WASHINGTON-When the government broke up Ma Bell more than 20 years ago, it did so because it did not want one company controlling computer-to-computer communication-at the time the stuff of science fiction. As Ma Bell is nearly reborn in the form of AT&T Inc. buying BellSouth Corp. for $67 billion, the concept of computers talking to each other is commonplace. How well they communicate could become a central concern of policymakers as consumer advocates push for network neutrality.
Network neutrality in broad terms means the ability to run any lawful application or connect any lawful device to the communications network. For content providers, it means not being required to pay pipe owners-even if the pipe is spectrum-to have their content carried or given priority.
“We expect advocates of network-neutrality obligations to try to convince the Federal Communications Commission and the Department of Justice to place strong conditions on the merged entity,” said Stifle, Nicolaus & Co. Inc., in an equity research report, “Network Neutrality: Value Chain Tug of War.” “AT&T and BellSouth will have to be on good behavior, as any effort to use their network ownership in a way that is seen as blocking or degrading the services of competitors could lead to greater momentum for merger conditions.”
The proposed acquisition also pushed network neutrality front and center as House Commerce Committee negotiators try to hammer out a telecom reform bill, which could be introduced as early as this week.
While opponents of network neutrality believe advocates are warning of a non-existent problem, Gigi Sohn, president & co-founder of Public Knowledge, an advocacy group engaged in the debate, said last week, “the companies are saying they are going to (block) do it. If that is not a threat, what do you need?”
Indeed, both Edward Whitacre, AT&T chief executive officer, and Duane Ackerman, BellSouth CEO, have said in the past that charging companies like Google Inc. and Vonage Holdings Corp. is the wave of the future.
Wireless carriers already have such arrangements with their walled gardens, but those gardens were created in the day when wireless Internet was slow and cumbersome. As third-generation networks and phones capable of accessing the World Wide Web become the norm, wireless too must decide its views on network neutrality. “The debate on net neutrality is really a debate over market power,” said James Gattuso of the Heritage Foundation.
