French firm’s ad blocking spurs Web battle

— Xavier Niel, the French technology entrepreneur, has made a career of disrupting the status quo.

Now he has dared to take on Google and other online advertisers in a battle that pressures the Web companies to use the wealth generated by ads to help pay for the network pipelines that deliver the content.

Niel’s telecommunications company, Free, which has an estimated 5.2 million Internet access users in France, began last week to enable its customers to block Web advertising. The company is updating users’ software with an ad-blocking feature as the default setting.

That move has raised alarm among companies like Google that have based their entire business models on providing free content to consumers by festooning Web pages with paid advertisements. Although Google so far has kept largely silent about Free’s challenge, the reaction from the small Web operators who live and die by online ads has been vociferous.

No Internet access provider “has the right to decide in place of its citizens what they access or not on the Internet,” Spiil, an association of French online news publishers, said in a statement Friday.

The French government has stepped into the fray. Today, Fleur Pellerin, the French minister for the digital economy, plans to convene a meeting of the feuding parties to seek a solution.

Free’s shock to advertisers was widely seen as an attack on Google, and is part of the larger, global battle over the question of who should pay to deliver information on the Web - content providers or Internet service providers.

An attempt to rewrite the rules failed at the December talks of the International Telecommunication Union in Dubai, United Arab Emirates, after the United States and other nations objected to a proposal that, among other measures, would have required content providers to pay.

Niel declined to comment through a spokesman, Isabelle Audap.

But he has often complained that Google’s content, which includes the ever-expanding You-Tube video library, occupies too much of his network’s bandwidth, or carrying capacity.

“The pipelines between Google and us are full at certain hours, and no one wants to take responsibility for adding capacity,” he said during an interview last year with the news magazine Le Nouvel Observateur. “It’s a classic problem that happens everywhere, but especially with Google.”

Analysts said that French regulators would probably not oppose an agreement between Free and Google aimed at smoothing traffic flows and improving the quality of the service, as long as competitors were not disadvantaged. But they said regulators would probably not allow an Internet access provider to unilaterally block content.

When it comes to blocking ads, though, disgruntled consumers do not have to rely on their Internet service providers. Consumers already have the option of downloading software like Adblock Plus to do the job.

Free is the second-largest Internet access provider in France, behind Orange, which is operated by France Telecom and has 9.8 million Internet customers. Because Free seeks to be a low-cost competitor, the company may feel itself particularly vulnerable to the expense of providing capacity to meet Internet users’ growing desire to download videos, music and the like.

Pellerin, the digital economy minister, expressed sympathy for Free’s position in an interview with Le Figaro earlier this month.

“There are today real questions about the sharing of value between the content providers - notably in video, which uses a lot of bandwidth - and the operators,” she said.

“In France, and in Europe,” Pellerin added, “we have to find more consensual ways of integrating the giants of the Internet into national ecosystems.”

Google, which is engaged in delicate antitrust negotiations with the European Union, has been largely silent about the Free episode, appearing content to let other aggrieved parties take the lead. Al Verney, a Google spokesman in Brussels, said, “We are aware of Free’s actions and are investigating the impact.” He declined to comment further.

Free’s ad-blocking campaign began last week when it introduced a new generation of hardware and software that enables users to block Web advertising. Free has set the ad blocking software as the default option.

Jean-Baptiste Fontana, founder of Frequence-sud.fr, a news site, argued that smaller websites were being left to suffer the collateral damage in Free’s fight with Google.

On Atlantico, an online news site, Fontana wrote: “Numerous websites, and particularly the online press, have worked out a moral contract with their readers: you get valuable information, we don’t make you pay, because the advertisers pay for you.”

But “should either the reader or the Internet service provider break that contract, the entire system collapses,” Fontana continued. “It brings us back to the economic model of the press: Who pays for information ?”

Business, Pages 20 on 01/14/2013

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