And By The Time Anyone Reads The Sneaky Fine Print On AT&T's Concessions, The Merger Will Be Done

from the fooled-ya dept

A 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.

Also, in response to the original post, the details show that the naked DSL they're promising is limited to only 768k down, which is pretty slow these days. It's also worth noting that they don't say a damn thing about upstream speeds (as is the fashion these days), which means it's probably down around 128k. Again, Burstein points out that at such an upstream speed, VoIP tends not to work very well -- so for those who want naked DSL because they plan to just use VoIP instead of a phone line, AT&T may have just made that more difficult (I will say, personally, though, that I've been able to use VoIP at 128k, but it does break up if anyone else is doing anything on the network). However, after looking through the fine print, it certainly looks like the "concessions" AT&T agreed to aren't very big concessions at all.

Update: And, as expected, the FCC has now approved the merger. A lot of folks have been contacting us about this today, arguing on both sides of the equation, claiming that AT&T's concessions are a big deal, or that they've left plenty of loopholes. One thing that's for certain is that we haven't heard the last of this, and there's going to be plenty of arguing going forward about whether or not AT&T actually lives up to the spirit of what they're proposing.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    ScytheNoire, Dec 29th, 2006 @ 3:45am

    and does any of this surprise any one?

    fact of life: corporations are out for themselves and want to screw over as many people as possible to get as much money as possible for as long as possible.

    welcome to America

     

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  2.  
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    The infamous Joe, Dec 29th, 2006 @ 4:05am

    Ante Up, Pardner

    I see your cynical comment and raise you:

    Humans are out for themselves and want to screw over as many people as possible to get as much as possible for as long as possible.

    Welcome to Earth.

     

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  3.  
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    Doesn't Matter, Dec 29th, 2006 @ 4:40am

    Yeah, this is terrible. AT&T provides a pretty good service, fairly cheap prices, and now want's to give us even more options and technology. We've got to stop this!!!

     

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  4.  
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    does matter, Dec 29th, 2006 @ 5:25am

    idiot above me

    AT&T is the same company that was forced to break up and split off aspects of itself because it was a MONOPOLY and it was ARTIFICALLY RAISING PRICES, now it's trying to get larger and gobble up a larger market share so it can do the same damn thing and you're happy about it?

     

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  5.  
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    Do you care, Dec 29th, 2006 @ 5:27am

    this is going to far

    I wonder if bell south will have to give up there hords of 800/1900 MHZ spectrum so mr big bad cingy can use. Someday everyone will deal with the latency of VSAT and screw AT&T and all those nasty NN (net nuet. companies) cause I would rather have 600-800ms ping times then have everything throttled by the company im giving money to to access somethign that wasnt supposed to have restrictions in the first place.

     

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  6.  
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    Get a Grip, Dec 29th, 2006 @ 5:47am

    DSL speeds for the same price some still charge for dial-up? 14X download speeds, 2X upload speeds, 0X the money.... What's the downside here?

    If you want to run stable VoIP get a faster DSL connection, or wait for market competition (like $19.95 DSL) to force the price of cable internet down.

     

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  7.  
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    Get a Grip, Dec 29th, 2006 @ 5:47am

    DSL speeds for the same price some still charge for dial-up? 14X download speeds, 2X upload speeds, 0X the money.... What's the downside here?

    If you want to run stable VoIP get a faster DSL connection, or wait for market competition (like $19.95 DSL) to force the price of cable internet down.

     

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  8.  
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    Tim Karr, Dec 29th, 2006 @ 6:05am

    You missed the other fine print

    Mike. You're trying to play “gotcha” on a loophole that isn’t there.

    Your presumption is that ATT can simply rename their broadband service “cable TV” and that somehow no one will notice and that will pass muster at the FCC and in the courts.

    That simply flies in the face of the common sense test. It flies in the face of all Congressional and Commission precedent on defining broadband services, and it flies in the face of case law on the matter. No one was bamboozled by AT&T. Plus, you missed the next sentence:

    “These exclusions shall not result in the privileging, degradation, or prioritization of packets transmitted or received by AT&T/BellSouth's non-enterprise customers' wireline broadband Internet access service from the network side of the customer premise equipment up to and including the Internet Exchange Point closest to the customer's premise, as defined above.”

    This states that no matter what they do with IPTV, they cannot discriminate against packets flowing up or downstream in their broadband service.

     

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  9.  
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    Tim Karr, Dec 29th, 2006 @ 6:07am

    You missed the other fine print

    Mike. You're trying to play “gotcha” on a loophole that isn’t there.

    Your presumption is that ATT can simply rename their broadband service “cable TV” and that somehow no one will notice and that will pass muster at the FCC and in the courts.

