AT&T climbdown is a victory for net neutrality - or is it?
It's remarkable what the promise of a few million dollars in executive bonuses can do for an ethical debate. Last year, American telecoms companies - specifically, AT&T and Southern Bell Communications (SBC), which were seeking a merger - dropped dark hints that high-bandwidth sites such as YouTube ought to pay them for the extra data load they imposed on their networks.
In March Ed Whitacre, chief executive of AT&T, said that bandwidth- intensive applications had forced continual upgrades to its network to accommodate demand. In 2005 alone, he said, AT&T spent $11.5bn (£5.8bn) on capital expenditures for its wireline network. So it only made sense to charge those creating the demand, such as CNN, Google, Yahoo and so on - didn't it?
Yet Whitacre abruptly agreed at the weekend to some clauses guaranteeing "net neutrality" - that is, no charges. Why? To enable the much-delayed $87bn merger of the two companies, which will make it the biggest single US telco with a 30% market share.
But while some advocates of net neutrality were dancing for joy, others think that AT&T/SBC's promises are nearly worthless - and that only a Democrat-driven bill obliging phone companies not to discriminate between sources of data will keep information flowing freely.
The net neutrality debate reached fever pitch in the summer (Is it the end for net neutrality?, June 15 2006) when the then-Republican controlled House of Representatives dumped a bill that would have obliged telcos to carry data at the same speeds, regardless of its source.
But AT&T and SBC, having wanted to merge for a year, finally agreed to some demands by the newly Democrat House. AT&T agreed to offer "naked" broadband (that is, not tied to having an AT&T phone service), to fix prices for low-speed broadband and not to discriminate between data suppliers for two years.
Campaigners for neutrality whooped. "AT&T capitulated to supporters of an open and neutral Internet," said Ben Scott, policy director of Free Press, which coordinates the SavetheInternet.com coalition. "The agreement once and for all puts to rest the bogus argument that no one can define net neutrality. The FCC just did it, and the sky hasn't fallen."
Tim Wu, a professor at Columbia University Law School, said: "This means AT&T can't sell Yahoo! or CNN priority access to its customers over its broadband networks, or favour those content sources over unaffiliated blogs or search engines."
Except that there are some notable loopholes in the concessions. They don't apply to AT&T/SBC's planned high-speed IPTV service, which could run at 30Mb/s; so if Google or Yahoo launches online TV, it will have to go over the existing lower-speed net, which AT&T/SBC pegs (in the concessions) at 764Kb/s - which even today feels sluggish, when most Britons can get at least 512Kb/s. What's the use of a guarantee not to create a two-tier Internet if the company can build new tiers that are exempt from the guarantee?
The provisions don't apply either to AT&T/SBC's corporate customers which buy and resell its data capacity, so there are no guarantees there. And if Congress passes other laws affecting net neutrality, the concessions expire at once. Expect more lobbying this year for a Democrat-backed bill enforcing neutrality.
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