The puzzle fits neatly together.  MSN will never support an open internet.  It's making far too much money from European walled gardens, and it plans to move its act to the U.S..  Here's how this works:

Deutsche Telekom's revenues are being undermined by the growth of VoIP services.  (DT is the monopoly incumbent telcom provider in Germany.)  And its traditional model is threatened by new fast-growing municipal networks:  Both Amsterdam and Paris are making great strides in laying their own fiber and avoiding the incumbent telecom operator.  DT’s responsive tactics are very similar to what incumbent telcos here in the U.S. are working towards:  acquire legislative protection for complete control over their broadband infrastructure. 

Deutsche Telekom has persuaded the German government that its investment in fiber needs to be protected from regulatory intervention -- including any obligation to interconnect on mandated terms with anyone else.  DT has threatened (sound familiar?) not to build a planned 50-city fiber network unless it gets the protection it wants.

The European Commission has reacted strongly to this suggestion, threatening legal action against Germany.  Viviane Reding, the EC commissioner for information society and media, said "We cannot afford to create new monopolies out of short-term political opportunism."

In response, DT is saying (sound familiar?) "We cannot possibly invest €3bn [$3.9 billion] in setting up a network without receiving adequate protection for our investment in return."

DT, and its friends in the German government, takes the view that (sound familiar?) "new and emerging markets in which market power may be found to exist because of ´first-mover´ advantages, should not in principle be subject to ex-ante regulation."

DT has announced that it intends to remain Europe’s “number one” telecom operator, and it is poised to buy other network operators to hang onto this status.

MSN recently made a deal with DT that was MSN's second biggest deal ever. Under this deal, MSN will provide IPTV software to Deutsche Telekom.  DT will use this software, and boxes provided by Cisco, to provide packaged services to consumers -- starting this month.  (This will be the biggest roll-out yet of triple-play services.)  Consumers will be offered about 100 channels, including existing satellite and cable feeds, and video-on-demand movies.   This MSN platform will also offer web surfing, VoIP, and “other interactive entertainment services.”

MSN has similar deals in place with British Telekom, Telecom Italia, Swisscom, and the new combined AT&T entity. 

So -- that's it.  This is when the internet becomes an "interactive entertainment service," with help from legislators around the world who will lift regulatory requirements of access and interconnection.  All of this is very very good for MSN and Cisco and network providers. 

Yes, DT has more market power than our telcos here do.  But that's only a matter of degree, not a matter of kind. 

Of the seven Baby Bells formed after the breakup of Ma Bell in 1984, only four remain.  The old AT&T, Southwestern Bell, Ameritech, SNET, Pacific Bell, and BellSouth are now collectively “AT&T.”  Similarly, GTE, Nynex, Bell Atlantic, and MCI have joined together to form Verizon.  Two Baby Bells, the new AT&T and Verizon, control telco access around the country.  The vast majority of Americans have at most two choices of broadband provider wherever they are, and competition between these providers is not intense.  Prices have stayed high and speeds have stayed low.  In effect, the industry is re-monopolizing.

The European Commission is vehemently opposing what DT wants to do.  In years past, the U.S. government hasn't looked kindly on anticompetitive actions by MSN.  We should wake up and recognize that the DT approach is coming to our shores, and notice what the European Commission is saying.