelli.  He goes on, "Our antenna go up when big companies seek regulation.  In our view that's a sign of weakness. A free market should be out there competing and innovating, rather than running to the government to protect the market. That's a defense strategy."

So that's one side of the coin.  Now the other!   Onto my desk (well, HDD actually) this week, dropped a heavyweight research report from a highly reputable international firm of consultants who specialise in all matter to do with telecoms and IT .  I won't say who, because there is no way I or the Foundation could afford the $1,500 price tag for this 26 page report which carries the sub-title, "How Google, Skype, and Yahoo! will change fixed telcos models".  (If you have that sort of money and want to purchase the report, rather than donate to the OPLAN Foundation, I can strongly recommend it - just drop me an email for details) 

Anyway, in this report, following an impressive analysis of the market growth of VoIP traffic with lots of statistics and dire warnings of the likely massive negative impact on telco revenues if (..I say when) solid names like Google, AOL or Microsoft come to market with a home telephony VoIP offering, there is a final chapter entitled, "What can Telcos do About it?".  Well the suggestions are eye-popping!  They range from,"interfere with - or even block - VoIP packets to affect QoS for third parties" through to, "cultivate subscriber lethargy".  But the one that caught my eye is entitled, "Lobby for the ability to interfere with/block VoIP packets".  It's worth quoting at length:

"Lobby for the ability to interfere with or block VoIP packets. The regulatory environment in most developed countries will aim to provide a level playing field and competitive environment. Since IP technology has altered the rules of the game, allowing new entrants to directly compete with established players at a fraction of the expense, fixed operators may find regulatory support in proposals that would allow preferential treatment for data owned by the network operator since they are paying for the underlying network. Alternatively, tariffs could be levied for third-party data sent over an operator’s network. The arguments for and against net neutrality can be considered outside the scope of this particular report, but it is certain that VoIP will be one of the core motivating factors for both sides of the debate."

Well, there you go!  If you hire the very BEST consultants, then it seems that "double talk" is as easy as ful duplex telecoms!  Oh, and France Telecom's yesterday reported a 30.2% drop in net income for the first six months of 2006 ... something to do with VoIP they say.