    That simply flies in the face of the common sense test. It flies in the face of all Congressional and Commission precedent on defining broadband services, and it flies in the face of case law on the matter. No one was bamboozled by AT&T. Plus, you missed the next sentence:

    “These exclusions shall not result in the privileging, degradation, or prioritization of packets transmitted or received by AT&T/BellSouth's non-enterprise customers' wireline broadband Internet access service from the network side of the customer premise equipment up to and including the Internet Exchange Point closest to the customer's premise, as defined above.”

    This states that no matter what they do with IPTV, they cannot discriminate against packets flowing up or downstream in their broadband service.

     

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  10.  
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    chris (profile), Dec 29th, 2006 @ 6:23am

    Re: Ante Up, Pardner

    i'll see your laugable generalization and and raise you:

    the damage done by one human actively screwing everything that moves pales in comparison to the damage done by a single act of corporate stupidity.

     

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  11.  
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    GOD, Dec 29th, 2006 @ 6:28am

    We pay again..????

    Considering that it was public funding, a HUGE amount of taxpayer money, that created this thing in the first place, and public money still that forwards the research. I think its absurd that ATT or many of these telecoms charge us or even consider tollbooths on the internet. Its like bringing a person to your water well and they inturn what to charge you now to use it.

     

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  12.  
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    Herbie The Rabbit, Dec 29th, 2006 @ 6:48am

    Where is the competition?

    My take on this is that perhaps AT&T wants to charge more for IPTV because it actuallly will cost them more in resources to have an effective offering...

    The noteworthy here is the new lower cost DSL. Clearly, the market is not working - if it was, AT&T would be finding exciting new products (like cheap 128k DSL) to win market share, not as a 'concession' to get a merger approved.

    To me this does not bode well... what other competitive ideas are being withheld because there is not a real market demanding better solutions? Where is the competition going to come from - expecially with yet another huge company merger?

     

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  13.  
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    citizenj, Dec 29th, 2006 @ 7:00am

    Doesn't Matter you say?

    pretty good service, cheap prices? what rock have you been under man? Broadband development in this country is lagging FAR behind other developed countries due to foot-dragging by the big telcos. Another big telco is NOT the frickin' answer. Let the market decide? Not in an oligopoly. Remember when the Bells got broken up back in the day? Well, they're just being put right back together, and it's going to cause problems. why don't you google save the internet before you start talking smack?

     

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  14.  
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    CLEC Insider, Dec 29th, 2006 @ 7:10am

    Net Neutrality: ATT's Smoke and Mirrors

    ATT’s concessions are tempting, but I feel that the FCC acceptance of the terms offered will, ultimately, do anything positive for proponents of the principal ‘Net Neutrality.’

    1) The 2nd statement of the 'Net Neutrality' section states that ATT will 'fulfill' their net neutrality commitment by not selling privileged services to others. This does not prevent ATT from subjecting their own customer's packets to discrimination

    2) The statement only mentions that the 'privilege' they will not sell only involves the source, destination, and 'owner' of the packet in question. [very importantly:] it DOES NOT state that the prohibited privilege extends to the TYPE of packet (i.e. independent of what TCP/UDP port is being used, if their IP fabric detects an H.323 or other type of VoIP packet) being used.

    3) Their commitment only extends from the CPE (i.e. IAD, [x]DSL Modem, CSU) to the nearest 'Internet Exchange Point' (IEP) which is '... the point of interconnection that is logically, temporally or physically closest to the customer's premise where public or private Internet backbone networks freely exchange Internet packets.' This is a flowery, but useless statement, as the customer's data may have to pass through more than one IEP before reaching the light of day, and only the first of these 'points' may not be used for packet discrimination as they have defined it.

    I agree with the previous comments that ATT is not giving anything up that they have not already prepared to do so. In fact, their concept of 'Net Neutrality' is false, especially if you agree that the entire network should remain neutral to any packet type, movement, and 'owner'.

    If the FCC commissioners agree to these 'concessions' (and I sincerely hope they do not), they will have done nothing for the NN fight accept:
    - to commit everyone an expanded realm of buzzwords by casting the NN sword in a rather unwieldy stone,
    - provide a tremendous victory to ATT's PR department ('[Ed Whitacre to Bill O'Reilly]: Of COURSE we are committed to Net Neutrality),
    - embolden ATT to stomp all over the new ATT consumer's rights to fredom from monopolistic manipulation in the name of 'competition', if for no other cause than proving that they can still put one over on the Consumer's advocate.

     

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  15.  
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    CLEC Insider, Dec 29th, 2006 @ 7:40am

    Revised: 'Net Neutrality: ATT's Smoke and Mirrors

    For those of you who like reading more-well-edited rants (*blush*):

    ATT's concessions are tempting, but I feel that the FCC acceptance of the terms offered will, ultimately, do nothing positive for the principals of 'Net Neutrality.'

