Friday, December 29, 2006


Loophole watch in AT&T-BellSouth merger

We've come a long way, baby!

Our lobbying helped convince FCC Commissioner McDowell to honor his ethics commitment and remain on the sidelines for the AT&T BellSouth vote.

Then we got AT&T's Ed Whitacre to change his tune from, ”I’m not even sure what Net Neutrality means,” (also cf. Mike McCurry, What, exactly is the definition of Network Neutrality anyhow?) to today's clear, meaningful statement [.pdf] of how the merged AT&T/BellSouth would implement Network Neutrality, to wit:
AT&T/BellSouth will conduct business in a manner that comports with the principles set forth in the Commission's Policy Statement, issued September 23, 2005 (FCC 05-151). [aka the Martin FCC's Four Entitlements -- David I].

AT&T/BellSouth also commits that it will maintain a neutral network and neutral routing in its wireline broadband Internet access service. 15 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 wireline broadband Internet access service based on its source, ownership or destination.
See! They do know what Network Neutrality means after all! And they were willing to write it down for the FCC -- and all the world -- to see. This is a huge victory. Woohoo!

But did ATT/BS have its fingers crossed behind its back when it "conceded" to network neutrality? Dave Burstein [link] and Susan Crawford have called our attention to a potentially important loophole. Crawford points out that the agreement specifically excludes the AT&T/BellSouth IPTV service, and that service is now named U-verse. And, she points out, in other documents describing the U-Verse offering, Internet access . . . "cannot be purchased separately -- purchase of AT&T U-verse TV required." And, she says, U-verse will be the product they'll push, not the weaker, 768 kbit/s (yes **K**bit/s) wireline broadband service in the pre-merger agreement [.pdf].

Also, the fine print of the agreement says that the Network Neutrality provisions apply
. . . from the network side of the customer premise equipment up
to and including the Internet Exchange Point closest to the customer's premise . . .
Notice ". . . the NETWORK SIDE of the customer premise equipment . . . " Why would a telco care about the PREMISES SIDE? Why indeed. It would care because the customer's equipment (router, set-top box, etc.) (a) can be locked to the network service provider, (b) can contain discriminatory middleware downloaded by the service provider, thus (c) can be the very instrument of traffic discrimination -- even when the access network itself is neutral!

So, in summary, we have a service, U-verse, that is exempt from Network Neutrality (and specifically, that is exempt from the "Freedom (or entitlement) to attach legal devices of our choosing," AND we have the customer's set top box exempt from the scope of the agreement, we have provided AT&T/BS the means to render the proposed Network Neutrality condition on the merger violable, and, if Susan's interpretation of U-verse is correct, so weak as to be meaningless. Unless, of course, the telco is a good guy, obeys the spirit of the agreement, and would never use the loopholes it engineered into the agreement against the agreement's spirit.

The agreement is, indeed, a great victory. We just need a few words fixed. How about removing the IPTV restriction, for starters. Or including the customer premises device in the Network Neutrality provisions, so we can, truly, attach any legal device.

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It looks like AT&T wants to achieve the same kind of lock-in with their "customer premises devices" that they've already achieved with their cell-phones.

The cycle repeats itself.
Judging from the express reservation of the IPTV AT&T network, I bet we'll see a dispute about whether fiber is included. First would fiber be included as part of wireline Internet access when the FCC has made a copper/glass and legacy/new field distinction? Second why would AT&T expressly take Uverse/IPTV networks off the table if they didn't think they were safeguarding fiber? Third what difference does it make when the FCC has abdicated any responsibility for oversight of information networks beyond CALEA and E911?

AT&T has a conditional net neutrality commitment from the IXP closest to the end user onward to the enduser. So it has no net neutrality responsibility upstream and may have offer superior QOS guarantees such that Content Provider A's bits always get to the IXP on "better than best efforts terms." That may not trouble me, but going to the point about the scope of AT&T's commitment, I'm not sure they have offered much, particularly since AT&T probably will self provision to the closest IXP and may do so onward.
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