AT&T’s New Tune on Net Neutrality
May 2nd, 2008 by alynnWhile Comcast’s blocking is the most talked about violation of Net Neutrality, new information calls into question AT&T’s offering of unfettered access to the Internet.
Before their reincarnation as AT&T the phone company — following their merger with SBC — they were AT&T, the long distance company. (You may remember their never-ending ad campaign, 1-800-CALL-ATT.) The difference between the new AT&T and the old one is the latter didn’t control any wires — they just used them. This distinction is at the center of the debate over Net Neutrality - the idea that those who own the wires cannot block or discriminate against the content flowing over the network.
As a long distance provider, AT&T relied on Net Neutrality rules to ensure access to the customers at the end of these wires. This changed after the company merged with SBC, and then BellSouth, making it the largest Internet service provider in the country. (This chart may help you make sense of this merger craze.) Once it gained power over customer’s Internet connections, AT&T turned into an ardent Net Neutrality opponent.
A Telco’s Change of Heart
On May 28, 2004, AT&T lawyers said:
“The Internet has flourished to date because of openness. Network owners do not tell subscribers which Web sites they can visit or which applications they can run over their Internet connections. …. The commission can directly prevent anticompetitive use of broadband transport facilities and foster unimpeded access to IP applications with modest technology neutral conduct regulation that merely prohibits broadband carriers from discriminating against unaffiliated IP applications an content.”
But here’s AT&T on June 15, 2007:
“There is no need to subject the Internet to a scheme of ‘nondiscrimination’ rules to protect anyone against anticompetitive conduct.”
And: “There is no potential upside to Net Neutrality regulation.”
And finally: “These ‘blocking’ concerns are a sham.”
AT&T Caught Blocking?
Peer-to-peer video distributer Vuze Inc, recently collected information that raises the question of whether AT&T customers were being provided a full and unfettered connection to the Web.
Given the lack of candid disclosure from Internet providers like AT&T, Vuze’s report attempts to shed much-needed light on whether these companies are providing customers with an open Internet experience.
If only AT&T would remember the way they used to be. It’s time they stopped fighting against the wishes of their own customers and started fighting for them.
May 2nd, 2008 at 7:11 pm
Since the primary goal of corporations is to make as much money as possible, I’m sure Comcast, AT&T, et al see the fight against Net Neutrality as yet another way to increase profits. I subscribe to AT&T DSL myself because it’s convenient and affordable, but I wish there was an economical alternative. The last thing I want to do is put more money into AT&T’s pockets. I live in San Francisco and I was very excited about the prospect of Google providing free wifi for the city, but that plan, as well as the following Earthlink project died thanks in part to our own Board of Supervisors - ridiculous! Now what?
May 4th, 2008 at 7:14 am
ELECTRIC COMPANIES DECIDE TO ELIMINATE NET NEUTRALITY AND CHARGE AT&T FOR “USING THEIR PIPES FOR FREE”
In response to AT&T’s reversal on net neutrality, electric companies have decided to eliminate a long tradition of net neutrality as well. Electricity will now be sold according to “content use” rather than “watt use”. The overhaul of electric rates will include “fast” and “slow” electric lanes with different watt and watt-hour prices depending on which appliances are using electricity.
A representative from “Hands-Off the Electric Grid”, Hike McHurry, indicated this change was necessary to prevent congestion collapse from the use of P2P Air Conditioners during peak periods on hot days:
“They’re ‘watt hogs’ that consume ‘exaflood watt-hours’ of electricity and ’shift cost’ from air conditioners to refrigerators. We’ll also be doing ‘deep packet-watt’ inspections to determine how all electricity is used so we can protect our property rights from electricity pirates who don’t use our appliances. We’re here to protect the right to eat from refrigerators for everyone and the socialism of network neutrality on the distribution grid stands in the way of this fundamental right.”
