January 5, 2007
Neutrality saved in AT&T merger
The Federal Communications Commission approved on Dec. 29, 2006, the $85 billion merger of AT&T and BellSouth. In a victory for advocates of Internet freedom, the terms of the deal include strict protections for Network Neutrality and concessions that will lower the cost of Internet access.
“This merger agreement is a milestone that may one day be remembered as an important moment in Internet history,” said Tim Wu a professor at Columbia University Law School and charter member of the SavetheInternet.com Coalition. “Most notable is the agreement’s striking inclusion of the first strong Network Neutrality language yet seen in any broadband regulations.”
“AT&T capitulated to supporters of an open and neutral Internet,” added 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. The conditions placed on this merger will show irrefutably that Net Neutrality and phone company profits are not mutually exclusive.”
Late on Dec. 28, AT&T filed a “letter of commitment” with the FCC in which it agreed to strict Net Neutrality requirements for at least 24 months. According to the letter, AT&T “commits that it will maintain a neutral network and neutral routing in its wireline broadband Internet access service” and pledges “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.”
“This means AT&T can’t sell Yahoo or CNN priority access
to its customers over its broadband networks,” Wu explained, “or
favor those content sources over unaffiliated blogs or search engines.”
AT&T’s concessions followed heated negotiations with FCC Commissioners Michael Copps and Jonathan Adelstein. Their firm stance in placing conditions on the deal was backed by tens of thousands of letters from citizens who demanded that the FCC block any merger without Net Neutrality.
“AT&T showed no interest in allowing Net Neutrality to be included in this deal,” said Mark Cooper, director of research for the Consumer Federation of America. “But their feet were held to the fire and, in the end, they had no choice but to accept terms that will protect the Internet and keep a bad merger from being much, much worse.”
The deal also requires AT&T to guarantee low-cost DSL access for 30 months.
“This merger endangers long-term competition,” said Gene Kimmelman, vice president of Consumers Union. “But by making AT&T’s high-speed Internet service available to consumers for less than $20 a month, the FCC opens the door for consumers to connect low-cost Internet telephone service to broadband and thereby pressure the market to keep delivering lower prices for all telecom services. And those consumers who cannot afford DSL today, or who cannot afford to pay AT&T’s high package fees for combined Internet and phone service, can now get fast connections to the Internet at a reasonable price.”
“Today’s decision makes the best of a bad situation by minimizing potential harm to the public interest,” added Andrew Jay Schwartzman of the Media Access Project. “There will be more competition and more innovation than would have been the case without the conditions imposed by the FCC. In addition, this agreement requires AT&T to divest a large swath of wireless spectrum. While the future of this WiMax technology remains unclear, it has the potential to offer wireless broadband competition over the next few years.”
The Net Neutrality provisions will last for at least 24 months — or until Congress passes meaningful, enforceable Net Neutrality under the law. Internet freedom advocates at the SavetheInternet.com Coalition pledged to push the new Congress for legislation when it convenes next week.
“Today’s merger agreement sets the bar for the entire industry,” Scott said. “We are no longer having a debate about whether Net Neutrality should be the law of the land. We are having a debate about how and when.”
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