If politicians want to effect economic recovery, national competitiveness, good public health and high civic engagement, they have a duty to keep the internet free and open. But politicians around the world seem willing to sacrifice their national interest to keep a few powerful phone and telcoms companies happy.

Take the Telcoms Package now before the EU: among other things, the package paves the way for ISPs and Quangos to block or slow access to websites and services on an arbitrary basis. At the same time, ISPs are instituting and enforcing strict bandwidth limits on their customers, citing shocking statistics about the bandwidth hogs who consume vastly more resources than the average punter.

Between filtering, fiddling connection speeds and capping usage, ISPs are pulling the rug out from under the nations that have sustained them with generous subsidies and regulation.

Take filtering: by allowing ISPs to silently block access to sites that displease them, we invite all the ills that accompany censorship – Telus, a Canadian telcom that blocked access to a site established by its striking workers where they were airing their grievances. Around the world, ISPs co-operate with censorious governments in their mission to keep their citizens in the dark: for example, ISPs in the United Arab Emirates are blocking access to stories about a UAE royal family member who was video-recorded torturing a merchant with whom he had a business dispute. As a matter of policy, Transport for London isn't allowed to block us from riding the tube to a rally in support of striking transit workers; British Gas doesn't turn our heat off if they suspect we're housing a benefits cheat; and BT doesn't divert our phone calls if we're ringing up a competitor to change carriers. Giving an ISP censorship powers — and then layering censorship in secrecy and arbitrariness — we make the internet a less trustworthy and less useful place to be.

ISPs would also like to be able to arbitrarily slow or degrade our network connections depending on what we're doing and with whom. In the classic "traffic shaping" scenario, a company like Virgin Media strikes a deal with Yahoo to serve its videos on a preferential basis, and then slows its customers' connections to Google, Hulu, and other videohosting sites to ensure that Virgin's videos are the quickest to load. As the Craigslist founder, Craig Newmark, said, this is like the phone company putting you on hold when your ring your local pizzeria, with a message inviting you to press one to be immediately connected to Domino's, its "preferred pizza partner".

But the real action in network fiddling isn't the battle between giants such as Yahoo and Google. Both well-established, have armies of otherwise unoccupied "business development" people lying around, and are handily capable of fanning out across the globe and buying lunch for their opposite numbers at every telcoms operator on the planet. The real victims of network discrimination are the nimble little startups, the firms that are in the same position today that Google was in 10 years ago when it consisted of a few marginally funded hackers and some taped-together hardware under a desk.

Google needn't be the last Google. It needn't be the last firm to emerge from the fevered imagination of two bright kids and turn the world on its ear. And it need not always come from Silicon Valley. Just as Research in Motion was able to take the world by storm from Waterloo, Ontario; just as Moo.com was able to conquer the world's business-card needs from Clerkenwell, so, too could the next remarkable startup emerge from the UK.

Unless, that is, the cost of entry into the market goes up by four or five orders of magnitude, growing to encompass the cost of a horde of gladhanding negotiators who must first secure the permission of gatekeepers at the telcoms giants. In that case, only the least experimental, safest, lowest-risk/lowest-return firms will be capitalized, because no one wants to take a big plunge on a risky proposition that could be stopped dead in its tracks by a phone company that's already given pole position to an incumbent.

Finally, there's the question of metered billing for ISP customers. The logic goes like this: "You have a 20Mbs connection, but if you use that connection as though it were unmetered, you will saturate our bandwidth and everyone will suffer." ISPs like to claim that their caps are "fair" and that the majority of users fit comfortably beneath them, and that only a tiny fraction of extraordinary bandwidth hogs reach the ceiling.

The reality is that network usage follows a standard statistical distribution, the "Pareto Distribution," a power-law curve in which the most active users are exponentially more active than the next-most-active group, who are exponentially more active than the next group, and so on. This means that even if you kick off the 2% at the far right-hand side of the curve, the new top 2% will continue to be exponentially more active than the remainder. Think of it this way: there will always be a group of users in the "top 2%" of bandwidth consumption. If you kick those users off, the next-most-active group will then be at the top. You can't have a population that doesn't have a ninety-eighth percentile.

But the real problem of per-usage billing is that no one – not even the most experienced internet user – can determine in advance how much bandwidth they're about to consume before they consume it. Before you clicked on this article, you had no way of knowing how many bytes your computer would consume before clicking on it. And now that you've clicked on it, chances are that you still don't know how many bytes you've consumed. Imagine if a restaurant billed you by the number of air-molecules you displaced during your meal, or if your phone-bills varied on the total number of syllables you uttered at 2dB or higher.

Even ISPs aren't good at figuring this stuff out. Users have no intuition about their bandwidth consumption and precious little control over it.

Metering usage discourages experimentation. If you don't know whether your next click will cost you 10p or £2, you will become very conservative about your clicks. Just look at the old AOL, which charged by the minute for access, and saw that very few punters were willing to poke around the many offerings its partners had assembled on its platform. Rather, these people logged in for as short a period as possible and logged off when they were done, always hearing the clock ticking away in the background as they worked.

This is good news for incumbents who have already established their value propositions for their customers, but it's a death sentence for anything new emerging on the net.

Between these three factors – reducing the perceived value of the net, reducing the ability of new entrants to disrupt incumbents, and penalizing those who explore new services on the net – we are at risk of scaring people away from the network, of giving competitive advantage to firms in better-regulated nations, of making it harder for people to use the net to weather disasters, to talk to their government and to each other.

Telcoms companies argue that their responsibility is to their shareholders, not the public interest, and that they are only taking the course of maximum profitability. It's not their business to ensure that the Googles of tomorrow attain liftoff from the garages in which they are born.

But telcoms firms are all recipients of invaluable public subsidy in the form of rights of way and other grants that allow them to string their wires over and under our streets and through our homes. You and I can't go spelunking in the sewers with a spool of cable to wire up our own alternative network. And if the phone companies had to negotiate for every pole, every sewer, every punch-down, every junction box, every road they get to tear up, they'd go broke. All the money in the world couldn't pay for the access they get for free every day.

If they don't like it, they don't have to do it. But we don't have to give them our sewers and streets and walls, either. Governments and regulators are in a position to demand that these recipients of public subsidy adhere to a minimum standard of public interest. If they don't like it, let them get into another line of work – give them 60 days to get their wires out of our dirt and then sell the franchise to provide network services to a competitor who will promise to give us a solid digital future in exchange for our generosity.