The change was widely applauded as necessary to provide incentives to invest and innovate in electricity in order to make it look more like today’s health and medical care industry in the U.S. After all, the only reason the electric industry never developed a “third broadband pipe” was due to repressive regulations of “grid neutrality” in the first place.
The first phase of the conversion will assess extra electric charges on facility-based broadband networks like AT&T, based on a reverse application of the Whitacre principle of “why should they use my pipes for free?”. The new content-based rate class for electricity will include the three basic types of broadband providers which depend on monopoly access to electricity distribution - telecom, cable and wireless, known as the “Hostage Pipe-Charge Class”.
When asked for a response to pay more for the use of electric pipes, AT&T’s ex-CEO Whitacre could not be found, but a confused spokesperson noted it “never used electric pipes for free” and instead, was supposed to get exclusive rights to the “Fast Lane Watt-Hour Package” after cutting a private deal in the back room with major electric distribution companies, the same way it’s planning to cut special deals downstream with MPAA, RIAA and Hulu for the use of bandwidth and GBs. After all, what’s good for the for Megabit is good for the Megawatt.
May 6th, 2008 at 7:29 pm
The article states:
“The difference between the new AT&T and the old one is the latter didn’t control any wires — they just used them.”
This is completely untrue. AT&T owned and controlled vast, continent-wide fiber routes — and still does.
“Once it gained power over customer’s Internet connections, AT&T turned into an ardent Net Neutrality opponent.”
This is a fabrication. What AT&T is opposed to is being forced to allow abuse of its network (e.g. via P2P). It was never forced to allow such abuse as a telephone company.
May 7th, 2008 at 9:32 am
[…] squash competition in order to protect its growing telecommunications empire. As the folks over at Save the Internet remind us, one way the company is doing this is by actively undermining the principle of Net […]
May 9th, 2008 at 1:09 pm
Economist Payne says all should share the Pain
Hoping for an internet that consists of lots of dumb, fat pipes regulated the way electricity is regulated by local utilities, economist Barry Payne today called for an Internet 2.0 run by government.
“We need a new Broadband Bureau at the FCC that can carefully administer and regulate the way traffic on the Internet moves,” said Payne, a former FCC staff member. “Imagine how fine it would be if every network engineer had to pre-approve their data management protocols with staffers, lawyers, and political appointees at the Commission.”
Payne made clear he envisions a 5-7 year period in which the FCC, under a new chairman, can work to devise regulations to implement mandatory net neutrality statues expected to be enacted by a Democratic Congress with President Obama’s support.
“Enough of the market working to enrich the profits of these filthy corporations that manage the networks of today,” said Payne. “It’s time to turn the networks back to the people so that anyone who spams or downloads music and videos illegally can have the same Internet access as any grandma getting pictures from the family.”
Payne proposes a “netural network” where network providers are prevented from carrying voice, video, or text data with any distinguishing characteristics. “In our new world order, people will care enough for each other to be polite when they are downloading and uploading and they will watch a new FCC-installed “Net-cam” that will show when the pipes are getting a little clogged. We can all work together to manage traffic ourselves. Just like we yield politely to each other when we change lanes on a crowded freeway. Can’t we all just get along?”
May 9th, 2008 at 2:29 pm
SHAM ARGUMENTS AGAINST THE CENTRAL ISSUE OF NET NEUTRALITY - DISCRIMINATION
Opponents of net neutrality claim in error that it will prohibit or discourage certain kinds of discrimination necessary to encourage innovation, investment and adoption of new technologies for broadband service.
Net neutrality, as it should be defined, is applied conservatively as a “principle”, not as a burdensome prescription of particular metrics. It does not regulate prices or TOS beyond a neutral interface with content, nor does it dictate how an ISP is to manage the network beyond that interface.
If an ISP prefers 10 different pricing plans with 4 levels of service quality, coupled with congestion management through a variety of price and non-price rationing - including restrictions on bandwidth in Mbs or GBs in volume - net neutrality prohibits or discourages none of these options. And net neutrality certainly does not interfere with the protection of property rights of content or security of the network.
