PARIS -- In a potential test case for Europe, the French government Monday ordered a big Internet service provider to stop blocking online advertisements, saying the company had no right to edit the contents of the Web for users.
The dispute has turned into a gauge of how France, and perhaps the rest of Europe, will mediate a struggle between telecommunications providers against Internet companies like Google (GOOG), which generate billions of dollars in revenue from traffic that travels freely on their networks.
European telecommunications companies want a share of that money, saying they need it to finance investments in faster broadband networks -- and, as the latest incident shows, they are willing to flex their muscles to get it.
Until now, European regulators have taken a laissez-faire approach, in contrast to the U.S. Federal Communications Commission, which has imposed guidelines barring operators of fixed-line broadband networks from blocking access to sites providing lawful content.
On Monday, Fleur Pellerin, the French minister for the digital economy, said she had persuaded the Internet service provider, Free, to restore full access. The company, which has long balked at carrying the huge volume of traffic from sites owned by Google without compensation, had moved last
"An Internet service provider cannot unilaterally implement such blocking," Pellerin said at a news conference Monday, after meetings with online publishing and advertising groups, which had complained about a possible loss of revenue.
While she acknowledged that it could be annoying "when five ads pop up on a site," she added that advertising should not be treated differently from other kinds of content. "This kind of blocking is inconsistent with a free and open Internet, to which I am very attached."
While rejecting the initiative by Free, Pellerin said it was legitimate for the company to raise the question of who should pay for expensive network upgrades to handle growing volumes of Internet traffic.
French Internet analysts said advertisements appearing on Google-owned sites or distributed by Google appeared to have been the only ones affected -- fueling speculation that the move was a tactic to try to get Google to share some of its advertising revenue with Internet service providers. Google's YouTube video-sharing site is the biggest bandwidth user among Internet companies.
Google was not represented at the meetings Monday with Pellerin. In an interesting twist, its case was effectively argued by other Web publishers, including French newspapers, even though these sites, in a related dispute, are seeking their own revenue-sharing arrangement with Google. Separately, French tax collectors are also looking into the company's fiscal practices, under which it largely avoids paying corporate taxes in France by routing its ad revenue through Ireland, which has lower rates. One proposal that has been discussed would be to use receipts from a tax on Google to support local websites.
In yet another dispute involving Free and Google, the French telecommunications regulator is investigating complaints that the Internet provider has been discriminating against YouTube. In that case, a French consumer organization, UFC-Que Choisir, said it suspected that Free was limiting customer access to YouTube because of the high amount of bandwidth the site consumed.