AT&T/BellSouth may pass today with hollow Net Neutrality
The fATT/BellSouth merger is papered over with empty Network Neutrality promises. But the real problem is the underlying assumption that the transport is to be funded by services. We need to fix the basic funding model rather than pretend we can keep a broken model as long as we naïve enough to believe in vague promises to be neutral. (until bugs is fixed see this for a more readable version.
30-Dec-2006Version 2: 2023-03-18 10:09:41

This is from Dave Farber's interesting people list but the formatting got mangled there

[IP] more on AT&T/BellSouth may pass today with hollow Net Neutrality

David Farber
Fri, 29 Dec 2006 10:31:05 -0800

Begin forwarded message:

From: Bob Frankston <[EMAIL PROTECTED]>
Date: December 29, 2006 1:17:59 PM EST

Subject: RE: [IP] more on AT&T/BellSouth may pass today with hollow Net Neutrality

There is a danger of falling into the trap of focusing on each symptom – the fATT/BS thing is a consequence of system that doesn’t make any sense and if the premise doesn’t make any sense that it is difficult to argue about results.

I still don’t understand how the whole telecommunication industry makes any sense. I keep feeling like the kid looking at the emperor passing by and wondering who’s paying for all the pageantry. The clothes themselves are pretty shabby but we’re told that it’s our fault because we cheated the emperor out of his rightful due.

The basic funding model was established when had service providers who built transports for their purposes and funded it as just another cost of providing their services. If you used a phone wire by definition you were making a phone call so there was a real relationship and the more phone calls you made the more phone lines.

Now there no longer have any relationship between a particular service and the transport. We also have abundant capacity. As with milk, you can’t maintain a price that is above cost unless you limit the supply thus preventing us from realizing the capacity.

Without an intrinsic relationship between service and transport the carriers have to peek at the bits to take determine the value so they can get a cut of the action. They can be nice and tolerate some raw bits, that Internet, but not if it threatens their service revenues. Certainly not if it requires additional capacity – there is simply no funding model for that if abundant bits can’t be priced above cost.

If they do get a cut of the action we may get some transport but we don’t get the Edge-to-Edge Internet (End-to-End is often taken to mean Womb-to-Tomb).

But then I get told that if we fund the transport as local infrastructure no one will want to pay for it. They are used to get it free and you can’t rely on it anyway. Sponsorship is not the same as free – it comes at a price. I don’t understand how a common transport could possibly be more expensive than today’s shared transports that has enough capacity to run HD VoD streams to each TV while still having multiple broadcast transports. I don’t see how people would not want to assure that they can get their entertainment.

If the FCC is so befuddled by their Regulatorium it will take an external factor. Can the FTC free itself from the idea broadbandit competition and give us ownership of our transport? Especially when the carriers are explicit in saying that 3G/IMS works only if they prevent the users from creating their own services – IANAL but that sounds like making restraint of trade a necessary part of their strategy – as if violation of NN isn’t in itself.

I’m writing a longer essay explaining this but it’s not quite ready since I want to make sure it is able to explain these points to a larger audience that believes there are voice bits and video bits and even porn bits that can be identified.

-----Original Message-----
From: David Farber [EMAIL PROTECTED]
Sent: Friday, December 29, 2006 12:05

Subject: [IP] more on AT&T/BellSouth may pass today with hollow Net Neutrality

Begin forwarded message:


Date: December 29, 2006 11:49:31 AM EST



Subject: Re: [IP] AT&T/BellSouth may pass today with hollow Net Neutrality

I made a ‘quick’ call to the FCC to asked a couple of questions based on

this post. After being transferred around, I spoke to Nicholas Alexander

(contact info on request). I was told Nick was the only one to answer any questions.

Nick advised two things: 1. he had no time to talk to me, nor did he know when he could talk to me. He did take my contact info to call back at an undetermined future time. 2. he claimed to not know when this vote is taking place.

I feel like I just knocked my head against a brick wall.


Begin forwarded message:

From: Dave Burstein <[EMAIL PROTECTED]>

Date: December 29, 2006 8:17:23 AM EST


Subject: For IP please: AT&T/BellSouth may pass today with hollow Net



I respect your opinion the government should not regulate Net

Neutrality, and I think your readers can make their own decision. But

I think neither you nor I want it to go through because AT&T claims

they promised Net Neutrality but sneaked in a sentence that makes it

meaningless so I hope you’ll pick this up. The first is from Mike

Masnick at Techdirt, the second a draft from DSL Prime I would

release except they are hurrying to a vote less than 24 hours after

the final and deceptive AT&T proposal came out.

From Mike

And By The Time Anyone Reads The Sneaky Fine Print On AT&T’s

Concessions, The Merger Will Be Done

from the fooled-ya deptA 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.

Dave Burstein, who knows more about DSL than probably just about

anyone, lets us know that the fine print in the deal actually may

negate the network neutrality premise. The wording is a little

tricky, but while they agree not to remove network neutrality from

their standard network, hidden in the middle of a later paragraph is

this sentence: “This commitment also does not apply to AT&T/

BellSouth’s Internet Protocol television (IPTV) service.” At first

that might seem innocuous, but Burstein has pointed out that AT&T’s

always planned on using the IPTV network as that high-speed toll lane

it wants Google, Vonage and others to pay extra for. Burstein notes

that AT&T isn’t even set up to put quality of service on their

existing network—so the agreement not to violate network

neutrality on that network is effectively meaningless. It is, he

claims, a sleight of hand that successfully fooled a bunch of people

into supporting the deal, and will probably help it get approval.

AT&T promises not to violate network neutrality on a network they

never intended to use that way, and carves out permission to use it

on their new network, where they had planned all along to set up

additional tollbooths.

and from me (draft)

“I call them the black ninjas. They work by night and are very, very

good.” FCC Chairman Bill Kennard explaining telco lobbyists

“Jim Cicconi and Bob Quinn are the best lobbyists in Washington,”

President of SBC Bill Daley lamented after they beat him a while

back. They now work for AT&T, and have proven their brilliance by

convincing most of D.C. they accepted network Neutrality to get the

BellSouth merger approved, while burying on page 10 a sentence that

made their concession almost meaningless. Their proposal came out

Thursday night and I’ve worked all night. Apologies to non-U.S.

readers for putting this first, but AP reports they plan to sneak it

through Friday before the holiday.

AT&T offer on Net Neutrality sounds good, and might be a model

to countries like Japan that are considering Net Neutrality rules.

AT&T agreed “not to provide … 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


A seemingly innocuous later sentence effectively makes that

almost meaningless. “This commitment also does not apply to AT&T/

BellSouth’s Internet Protocol television (IPTV) service.” 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. They don’t even have the

equipment for that kind of QOS on what they call “wireline broadband

Internet access service.” The lawyers fighting this in D.C. won’t

even discover they’ve been bamboozled until afterwards if the

commission goes ahead and rushes this through. The entire set of

“concessions” remains so insignificant that Merrill Lynch’s

“immaterial” judgment still holds.

The other stuff in the 20 pages adds surprisingly little

substance. For example, the 85% DSL promise happens to be the level

BellSouth has already reached. Most of the special access rates they

agreed to freeze are ones AT&T CEO, Rick Lindner, told Wall Street

“have been declining as a result of competition.”

Incredibly effective persuasion, which at least in early drafts

even bamboozled public interest advocates and Commission Democrats.

With luck, they’ll analyze the final filing, released late Thursday,

before making up their mind. It would be scandalous if an $85B merger

goes through on terms revealed only 12 hours before.

Dave Burstein