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Vint Cerf says phone and cable companies need to be split into two arms: wholesale and retail. ((Reed Saxon/Associated Press))

Vint Cerf, who developed the technical principles on which the internet works, has blasted telephone and cable companies for harming national interests by holding investments in their networks to ransom.

Cerf, a long-time advocate of keeping the internet free from control by service providers and a current senior vice-president for search giant Google Inc., told the Silicon Valley Watcher blog that the companies are being childish by threatening to withhold upgrading networks unless they get breaks from regulators.

"Basically, it's like little kids in a tantrum: 'I'm not going to build this system unless you give me three scoops of ice cream and a pony,'" he said in a video posted on the blog on Tuesday. "My reaction to this is quite negative. It's harmful to the national interest to behave in this way because it is serious infrastructure — it's very much like the road ways."

Cerf said large internet service providers (ISPs) need to be split into two entities — one wholesale arm that sells access to the company's network to other firms, and one retail arm that sells internet access to customers. The wholesale arm would have to sell access to other service providers at the same rate that it charges itself.

The model has been adopted in the United Kingdom and New Zealand, where Cerf said it is working. Separation of a company — if not fully structural, then at least of its accounting department — is necessary to keep competition in providing internet access alive, which will head off ISP interference such as the slowing of certain kinds of traffic that is happening in the United States and Canada.

"We have to provide incentives that cause those companies to behave differently or create an incentive for a competitor to put in facilities that will compete with them. I want to take away their monopoly mandate," he said. "We have to make it a privilege to build the infrastructure. There has to be a reasonable rate of return, but it cannot be a confiscatory rate of return and it cannot be abused by allowing people to throttle competitors."

Rogers stirs up new hornet's nest

Cerf's comments come as a new controversy has erupted over internet interference by a Canadian ISP. Online message boards have been lit up for the past few days by users angry over a change made by Rogers Communications Inc. in how failed internet address searches are resolved.

Under the new system implemented last week, when a Rogers customer types in an internet address that does not exist they are redirected to a company-supported page with ads and links, rather than to the typical "server not found" page. Rogers did not notify customers of the change but does offer the ability to opt-out.

The move has outraged users, who say Rogers is hijacking their browser and searches. The opt-out function has also been criticized because it is browser-based, which means users must re-opt out every time they clear their tracking cookies.

"They did this to spam us with advertising when we type in a wrong [internet] address," wrote one poster on the Digital Home website. "I can't believe I pay Rogers for this service and they did this without asking us and they refuse to turn it off."

Nancy Cottenden, spokesperson for Rogers, said the change was made in order to eliminate error pages and "provide helpful search results based on what a customer is looking for."

"We make product enhancements on a regular basis and considered this to be one of them," she said. "We don't notify on each and every one."

University of Ottawa internet law professor Michael Geist said Rogers should offer the function on an opt-in basis, or at least institute the opt-out at a higher level — as other ISPs who have made this move have done — so that people don't have to constantly reset their browsers.

"The Rogers approach certainly isn't respectful of consumer choice," he said. "The response that Rogers has been giving — 'this is our network and we'll do whatever we damn well please' — does highlight what is for many a concern."

Rogers took heat last year for putting its own content on other company's web pages. Rogers experimented with inserting messages on sites such as Google that warned users they were nearing their monthly download limit, but quickly backtracked after being accused of violating net neutrality principles.

The company, along with Bell Canada Inc., is currently at the centre of a storm regarding the throttling of internet speeds: Their decision to slow down peer-to-peer internet applications such as BitTorrent has prompted a complaint with the Canadian Radio-television and Telecommunications Commission, which has said a full inquiry into net neutrality is coming.

Bell is also embroiled in a CRTC dispute with its internet wholesale customers, a fight that has seen Google accuse it of breaking Canadian telecommunications law. The CRTC expects to rule on the dispute with the Canadian Association of Internet Providers in September.

Cerf, who joined Google as a vice-president and "chief internet evangelist" in 2005, developed the transmission protocols that the internet is based on back in the 1970s.