Friday, December 29, 2006

 

Did AT&T blink on network neutrality?

ATTEarlier in the month, I wrote about the horse-trading underway to gain FCC approval for the AT&T (NYSE: T) merger with Bell South (NYSE: BLS).

In a letter to the FCC yesterday, AT&T makes a number of new commitments to try to win over the support of at least one of the two Democrat Commissioners who oppose approving the deal.
AT&T/BellSouth also commits that it will maintain a neutral network and neutral routing in its wireline broadband Internet access service. This commitment shall be satisfied by AT&T/BellSouth's agreement not to provide or to sell to Internet content, application, or service providers, including those affiliated with AT&T/BellSouth, any service that privileges, degrades or prioritizes any packet transmitted over AT&T/BellSouth's wirelines broadband Internet access service based on its source, ownership or destination.
This is the portion of the commitment that people point to. However, there are conditions.
This commitment shall apply to AT&T/BellSouth's wireline broadband Internet access service from the network side of the customer premise equipment up to and including the Internet Exchange Point closest to the customer's premise, defined as the point of interconnection that is logically, temporally or physically closest to the customer's premise where public or private Internet backbone networks freely exchange Internet packets.
This seems to permit AT&T flexibility within its own backbone.
This commitment does not apply to AT&T/BellSouth's enterprise managed IP services, defined as services available only to enterprise customers 16 that are separate services from, and can be purchased without, AT&T/BellSouth's wireline broadband Internet access service, including, but not limited to, virtual private network (VPN) services provided to enterprise customers. This commitment also does not apply to AT&T/BellSouth's Internet Protocol television (IPTV) service. These exclusions shall not result in the privileging, degradation, or prioritization of packets transmitted or received by AT&T/BellSouth's non-enterprise customers' wireline broadband Internet access service from the network side of the customer premise equipment up to and including the Internet Exchange Point closest to the customer's premise, as defined above.
Which seems to permit AT&T to offer its own TV services as a preference to over-the-top TV. It is also interesting that the commitment not to discriminate based on "source, ownership or destination" does not include "type of application." Could the company degrade an entire class of service, such as over-the-top VoIP or peer-to-peer file exchange?

The other potential way for AT&T around the commitment is simply waiting two years or hoping for legislation that addresses network neutrality, possibly permitting carriers more flexibility.
This commitment shall sunset on the earlier of (1) two years from the Merger Closing Date, or (2) the effective date of any legislation enacted by Congress subsequent to the Merger Closing Date that substantially addresses "network neutrality" obligations of broadband Internet access providers, including, but not limited to, any legislation that substantially addresses the privileging, degradation, or prioritization of broadband Internet access traffic.
The concessions seem to be enough to please the "Save the Internet" crowd. Will it, together with the rest of the offer, be sufficient for the FCC holdouts?

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