In defense of the AT&T Merger Agreement
The proposed AT&T merger agreement has attracted some criticism, most prominently from David Burstein and Susan Crawford (check out also the commentary from David Isenberg and Jeff Pulver.) They believe, in short, that the exceptions in the agreement make it not worth the candle.
I respectfully disagree with Susan and Dave and want to explain why. While I don’t think the agreement is perfect, I don’t think it is flawed in the ways they believe. Let’s consider each in turn.
Susan argues that leaving “Wireline broadband Internet access service” undefined is dangerous; that AT&T will simply prioritize something different — what it it calls the “AT&T Yahoo! High Speed Internet U-verse Enabled,” which runs over fibre. As she writes:
AT&T is effectively saying, “We’ll keep existing ‘broadband’ access neutral. But when it comes to our new super-duper ‘AT&T Yahoo! High Speed Internet U-verse Enabled,’ well, that’s not up for negotiation. We need to make money there. ‘Enabled’ and ‘broadband’ are not the same thing.
Most importantly, prioritizing fiber-based broadband internet access would in fact violate the terms of the agreement. It is true that “wireline broadband internet access” service is undefined. Perhaps in an ideal version of the agreement, it would have been defined as follows: “any service that gives access to content or applications that rely on the internet addresses issued by the IANA” or something of the sort.
However, the term is the next best thing: a term with a specific, defined meaning in telecommunications regulation. It is a history that suggests that it means any internet broadband service carried over a copper wire, fiber, or anything else is covered by the agreement. Here is exactly how the FCC has defined the term (on page 8 of the 2005 Wireline classification decision):
Wireline broadband Internet access service, for purposes of this proceeding, is a service that uses existing or future wireline facilities of the telephone network to provide subscribers with Internet access capabilities.[footnote]
The footnote says:
We stress that our actions in this Order are limited to wireline broadband Internet access service and its underlying broadband transmission component, whether that component is provided over all copper loops, hybrid copper-fiber loops, a fiber-to-the-curb or fiber-to-the-premises (FTTP) network, or any other type of wireline facilities, and whether that component is provided using circuit-switched, packet based, or any other technology.
This suggests that getting that defined term in the agreement is not a concession, but perhaps even a coup. The network neutrality rule shall apply to all existing and future wireless facilities.
* * *
David Burstein is concerned about the exemption for IPTV in the agreement, and his concerns are related somewhat to Susan’s concerns. He argues that AT&T will use the IPTV exemption in the Merger Agreement to create an internet “fast lane,” and thereby sidestep the network neutrality rule. David writes:
AT&T has always intended to give paying customers priority by routing them over the “IPTV†part of their network, with Alcatel routers and Microsoft software designed for QOS.
Here is the response. AT&T, as many know, in implementing plans to become a cable television provider. Building a cable television network is an exercise in discrimination; you cannot become, say, channel 60, without getting permission. It is a fundamentally different kind of network than the internet. In practice their networks do not rely on the public internet or its IP addresses — it is a private facility, like a cable network.
The IPTV exemption is intended to allow AT&T to pursue its cable television plans; and necessarily, that will mean AT&T choosing channels (Bravo, Comedy Central, etc.), and not choosing others. So yes, to this extent, the agreement allows AT&T to engage in a form of discrimination.
But as soon as AT&T attempts to justify doing anything other than television using the IPTV exemption, it will begin to violate the agreement. The IPTV exemption, in full, reads as follows:
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.
As you can see, the exemption is itself limited. Here again the definintion of “wireline broadband Internet access service” is important. The language above suggests that the IPTV exemption cannot be used in any way that constitutes offering a discriminatory broadband internet service.
In effect, the structure of the IPTV exemption draws a line, reflecting existing reality, between the open networks of the world (the internet) and the closed, highly discriminatory networks (cable). You can offer one, or both, but the discrimination isn’t allowed to bleed away from one and into the other. Here’s the essence: so long as customers demand internet service, access to the IP address defined internet, it will be neutral under this agreement.
Finally, it is arguably good for everyone that the Bells want to offer TV service. Cable could use the competition.