Fred Wilson says you should vigorously defend your reputation on the Internet.
When competitors make public and personal accusations, how are you going to respond, when customers are watching? It's a very low-road way to compete. Not much you can but weather the storm, keep offering the best service you can, figuring the smart customers will ignore the personal stuff.
BTW, for some reason I love metaphors that involve watching the river. ">
I have a river a few blocks from my house, with lots of benches, but this far south it isn't really a river, it's more of a bay.