Net Neutralat&t

The next big one is confirmed - AT&T has bagged Bellsouth in the end.

The telco's negotiators apparently persuaded the FCC commissioners they should give it the benefit of the doubt, by offering some commitments to help preserve so-called "Net neutrality". But the terms of the deal have caused some consternation, not just because it was smuggled through at a suspiciously late hour. The estimable Dave Burstein points out there are some footnotes to AT&T's commitments which could leave them qualified, as the auditors might say.

According to Burstein, at&t... sorry, AT&T, has 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 destination.”

But later on in its submission to the FCC, the company says “This commitment also does not apply to AT&T/BellSouth's Internet Protocol television (IPTV) service.” Since the whole point of the net neutrality argument is to be inclusive to the letter, this sort of knocks a big hole in the 'commitment'. AT&T is betting the farm on IPTV and bundled products (as is Verizon.)

Follow the investment money; in effect AT&T will be its IPTV portfolio, when you count in high speed Internet -and that's where the new subs are signing up. Over at rival Verizon, the new FiOS IPTV portfolio is registering 15% Internet access penetration after 12 months, with 99% of FiOS subs taking a second service and 79% on triple play.

This could either blow the net neutrality dispute so far open it remains in contention for ever, or it could, in Burstein's words, be the first sign of political pressure that will "get AT&T to behave after all". For the moment, the US press is keeping its powder dry.

To be fair to AT&T, the initial commitment not to provide any service that 'prioritize' packets seems a strange one that would only handicap everyone. Its new services will be based on class of service, and so presumably will be its competitors'. And actually, big carriers exist partly to differentiate on CoS, on behalf of their operator customers. That has to extend to Internet service providers . AT&T would have to give other ISPs equal access to all its network and OSS to guarantee no other service provider was disdvantaged in the bitstream, but is unlikely to be committing to full wholesale access to all its own retail services after all these years.


Consolidated AT&T Inc rolls up four already huge operators previously called AT&T Corp, BellSouth Corp., Cingular Wireless and SBC Communications. Pro forma the new group had revenues equal to 73 billion euros in financial 2005, which puts it up to 2nd place in our Global 100, just behind NTT Corp on 75 billion euros but ahead of Verizon on 63.6 billion euros. (There's a degree - maybe a lot - of double counting of the Cingular revenues which were split between AWE and BLS previously; AT&T's recent quarterly statements are unclear about where these revenues are nowadays.)

We''ll have to wait for clarification in the latest full year revenue figures out 25th January.