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Whitacre, Martin, Don’t See a Need for ‘Net Neutrality’ Legislation
TMCnet Associate Editor
AT&T (News - Alert) CEO Edward Whitacre, whose comments in a recent Business Week Online article helped bring national attention to the ongoing “network neutrality” debate, said on Tuesday that AT&T won’t block or degrade voice and video signals traversing its network.
Whitacre poured some fuel on the “net neutrality” fire in November when he gave a blunt response to a question regarding the rights of websites like Google (News - Alert) and Yahoo, and service providers such as Vonage, to use carriers’ networks for the delivery of voice and video signals to consumers.
“Why should they be allowed to use my pipes?” Whitacre said in the Business Week article. “The Internet can’t be free in that sense, because we and the cable companies have made an investment - and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes (for) free is nuts!”
But during an industry trade show Tuesday, Whitacre changed his stance, saying “AT&T will not block or degrade traffic, period.”
“And we won’t change (our position) no matter what sky-is-falling rhetoric you hear,” he said. “Markets work best when consumers have choices.”
Whitacre added that “any provider that blocks access to content is inviting customers to find another provider … and that’s just bad business.”
Net neutrality is the concept that everyone, everywhere, should have free and unfettered access to all that the Internet has to offer. However, recent incidents including the blocking of websites in China and proposals to tax email and IP voice services here in the U.S. have resulted in a greater focus on the issue. Further fueling the debate is a recent proposal from AT&T and Verizon that Congress adopt legislation enabling the major U.S. carriers to create separate “tiers” of high speed service on the Internet - and then be able to charge service and content providers “access fees” to use it.
Opponents say charging for faster service will skew competition in the favor of big carriers and the service and content providers which can afford to pay access fees for the express delivery of their services. Meanwhile, smaller companies which can’t afford the access fees (but which might offer similar services) will, in effect, be forced to use the Internet “slow lane,” thus taking away any competitive advantage they might have had if the Internet remained “neutral.” Opponents also argue that giving the big carriers the ability to prioritize the flow of data across the web could open the door to “discriminatory practices,” whereby network operators could give priority to their own signals (or those of their partners) over those of competitors.
The carriers, on the other hand, claim they are seeking to remedy a situation which could end up degrading the Internet’s performance in the not-too-distant future. They claim that as the Internet’s “pipes” become increasingly congested with voice and video signals (which is starting to happen now, as service providers rapidly roll out new services) there needs to be a way to free up more bandwidth so that these voice and video signals don’t have to “compete” against other data (such as email and website content). The carriers assert that building a second tier of faster broadband service and charging for it does not mean that Internet users will be blocked from content. Rather, they say it is simply a faster way of delivering content. The result, the carriers say, will be better delivery next generation services, such as IPTV (News - Alert) and VoIP. In addition, they point out that the development of faster broadband networks will help stimulate innovation, whereas the “net neutrality” legislation now before Congress will have the opposite affect – in fact, it could end up killing investor confidence in telecom.
During his keynote at the popular trade show, Whitacre said the proliferation of voice and video data packets on the Internet – coupled with the increasing demand for more bandwidth - has forced his company to continually upgrade its network. He said AT&T spent $11.5 billion for upgrades to its wireline network last year - and also made major upgrades to the Cingular (News - Alert) Wireless network (AT&T has a 60 percent stake in Cingular). AT&T and other carriers, he said, will need to change their business models in order to recoup on those investments. Furthermore, AT&T’s shareholders, he said, expect the company to figure out a way to get a return on the billions of dollars it has spent on network upgrades. Charging access fees is one way to accomplish this, he said.
Whitacre, however, wasn’t the only influential figure to speak on the issue of net neutrality during the event. Federal Communications Commission Chairman Kevin Martin also addressed the issue during his keynote - saying he believes the FCC (News - Alert)’s existing policies are sufficient to address any “discriminatory practices” that might arise among network operators.
“I think the FCC has authority to act,” Martin said. “And it has done so in the past.”
Martin said he supports the right of network operators to differentiate their networks and to prioritize traffic.
“We need to make sure we have a regulatory environment (in which network operators) can invest in the network and can recoup their costs,” he said.
Earlier this month, Sen. Ron Wyden introduced the Internet Nondiscrimination Act of 2006 - legislation which is intended to ensure “net neutrality.”
Under the proposed bill, network operators would be prohibited from charging companies for faster delivery of their content to consumers over the Internet - or favoring certain content over others.
“Creating a two-tiered system could have a chilling effect on small mom and pop businesses that can’t afford the priority lane, leaving these smaller businesses no hope of competing against the Wal-Marts of the world,” Wyden said in a prepared statement the day the bill was introduced. “Neutrality in technology enables small businesses to thrive on the Internet, and allows folks to start small and dream big, and that’s what I want to protect with this legislation.”
According to published reports, it now appears that portions of Wyden’s bill will be incorporated into a broader bill covering all of telecom as Congress takes up the issue of redrafting the Telecommunications Act of 1996 (which is now largely obsolete, due to the dramatic changes in telecommunications technology during the past 10 years).
Another bill, the Digital Age Communications Act, which is more all-encompassing and addresses other controversial issues, such as the Universal Service Fund tax, has the support of numerous legislators and also could end up becoming incorporated into whatever new bill the Senate Commerce Committee comes up with to replace the Telecommunications Act of 1996.
The Senate Commerce Committee is expected to start drafting legislation shortly after Easter.
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Patrick Barnard is Associate Editor for TMCnet and a columnist covering the telecom industry. To see more of his articles, please visit Patrick Barnard’s columnist page
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