[A2k] Verizon Warning to Finance Sector

[Seth Johnson]

> http://www.eweek.com/article2/0,1895,1959094,00.asp


Verizon Warns Financial Sector on Internet Fight

By  Reuters

May 8, 2006


WASHINGTON (Reuters)=97Verizon 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
Amazon.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 money!"

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.