Cook’s Collaborative Edge

In a dark of night effort to sneak their anti competitive 85 billion dollar boondoogle across the goal line ATT last night released a densely worded legalese packed document filed at the FCC offering last minute concessions.

Dave Burstein of DSL Prime has sent out an excellent alert:

“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.

Cook’s Edge: I completely agree with Dave. Seeing that Ben Scott of Free Press had endorsed it, I reached Ben by phone and asked if he was aware of Dave’s criticism. Ben said “yes” and pointed me to the full paragraph which with i copy below.

From pages 8 and 9 of the filing - direct quote

AT&T/BellSouth also commits that it will maintain a neutral network and neutral routing in its wireline broadband Internet access service. 15 This’ commitment shall be satisfied by AT&T/BellSouth’s agreement not to provide or to sell to Internet content, application, or service providers, including those affiliated with AT&T/BellSouth, 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.

This commitment shall apply to AT&T/BellSouth’s 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, defined as 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 commitment does not apply to AT&T/BellSouth’s enterprise managed IP services, defined as services available only to enterprise customers 16 that are separate services from, and can be purchased without, AT&T/BellSouth’s wireline broadband Internet access service, including, but not limited to, virtual private network (VPN) services provided to enterprise customers. This commitment also does not apply to AT&T/BellSouth’s Internet Protocol television (IPTV) service. 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 commitment shall sunset on the earlier of (1) two years from the Merger Closing Date, or (2) the effective date of any legislation enacted by Congress subsequent to the Merger Closing Date that substantially addresses “network neutrality” obligations of broadband Internet access providers, including, but not limited to, any legislation that substantially addresses the privileging, degradation, or prioritization of broadband Internet access traffic.

end direct quote - my bold face in third paragraph

Cook’s Edge: This is horribly complicated stuff that I can not adequately critique. However despite the threat made that ATT can withdraw the offer if it is not approved quickly enough, the FCC should NOT approve TODAY. Someone needs to stand up to Chairman Whittacre.

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