“Discrimination” has different meanings, and opponents of net neutrality have advanced over-generalized scenarios of discrimination in attempts to undermine net neutrality and avoid debating concurrent serious errors of analysis.
Examples are Richard Armey and Dan Glickman, the latter giving a recent speech before the National Press Club on the virtues of intellectual property right protection without one mention of “net neutrality”, which he denounced so forcefully a few weeks earlier as an enemy of property rights.
Clearly, Glickman’s strategy was to avoid specific questions on net neutrality itself while undermining it with generalized fearmongering couched in folksy tales of individual entrepreneurship - the very target of opponents to net neutrality. Unlike the brick-and-mortar movie outlets glorified by Glickman in the speech - over which his clients retain some market power - such power is diluted and diminished in a net neutral content market, which is exactly why Glickman is attempting to undermine it.
Under net neutrality, ISPs could continue to discriminate by bandwidth tier, GB volume and service quality as desired. Claims that they could not has been seriously confused with practices and claims by Comcast and others that actually refuse to engage in this legitimate discrimination by refusing to identify the discriminating differences in the first place.
Even the FCC Commissioners and others opposed to net neutrality were taken aback by Comcast refusals to place any metrics or limits on what customers were sold beyond an “up to” maximum of bandwidth, rendering its availability to produce GBs to the sole, arbitrary discretion of Comcast.
This defeated any possibility of a “responsible” customer in a “free market” making choices and abiding within the bounds of a contract so one-sided, it reduced the availability of bandwidth to an “as is” condition on the spot market for any given billing period. Transparency doesn’t just mean that prices and TOS are visible for all to see - there has to be something to be seen in the first place.
By obscuring and bypassing legitimate discrimination, Comcast is able to engage in non-neutral discrimination among customers and content by tying both to bandwidth and GB use. The result is network management of this use by arbitrary interruption, delay and cancellation at the sole discretion of Comcast on a case-by-case basis.
This is the kind of “bad” discrimination economists refer to as eliminated by effective competition, which forces the “good” kind of discrimination to be adopted by players in the market for competition to move resources to their highest valued use. In contrast to facility-based internet networks, the content market which flows over them can be highly competitive and prevent most “bad” discrimination while enabling “good” discrimination - but only when the networks on which content depends also engage in the “good” discrimination provided under net neutrality.
The potential of “bad” discrimination by network providers cannot be eliminated by competition in most places, and acts to undermine the “good” discrimination among competing content producers and consumers. Transparency of prices and TOS for broadband service is the first step and their uniform (neutral) administrative application is the second step necessary to preserve and encourage the “good” discrimination in the content market.
When opponents of net neutrality are faced with these distinctions between discrimination and competition, they make no counterarguments on record against them, instead invoking the usual bogus claims of harm to incentives for innovation and investment as well as property rights and security, for which “good” discrimination is necessary protection. The most obvious, unrefutable contradictions to these claims appear in broadband service for twice the speed at half the price in countries other than the U.S.
It’s a sham argument which deserves to be brought into the full light of day through public discourse and debate for the last frontier of widespread, effective competition and free political speech.
Net neutrality does not undermine “good” discrimination and indeed, depends on it in the network market for broadband service to enable the offset or elimination of “bad” discrimination by virtue of the competition enabled in the content market.
In no way does this deter incentives to innovate, invest in and protect broadband networks and property content through “good” discrimination, by discouraging the exploitation of “bad” discrimination which indeed, results in massive economic losses over and above the damage to free political speech.
May 11th, 2008 at 3:32 pm
Not only would regulation deter incentives to innovate — it already has. Our ISP’s investors have told us that the uncertainty created by the multiple bills now being considered in Congress — any of which would kill small, innovative broadband providers — have dampened their interest in investing more money in any company in this industry. They see — correctly — that these bills would result in a cable/telco duopoly with market power, and the end of consumer choice.