SAN JOSE, Calif.-- The Internet applications and development community needs to get itself organized to take on the big telecom service providers in Washington, or risk seeing network service providers take over control of the Internet and stifle innovation in the process, Stanford University law professor Lawrence Lessig told VON's Communications Policy Summit here today.

His speech was well received by most, although it lacked specifics on what, if anything, the federal government should be doing to guarantee Internet neutrality or even define what that is.

Lessig took a quick tour through U.S. communications policy history to show how newspapers and radio started as grassroots efforts but were taken over by large commercial interests to the detriment of diversity and innovation and economic development in the process. He particularly vilified AT&T, for its opposition to competitive telephone appliances in the 1940s and early packet-switching networks in the '60s, and for an AT&T Cable executive's public statements against video streaming in the late '90s.

And while he offered many philosophical arguments for fighting network operator control of Internet content, Lessig told the audience the real issues are economic.

"Networks are bigger, more valuable and more important to our economy than ever before," Lessig said. "We should care about this because of the economic growth this would produce. If we allow network operators to relock the network, we are choosing to produce a much less valuable network."

For one thing, venture capitalists will stop funding innovative applications and service developers if they must take on the Bell companies to succeed, he said.

Lessig stopped short of saying what return on investment network operators should be allowed to earn, and the one individual who asked a question on that topic was greeted with profanity by a member of the audience.

"This is the hard policy question," Lessig said. "They [network operators] want total control. My point is, is there another way to give them a rate of return? I don't know."

At the very least, he said, network operators should be forced to play in the free market and not be the beneficiaries of state socialism, he said. "We've had enough of socializing their risk."

Most of the VON audience was clearly enthralled by Lessig's remarks, but there were a few skeptics.

"He needs to put some numbers to the economic arguments," said Blair Levin, former FCC chief of staff, now a telecom analyst at Stifel, Nicolaus & Co., adding that there are also issues regarding government control of private assets to be addressed.

Speaking on a later panel, Gary Epstein, another former FCC bureau chief and now partner in Latham & Watkins, representing both content and network providers, said Lessig "gave a great call to arms, but lost me at the end on how to translate it all into real action."

Behind the rhetoric, there needs to be details, he said, and a rational review of critical issues, such as the degree of control that network operators yield, the dangers that power creates and potential remedies.

Paul Kouroupas, vice president of regulatory affairs at Global Crossing, said the VON community would be much better off taking on the telecom giants in the marketplace than in Washington. "You wouldn't go to Lambeau Field and take on the Green Bay Packers, would you?" he queried. "You are good in the market, that's where you need to take them on."

There is also danger even in winning a battle in Washington if it invites general regulation of the Internet, said Rick Witt, a former MCI regulatory executive now with Net's Edge Consulting.

"If you don't pay attention, you will swamp this industry with regulation--it's the death of 1000 cuts," he said.