DSL Prime: The Fine Print in the Merger Agreement

AT&T's proposal has generated plenty of talk on the internet. Here's what the smartest people are saying.

by Dave Burstein of DSL Prime and Future of TV [January 4, 2007]

Policy at end:

The details of why AT&T's proposal needs political backup to ensure Net Neutrality.
So now Kevin Martin—and Congress—have to make sure they adhere to the principles. I should say I'm not an objective journalist on this one. I requested an ex parte conversation with the four commissioners or their staff as soon as I realized what was going on, although they ignored my request so far as well as a similar request by one of the half dozen most distinguished engineering professors on the Internet. It's probably a severe breach of the FCC open access principles that they are not even responding to ex parte requests after dropping a bombshell last night. My friends on the basic issue are flaming me all day, accusing me of "splitting the movement and maybe risking all." That's nonsense.

AT&T writes "AT&T/BellSouth also commits that it will maintain a neutral network and neutral routing," which sounds great. On Page 10, they make that hollow by writing "This commitment also does not apply to AT&T/BellSouth's Internet Protocol television (IPTV) service." An empirical look at AT&T's actual network and prior comments make clear it is precisely the "IPTV" network they will use for their privileged content. What they are calling the "IPTV" part of the network has Microsoft software and Alcatel 7750 routers designed for quality of service. These are the tools to make sure video gets through "undegraded." They have not installed similar on the older parts of the network, and will shunt "unfavored" traffic there instead. When those lines are busy, video will start dropping out. There's some language AT&T can't favor different bits on the 1998 connections, but not that they can't degrade them all and force TV to what they will call "IPTV."

So they have a 1998 style network (six meg downloads, tops) that they say is fine for Internet users. Then they prepare to overload it, meaning congestion slows down video. If you want to reliably get a live movie through at TV quality, pay us for CDN, IPTV, or whatever we choose to call it to get around this agreement.

To verify this, ask an engineer such as AT&T's CTO Chris Rice whether video on the part they are separating as "broadband Internet access service" will always get through with the quality they receive it at the peering point. His only answer will be "sometimes." Ask the supporters of the proposal, especially those speaking for the public interest, if AT&T explained to them that Internet video could be degraded, unless AT&T (with a financial interest) diverted it to the newer routers. It also directly contradicts what AT&T VP Cicconi told the press "We will not degrade," the same words SEO Ed Whitacre used testifying before the Senate. This sounds likely a minor technicality, but the web is already identifying the smoking gun. Mike Masnick at Techdirt wrote after midnight

And By The Time Anyone Reads The Sneaky Fine Print On AT&T's Concessions, The Merger Will Be Done
from the fooled-ya dept

http://www.techdirt.com/articles/20061229/001833.shtml

"A few hours ago, we wrote about the concessions AT&T agreed to in order to get their merger with BellSouth approved—possibly today. It was a little strange to see the concession letter come out late Thursday night before New Years, but the concessions seemed genuine enough, and many of the consumer groups fighting the deal accepted the terms and agreed that it looked like AT&T had agreed to live up to network neutrality rules. Of course, the fine print may actually tell a different story. "

And from Rob Hyndman:

"First, this prescient fine print caution from Russell Shaw at ZDNet, and then the money post … there may well be a devil in the details. "

Jeff Pulver also joined in, with the temperate comment: "Many pundits will likely claim that the concessions put forward by AT&T last night in order to gain merger approval before the end of the year advance the cause of Net Neutrality and the open Internet. …But are the concessions a bona fide commitment to meaningful Net Neutrality? I, however, do fear that, in the long run, AT&T might have given up nothing to the FCC, nothing to the Internet application providers, nothing to the users of the Internet and broadband networks. … Only time will tell which pundits will be proven correct."

Law Professor Susan Crawford adds "The day the Internet became cable television …AT&T joins the trickster pantheon with this move. (Other well known recent tricksters include Br'er Rabbit and Bugs Bunny.) Law Professor Tim Wu in an e-mail takes the other side, and I'll post his thoughts if he gives permission.

Any reporter or politician who claims the AT&T/BellSouth deal significantly protects Network Neutrality is counting on public outrage to prevent the company from exploiting the agreement, not the actual agreement. That doesn't mean the government should have stopped the deal, on which reasonable people could differ. People like Roy Gifford make honest arguments government should not get involved for other reasons. But let's keep disinformation out of the debate.

If I had more time, I'd explain how AT&T at modest cost could deliver a modestly open network and a dozen other issues that came up when I read it. Special thanks to the folks at the Wall Street Journal who posted the complete file last night.

Copyright 2007 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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