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Bad Faith from AT&T, Ed Whitacre and Mike McCurry

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Ed Whitacre. That's a name you should remember. He's the man who wants to destroy the free internet. He's the man who's paying Mike McCurry. Ed Whitacre. The CEO of AT&T.

Now, many of you are aware of the frothing and well-paid incoherence that is Mike McCurry. McCurry is the former Clintonista turned lobbyist who has for days been trying to justify his work lobbying for telecommunications companies that seek to control the internet. Now, there's nothing wrong with lobbying, but there is something very wrong with repeated bad faith attempts to mislead the public on what's going on on a major public policy change. I'm glad that bloggers are not allowing McCurry to go unchallenged, it speaks well of us unclean rabble. But we cannot lose sight of the fact that Mike McCurry is standing in as the public face for some very bad and very arrogant people trying to monopolize how Americans communicate.

Here's the gist of the political fight. Right now, broadband providers basically let you access any legal web site or service you want to, and the speed is comparable whether you're reading a small blog or whitehouse.gov. If a new law working its way through Congress is passed, pretty soon your broadband provider will be allowed to degrade service to Google, Vonage, or your favorite blog if a competitor pays them, if they develop a competing service, or if they just don't like you. This is a fundamental and radical change to the design of the internet, and a direct challenge to the freedom we all have in this new medium.

And telecom companies have plenty in store for all of us. Jonathan Krim of the Washington Post reported that the CTO of Bellsouth wants to be able to degrade service to search engines and internet telephony services. And one of the hottest new networking technologies is called "deep packet inspection", which enables network operators to tell whether bits on their network are email, videos, music, photos or any other use. One company is even marketing something called 'Skype Filtering Technology' to block internet telephone services. Like the Chinese government, these companies aren't just exploring censoring the internet, they are banking on it.

Of course Mike McCurry preens and pretends that this stuff isn't going to happen. "What service is being degraded?" he arrogantly demands to know. Since publicly available reporting won't satisfy him, perhaps he'll take the word of his boss, Ed Whitacre, CEO of AT&T. Whitacre's public pronouncements are quite revealing:

How concerned are you about Internet upstarts like Google, MSN, Vonage, and others?

How do you think they're going to get to customers? Through a broadband pipe. Cable companies have them. We have them. Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?

The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! (YHOO ) or Vonage or anybody to expect to use these pipes [for] free is nuts!

So Whitacre directly and public contradicts Mike McCurry. Call me crazy, but I tend to believe the guy in the corner office rather than the hired press flunky.

Of course, Ed Whitacre is also lying, though his lies are borne less of a need for payola and more of royal pretensions. What he's referring to aren't 'his pipes'. They belong to the shareholders of his company. And Google and Yahoo and every web site operator aren't using 'his pipes' for free, they pay a lot of money in bandwidth for the privilege of putting lots of content on the internet. What Whitacre means if you can get through the haze of arrogance and contempt for freedom is that web content companies shouldn't be allowed to operate without paying his company a toll, but that's different from asserting they don't pay anything. That is a lie.

But I found the most revealing aspect of Whitacre's character to reside in his answer to this question on regulation in a Businessweek interview.

The cable companies have an agreement with the cities: They pay a percentage of their revenue for a franchise right to broadcast TV. We have a franchise in every city we operate in based on providing telephone service.Now, all of a sudden, without any additional payment, the cable companies are putting telephone communication down their pipes and we're putting TV signals. If you want us to get a franchise agreement for TV, then let's make the cable companies get a franchise for telephony.

If cable can put telephone down their existing franchise I should be able to put TV down my franchise. It's kind of a "what's fair is fair" deal. I think it's just common sense.

Whitacre is paying McCurry to shill pseudo-libertarian nonsense, but when push comes to shove he just wants to make sure that his competitors are regulated. In other words, Whitacre doesn't want his company to compete on a level playing field through innovation and quality of service, and anyone who's dealt with AT&T customer service would know that. Whitacre is actively lobbying for hobbling other industries so he can ensure his company's revenue stream. This is inefficient economic behavior, and should not be encouraged.

And this is what gives the big lie to the telecommunications lobby. Ed Whitacre isn't in favor of free markets, he's in favor of a political advantage for his company's profit margins. Cable TV coming to eat his lunch? No problem, let's get the government to regulate the problem away. Internet VOIP challenging his company's business model? No problem, let's get the government to regulate the problem away. American entrepreneurs generating wealth off the open and free internet with no innovation coming from the telcos? No problem, let's get the government to allow the telcos to privately tax the wealth creators without having to do anything.

Ed Whitacre is everything that's wrong with American business. Dishonest. Cowardly. Anti-competitive. Anti-innovation. Anti-market. It's no wonder that America is 16th in the world in broadband penetration, and I can't get cell phone reception in my apartment. The Ed Whitacres of the world are busy trying to regulate themselves a nice cozy advantage instead of delivering quality and innovation. And they've hired Mike McCurry for a nice new, er, paint job.

This system needs to change, and we're changing it. Bashing Mike McCurry is not only fun, it's important, as there must be a cost to his decision to sell us out. But realize that Mike McCurry's bad faith arguments are just the output of the system that started with a dishonest, arrogant, and ultimately weak man like Ed Whitacre. Garbage in, garbage out. The tragedy here is that this is a critical issue for our country, and yet McCurry has proven not only that he can't be trusted, but that his clients cannot be trusted either. And I have no doubt that this pernicious and dishonest attitude will carry through if they get their hands on the internet. So we can't let them.

This is about teaching Mike McCurry a lesson in ethics. And it's about to become about teaching Ed Whitacre a lesson in democracy.