    1) In the 2nd statement of the 'Net Neutrality' section, ATT feels that to 'fulfill' their net neutrality commitment they simply must abstain from not selling privileged services to others. This does not prevent ATT from subjecting their own customer's packets to discrimination, for whatever reason.

    2) This statement goes on to say that the 'privilege' they don't intend to sell only involves the source, destination, and 'owner' of the packet in question. It DOES NOT state that the prohibited privilege extends to the TYPE of packet being used. For instance, independent of what TCP/UDP port is being used, if their IP fabric detects an H.323 or other type of VoIP packet, it may not allow the packet to travel the same path or cary the same QOS as other 'average' packets.

    3) ATT commitment to their version of Net Neutrality only extends from the CPE (i.e. IAD, [x]DSL Modem, CSU) to the nearest 'Internet Exchange Point' (IEP) which is '... the point of interconnection that is logically, temporally or physically closest to the customer's premise where public or private Internet backbone networks freely exchange Internet packets.' This is a flowery, but ultimately, useless statement. In one possible case the customer's data may have to pass through more than one IEP before reaching the light of day, all of which may be owned and operated by ATT, while only the first of these 'points' may not be used for packet discrimination as they have defined it. To truly embody the principals of Net Neutrality, the IEP should be defined as the point where the packet in question meets any other private or public carrier not affiliated or committed to packet discrimination with ATT in any way.

    I agree with the previous comments that ATT is not giving anything up that they have not already been prepared to do so. In fact, their concept of 'Net Neutrality' is false if you agree that the entire network should remain neutral to any packet type, movement, and 'owner'.

    If Copps and Addlestein -- the Democratic FCC commissioners holding up the Commission's approval of the merger -- agree to these 'concessions' (and I sincerely hope they do not), they will most likely do nothing for the NN fight accept:
    - to commit everyone an expanded realm of buzzwords by casting the 'Net Neutrality' sword in a rather unwieldy stone,
    - provide a tremendous victory to ATT's PR department: [Ed Whitacre to Bill O'Reilly]: 'Of COURSE we are committed to Net Neutrality!',
    - embolden ATT, VZ, and others to stomp all over their customer's rights to freedom from monopolistic manipulation, if for no other reason than proving they can still put one over on what's left of the Consumer's Advocate.

     

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  16.  
    identicon
    Tim, Dec 29th, 2006 @ 8:57am

    Net Neutrality?

    Why the focus on net neutrality? It seems to me the real problem with this merger is a significant lose of competition in the merketplace with net neutrality being just another byproduct of said lack of viable consumer options. I don't think this deal should be approved no matter what concessions AT&T (SBC) is willing to make. It flies in the face of significant antitrust rulings in the past. Are we essentially saying it was wrong to break up Ma Bell? That sure seems to be the inference.

    Corporations are not responsible to the good of the country or society, nor should they be. Government is, and should be. Unfortunately ther Government today is run by individuals somewhat confused about responsibilites and ethics.

     

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  17.  
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    Chris Bradley, Dec 29th, 2006 @ 9:17am

    Competition

    It's funny how so many people think that cable provides competition for DSL and vice versa.

    That's the equivalent of saying that cars compete with airlines, so its acceptable to have only one company own the highways and only one company own airlines.

    Technologies dont compete. Companies compete. If anything, they should deny the merger and require that there be at least one other telco in each service area that maintains a minimum of 30% of the market before they are allowed to merge in that region.

    Of course, to be fair, the cable companies should have to play by the same rules.

    We need to strip ownership of the lines away from the telcos and put them under neutral control and then, and only then, allow telcos and cable companies to do whatever they want.

     

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  18.  
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    WyreTheWolf, Dec 29th, 2006 @ 9:31am

    He who dies with the most toys, still dies.

     

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  19.  
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    TheDoH, Dec 29th, 2006 @ 9:49am

    QoS

    AT&T is more than capable of implementing QoS across the network. It's there, just not turned "on". Trust me, they have it.

     

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  20.  
    identicon
    Anonymous Coward, Dec 29th, 2006 @ 10:06am

    Re:

    So does WalMart.

    Monopolies are never good. They give good service and "Fairly cheap prices" because of competition. They can take a loss in one area and make it up in another to drive away competition.

    Once the competition is gone, they'll raise the prices to where they originally were, or even higher if the market can bear it.

    This is where the baby bells came from in the first place. This is why long distance companies were separated out.

    Anyone here old enough to remember when you had to RENT your telephone from Ma Bell? I do.

     

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  21.  
    identicon
    Sanguine Dream, Dec 29th, 2006 @ 10:52am

    Re: Re:


    Anyone here old enough to remember when you had to RENT your telephone from Ma Bell? I do.

