worth reading more on AT&T/BellSouth may pass today with hollow Net Neutrality

[David Farber <dave () farber net>]

Begin forwarded message:

From: "Yoo, Christopher" <christopher.yoo () Law Vanderbilt Edu>
Date: December 29, 2006 1:00:22 PM EST
To: dave () farber net
Subject: RE: [IP] more on AT&T/BellSouth may pass today with hollow  
Net Neutrality

For IP, if you think it appropriate.

The concerns about possible loopholes in the AT&T-BellSouth merger
conditions underscore the problems with using the merger clearance
process as a form of shadow regulation.

The problem is that merger conditions do not go through the usual
administrative process of notice and comment.  Although the FCC invites
interested parties to comment on the merger in general, it rarely
discloses the proposed conditions until after they have been approved.

The process is even more problematic when one recognizes that these
conditions (along with similar conditions imposed in the SBC-AT&T and
Verizon-MCI acquisitions) were imposed while the FCC was has a formal
proceeding open to assess network neutrality.

In addition, these merger conditions turn the FCC Policy Statement
issued on September 23, 2005, (which also included language
acknowledging network operators right to protect the network and to
engage in "reasonable network management" that might also be regarded as
loopholes) into a binding obligation even though the Policy Statement
was never subject to notice and comment.  The D.C. Circuit's 1992 and
1993 Bechtel decisions has struck down previous attempts to turn policy
statements into law without subjecting them to full notice and comment
as arbitrary and capricious.

The result is a process that is shielded from public comment and that
results in obligations that are inconsistent across the industry and
that only affect those firms who happen to have a merger pending before
the FCC.  The nongermaneness of many conditions further underscores the
manner in which the FCC can use its role in clearing mergers as a form
of back-door regulation.  There have been many calls to lock this back
door, but to date they have largely fallen on deaf ears.

-----Original Message-----
From: David Farber [mailto:dave () farber net]
Sent: Friday, December 29, 2006 11:05 AM
To: ip () v2 listbox com
Subject: [IP] more on AT&T/BellSouth may pass today with hollow Net
Neutrality



Begin forwarded message:

From: Lynn <lynn () ecgincc com>
Date: December 29, 2006 11:49:31 AM EST
To: dave () farber net
Cc: daveb () dslprime com
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.

Lynn

> Begin forwarded message:
>
> From: Dave Burstein <daveb () dslprime com>
> Date: December 29, 2006 8:17:23 AM EST
> To: dave () farber net
> Subject: For IP please: AT&T/BellSouth may pass today with hollow Net
> Neutrality
>
> Dave
>
>      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
> destination."
>
>       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
>
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