There is something about the communications industry that makes its executives go crazy – at our expense, and to our detriment. It happened to the CEO of Verizon in an interview in April (“Why in the world would you think your cell phone would work in your house?”). Now the CEO of SBC has given an interview to Business Week while he was off his medications, and it’s even more scary.

Regulations used to permit other companies to support DSL lines directly. Covad, Rhythms, and others were forced out of business or into bankruptcy by SBC’s grossly unfair business tactics and SBC now has its monopoly on supplying DSL service to homes and businesses. You pay SBC (or a reseller like Sonic) for the use of Internet bandwidth. You probably think you have the right to decide how to use that bandwidth, right?

As long as you were reading web pages, SBC thought that was fine. But now people are beginning to use Internet bandwidth to make phone calls (Voice Over IP – VOIP), bypassing SBC’s phone system, and SBC CEO Edward Whitacre finds that to be outrageoous and unacceptable – and he wants money, lots of money, to make him feel better. In a world that rolls over for the demands of big companies, we cannot be complacent; this is scary stuff.

BW: “How concerned are you about Internet upstarts like Google, MSN, Vonage, and others?”

Whitacre: “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! or Vonage or anybody to expect to use these pipes [for] free is nuts!”

Mr. Whitacre apparently wants to charge additional fees if he doesn’t approve of your use of “his” Internet connection. Google and Yahoo! and Vonage pay huge fees for their connections into the Internet, of course, but apparently that’s not enough for Mr. Whitacre either. If someone is actually in a position to compete with SBC to provide a service, then they must be stopped, not by competition to provide better or cheaper service but rather by changing the rules so that only SBC can win.

Here’s one columnist’s reaction – that Mr. Whitacre is currently the Internet’s biggest threat, a lunatic but one to be reckoned with. And he mentions the same thing that popped into my head – there’s probably somebody just like him over at Comcast.

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