    No but I remember about a month ago there was a post her about a elderly woman that was still being charged phone rent on her local phone bill.

     

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  22.  
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    Edwards, Dec 29th, 2006 @ 10:54am

    Re: idiot above me

    Well someone has finally caught on to what's been in the making since the early 1980's. No media attention to this slip by & our Public Utilities Commissions have played sleepy & knew all about these so called break-ups & now put back togethers'. So amazing how we can be drown away from the fact of the real news we should know & this is the " American " way of business plus look @ all of the jobs disappearing !

     

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  23.  
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    Frink, Dec 29th, 2006 @ 12:51pm

    confused again

    Can someone explain how 768k is broadband service we should all be happy about? I guess it's OK as long as you are not the one who has this as maybe their only option. Folks are happy with their 6000k and up service and they accept the fact that others are allowed to have 768k. Network neutrality doesn't matter at that speed.

     

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  24.  
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    Wondering about QoS, Dec 29th, 2006 @ 1:10pm

    QoS

     

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  25.  
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    Michael, Dec 29th, 2006 @ 8:40pm

    Expect 10,000 layoffs

    AT&T mega-mergers in the last two years have cost an estimated 20,000 jobs. At this rate, we can expect that the AT&T/Bell South merger will result in at least 10,000 more job losses. Just one of many reasons to continue fighting this merger.

    Also - 768k DSL service is already offered at $20 in most cities. Virtually nothing AT&T compromised on is actually a compromise.

    2005
    SBC - AT&T Merger to Result in 13,000 Layoffs, Reduced CAPEX
    http://www.convergedigest.com/Bandwidth/newnetworksarticle.asp?ID=13617

    2004
    After AT&T merger, Cingular Wireless expects to cut 6,800 jobs
    http://www.computerworld.com/managementtopics/outsourcing/isptelecom/story/0,10801,97843,00.ht ml

     

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  26.  
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    michael, Dec 30th, 2006 @ 12:10pm

    Re: Expect 10,000 layoffs

    this just in at Business Week:

    “The combination of San Antonio-based AT&T and Atlanta-based BellSouth will have operations in 22 states. AT&T estimates that about 10,000 jobs will be phased out over three years.”
    http://www.businessweek.com/ap/financialnews/D8MAS9B00.htm

    It’s not clear from this admission where the job losses will come from, both AT&T and Bell South have downscaled heavily over the last decade. Bell South, in particular, maintains a grotesque mandatory unpaid leave policy. In any event, whatever outsourced positions the CWA managed to bring back has to offset against this greater loss (which are likely non-union positions anyway). The point is - a lot of lives get wrecked in these mergers and refusing to acknowledge or to mobilize against that only hurts us in the long run. We need to maintain better reality checks between our abstract policy goals and the issues that affect the lives of real people.

    Back in 1996 when AT&T let 40,000 go while giving the CEO a hefty bonus, one of their vice presidents summed it up this way:

    “People need to look at themselves as self-employed, as vendors who come to this company to sell their skills," explained James Meadows, one of AT&T's vice presidents for human resources, who has helped define the company's new rules of engagement.”

    "In AT&T, we have to promote the whole concept of the work force being contingent, though most of the contingent workers are inside our walls," Mr. Meadows said. "Jobs" are being replaced by "projects" and "fields of work," he said, giving rise to a society that is increasingly "jobless but not workless."


    So, over the next three years, 10,000 AT&T/Bell South workers can expect to have work but no jobs. I find no comfort in that.

     

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  27.  
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    Leo, Dec 30th, 2006 @ 3:08pm

    Re: Re: Expect 10,000 layoffs

    michael: "Jobs" are being replaced by "projects" and "fields of work," he said, giving rise to a society that is increasingly "jobless but not workless."

    Actually he meant to say: "payless but not workless".

     

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  28.  
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    Rob Frieden, Jan 4th, 2007 @ 5:55am

    AT&T's Less is Less Merger Concession on Net Neutr

    Judging from the express reservation of the IPTV AT&T network, I bet we'll see a dispute about whether fiber is included. First would fiber be included as part of wireline Internet access when the FCC has made a copper/glass and legacy/new field distinction? Second why would AT&T expressly take Uverse/IPTV networks off the table if they didn't think they were safeguarding fiber? Third what difference does it make when the FCC has abdicated any responsibility for oversight of information networks beyond CALEA and E911? AT&T has a conditional net neutrality commitment from the IXP closest to the end user onward to the enduser. So it has no net neutrality responsibility upstream and may have offer superior QOS guarantees such that Content Provider A's bits always get to the IXP on "better than best efforts terms." That may not trouble me, but going to the point about the scope of AT&T's commitment, I'm not sure they have offered much, particularly since AT&T probably will self provision to the closest IXP and may do so onward.

     

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