  A dichotomy in regulatory treatment and corporate cultures exists between
Internet Service Providers (ISPs) and telecommunication carriers. Telephone
company executives (Bell Heads) may resent regulation, but they accept their
fate and work creatively to exploit anomalies and opportunities to secure a
regulation-conferred competitive advantage. Most ISP executives (Net Heads)
appear to embrace a libertarian attitude, strongly opposing any government
involvement. Despite the clash of cultures, the telecommunications and Internet
worlds have merged. Such convergence jeopardizes the ability of Net Heads to
avoid some degree of regulation, particularly when they offer services
functionally equivalent to what their Bell Head counterparts offer.
  This paper will assess the regulatory consequences when telecommunication and
Internet services converge in the marketplace and in terms of operating
technologies. The paper identifies commercial developments in the Internet to
support the view that the Internet has become more hierarchical and more like
telecommunication networks. The paper concludes that telecommunication carriers
will display superior skill in working the regulatory process to their
advantage. The paper suggests that Bell Heads will outmaneuver Net Heads
particularly when the revenue siphoning effect of Internet-mediated services
offsets the revenues generated from ISP leases of telecommunication
transmission capacity.
