The internet is supposed to provide for the free flow of all manner of information, and most of the time it does. For consumers and businesses that are accustomed to free e-mail, free access to countless websites, free use of online tools ranging from video hosting to file storage to elaborate personal pages on Facebook, and even free international phone calls, the net is one of the great bargains of all time.

But of course it takes money to run the internet, and there are numerous high-stakes skirmishes now underway that will determine how that money flows – and whether we'll continue to enjoy the free flow of information (and I mean that in more ways than one).

The key players, interestingly, are the telephone companies – the descendants of the old-time telephone monopolies that were supposed to be at, at best, faded relics of a different industrial era. In the US, Verizon and AT&T, which together amount to a reconstitution of the old Bell system, are emerging as powerful gatekeepers, and they're likely to exercise their leverage in all kinds of ways.

The phone companies' power derives from their control over the physical infrastructure – the internet ‘backbones’ that route traffic around the world, the wires that connect homes and businesses to those backbones, and the collection of government licences, radio towers and switching systems that make up the wireless communications networks.

There are non-telephone-company players in all of these businesses, but telecom has always been an enterprise where scale matters a lot, and the phone companies' dominance only seems to be growing.

In the old days, phone companies were ‘common carriers’, meaning that they were required to be neutral and non-discriminatory when it came to the content of the information flowing over their wires. Not so anymore – and thus it's only logical that as providers of internet service, the phone companies would look for ways to make money from some of that content.

One idea now floating around would have internet service providers collect a sort of tax on file-sharing activities that are used mainly to pirate music and video. This would help compensate owners of the content and, conveniently, would also be good for the internet service providers.

The phone companies are also eager to provide tiered services in which websites that paid them money would be more easily accessible to their Internet customers than ones which did not. They also have the power to do things like direct certain kinds of internet searches to their own websites, or even block access to sites for whatever reason.

These are the issues at the heart of the so-called "net neutrality" argument. In principle, sufficient competition in the internet access business would make all this moot; if you didn't like the policies of your service provider you could simply pick another one. But most people can choose from, at best, two providers of high-speed internet – the phone company and the cable company – and that's just not enough choice to keep everyone honest.

A similar set of issues is arising in the wireless communications business. In the recent government auction of a big new swath of wireless spectrum, the big winners were … Verizon and AT&T. Google, which made a lot of noise about participating, didn't bid seriously in the end, though it did help force a change in the rules that will require the new wireless networks (unlike the current ones) to be open to devices and services that are not offered by the carriers themselves.

But how open those new networks will really be remains, well, an open question. The phone companies have a 100-year history of resisting anything that limits their control over their networks, and they've got pretty good at that.

In the meantime, some prognosticators are worrying that insufficient investment in internet infrastructure is going to lead to a grave network capacity shortage as huge volumes of video begin to gum up the works. The phone companies will use this spectre as a way to fight off regulation – if you don't let us make money in all these new ways, we won't be able to invest! – but personally I'm doubtful that this will be an issue.

Phone companies are good at deploying lots of lobbyists to make sure the rules are in their favour. They're also good at deploying lots of capital to build lots of network capacity. What we pay for all of that, and in what way – that is the multi-billion-dollar question.

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Jonathan Weber is the founder and editor in chief of NewWest.Net, a regional news service focused on the Rocky Mountain West in the United States. He was previously the co-founder and editor in chief of the Industry Standard

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