Verizon warns financial sector on Internet fight (Reuters)

WASHINGTON (Reuters) - Verizon Communications warned thefinancial services industry may not get the secure networks itneeds if Congress adopts laws governing high-speed Internetbroadband networks, according to a company memo obtained byReuters on Monday.

The financial services industry is weighing whether to wadeinto a fight over legislation on broadband service, known as"Net neutrality." It fears that without safeguards on pricingfor network access, the costs to financial institutions couldrise.

Verizon, the No. 2 U.S. telephone company, opposeslegislation for Net neutrality and sent the memo to itsconsultants urging them to discuss with banking industryclients 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 Littlestories about how the future of their industry is at stakebecause another network industry might have the freedom toprice broadband services according to market demand," Verizon'schief congressional lobbyist Peter Davidson said in the memo.

He warned that the financial services industry "better notstart moaning in the future about a lack of sophisticated datalinks they need" if Net neutrality laws were passed because thecommunications industry may not invest in new networks.

Verizon and AT&T Inc. have expressed interest in expandingfrom flat pricing for broadband to selling tiers of servicebased on the speed, reliability and security. They have pledgednot to block access to the open Internet.

"Why in the world should broadband network providers, whohave invested billions to create those networks, be denied suchpricing freedom?" Davidson said.

That has raised fears among Internet content companies suchas Amazon.com Inc. and Google Inc. that they will be shunted toa slower lane of the Internet if they do not pay more fordedicated access.

Davidson argued that that broadband providers are not"going to do anything stupid to antagonize the people they relyon for their money!"

A financial industry lawyer has been circulating a memowarning that the sector ignores the Net neutrality debate atits peril and urged companies to push for legislation thatwould preserve flat broadband pricing for online financialservices.

Financial services lobbyists have said they are concernedabout the issue, and are monitoring it.

The House could consider legislation this week that wouldpreserve the ability to surf on the open Internet but does notspecifically bar Internet providers from charging new fees toassure reliable service to business users. It is part of abroader communications bill.

The Senate is considering its own legislation but onlyrequires a study on Net neutrality. Differences between thebills could prevent any legislation from becoming law thisyear, analysts have said.

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