Wireless Firms Count On The Future Of The Internet

The Internet has been an economic bonanza for innovators and entrepreneurs. The world wide web allowed start-ups to thrive at the expense of established companies. But as the Internet age matures, there are concerns big business is trying to exert more control.

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The Internet has been a bonanza for innovators and entrepreneurs. The wide-open world of the web allows start-ups to thrive. And this has sometimes been at the expense of established companies. But as the Internet approaches middle age, there are concerns that big business, particularly the wireless industry, is trying to exert more control. Joel Rose has our report.

JOEL ROSE: Like everything else online, the fight over the Internets future is going mobile.��

(Soundbite of advertisement)

Unidentified Woman: Hi. I'm a T-Mobile MyTouch 4G.

Unidentified Man: And I'm an iPhone 4.

Unidentified Woman: Who's your friend?

Unidentified Man: Oh, it's the old AT&T network.

Unidentified Woman: That'll slow you down.

Unidentified Man: That's the price I pay for 3G speed.

Unidentified Woman: Bummer.

ROSE: While smart phones and gadgets get most of the publics attention, the companies that let you use them - like Verizon and AT&T - may have a bigger financial stake in the Internets future.�

Professor TIM WU (Columbia University): In terms of making money, these are the big players. And we dont notice them as much, but they are the ones who control the movement of information around America.

ROSE: Tim Wu teaches law at Columbia University. Wu says these companies are trying to tighten their control over the wireless networks theyve built. He says you can see this at work on the iPhone. Apple decides what applications and services you can run on it, and which you cant. And the company has restricted the phone to a single wireless provider: AT&T.

Prof. WU: So you have this sort of walled garden, this sheltered experience of all the best stuff. And its pretty attractive. Im not trying to say that theyre unattractive. But you can see its also, at another level, a fundamental threat to what the Internet is.

ROSE: Up to now, success or failure on the Internet has been determined, largely, by us: the users. Were free to use any kind of legal application or service we want. And for the most part, telecom and cable companies allow all traffic to move at the same speed on their networks a principle known as net neutrality.

But some of those companies argue that wireless should be different, because the airwaves can only handle so much data. Bruce Mehlman is a lobbyist for the telecommunications industry.�

Mr. BRUCE MEHLMAN (Lobbyist): It makes sense to allow the carriers to manage their networks because the spectrum which wireless goes over is a finite resource. You need to handle the traffic, whether its spam or even movies. If some users are monopolizing the wireless spectrum, then the quality of service for all users goes down.�

ROSE: This is where the debate over net neutrality gets stuck in neutral. Over the summer, Google and Verizon tried to break the stalemate. Their compromise would make net neutrality the law of the wired Internet, but would not apply that law to wireless. Scott Jordan teaches computer science at the University of California at Irvine.�

Professor SCOTT JORDAN (University of California Irvine): Wireless is going to be a big problem because as these smart phones develop into more complex devices, I think the consumers will expect the same kind of experience on their wireless device than they expect on their wired connection at home. There may be a performance difference, but you wouldnt expect that you would be told you cant use certain applications.��

ROSE: Without new regulations, Jordan and other critics worry about a situation where big wireless companies are able to strike exclusive deals with search engines or retailers or Hollywood studios. Columbias Tim Wu.�

Prof. WU: Ultimately, they hope to be in a situation where they can tax the content. They would like a pay-for-play situation.

ROSE: In that scenario, content companies that want priority access to consumers would have to pay wireless providers like AT&T and Verizon a premium for it. Wu says that could be a big problem for start-ups and smaller companies that cant afford to pay.

Prof. WU: The underlying issue is giving AT&T control, in some sense, over what succeeds and what fails on the Internet.

ROSE: Neither AT&T nor Verizon would agree to an interview for this story. But Verizon executive Link Hoewing did appear with Tim Wu at a public event last month in Washington. Hoewing thinks the wireless industrys critics are overstating the danger it poses to the open Internet. He says the industry is too competitive for that.�

Mr. LINK HOEWING (Verizon): To me, the key driver in this whole debate is, are the consumers getting choice - and are they driving those choices? And I think overall, the answer is yes.

ROSE: Hoewing says the wireless industry doesnt need net neutrality regulation. And the political climate in Washington seems to be working in his favor. Thats a story for tomorrow.

For NPR News, Im Joel Rose.�

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