How AT&T Is Handling the Net Neutrality Debate

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On July 12, AT&T reaffirmed its support for net neutrality and the open internet. The move, timed to coincide with the internet “Day of Action” protests taking place around the nation, were intended to show Internet users that AT&T is firmly behind the development of a free, open internet.

Consider just some of the steps that AT&T took on July 12 – it displayed web banners articulating its support for an open internet. It sent messages to DirecTV users with the same message. And it gave internet users a very clear call-to-action: send a message to Congress to create lasting rules to make an open internet possible. And, to top it all off, AT&T linked to an “Open Internet” site on the company’s main website.

Why AT&T supports the open internet

There has been a common misconception in recent years that AT&T and other Internet Service Providers (ISPs) are not in support of an open internet. In fact, nothing could be further from the truth.

The open internet, as AT&T sees it, stands for several key principles, all of which are at the heart of the net neutrality debate:

  • Transparency in rules and pricing for customers
  • No blocking of Internet traffic
  • No censorship of Internet traffic
  • No discriminatory throttling of Internet traffic

All of these are principles that are also espoused by supporters of the open internet. That’s because they are all based around fundamental beliefs that most (if not all) American citizens have. These citizens don’t want companies trying to censor content, and they don’t want companies throttling or otherwise slowing down content that they don’t approve of or don’t support.

If you look at how the modern Internet has evolved, it’s clear that the key to innovation and competition is ensuring that traffic flows freely. Yet, the way that the internet is regulated is largely at odds with this vision of a free and open internet.

AT&T supports a new regulatory approach that favors innovation

The reason why AT&T has been so supportive of customers reaching out to their congressmen and congresswomen about the open internet is because the way the internet is regulated now is largely an anachronism. Congress has been looking for the right way to regulate companies like AT&T, and can’t find the right piece of legislation that will favor innovation and competition.

During the early 2000s, Congress settled on classifying Internet Service Providers (ISPs) under Title I of the Communications Act of 1934 as an “information service.” But then in the mid-2000s, the push was made to re-regulate ISPs under Title II of that same act, in which they would now be classified as “common carriers.”

You might think that switching from Title I to Title II wouldn’t be a big deal – but you’d be wrong. That’s because Title II was designed to regulate the original phone companies in America. As phone companies began to form and expand in America, there had to be some way to ensure that all communities could receive the same quality of phone service at an affordable price. It wouldn’t be fair, would it, if New Yorkers could make phone calls to each other at a certain level of quality, while those living in rural areas in America couldn’t?

And, in the minds of many people in Congress, the growth of the Internet resembles the growth of the phone companies. They envision wires and cables that the Internet Service Providers use to connect Internet service to your home, and that immediately reminds them of the wires and cables that the phone companies used to connect homes to phone networks. So they are adopting the same regulatory framework.

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What’s the best way to regulate companies like AT&T?

But is the Internet the same thing as your phone network? That’s hardly the case – think of all the things that you use the internet for – yes, you use it for communication purposes, but you also use it for other things, like entertainment or news or information. You can’t define what the Internet is because the uses for it keep changing. Who could have imagined streaming movies and TV shows over the internet even 20 years ago?

That’s why regulating AT&T under Title II of the Communications Act of 1934 seems so ridiculous. And so, on the “Day of Action” for the open internet on July 12, AT&T let that fact be known. One message that AT&T sent out to consumers simply read, “Make sure the internet isn’t subject to heavy-handed laws created for the rotary phone.”

So what are the other alternatives? Well, one suggestion that some have mentioned is Section 706 of the Telecommunications Act of 1996, which is much more up-to-date than the 1934 Communications Act, by more nearly 60 years. But it still dates back to 1996, during the early period of the Internet. Back then, Netflix hadn’t been invented yet. Facebook didn’t exist. There was no iPhone or iPad. So even that 1996 act might not be all that useful or effective.

There is one big advantage of the 1996 act over the 1934 act – and that’s the diminishment of the regulatory burden on companies like AT&T. Just one section of the 1934 act – Title II – runs to over 100 pages of rules and guidelines and regulations. That’s a lot! But compare that to Section 706 of the 1996 act – that’s only 2 paragraphs long!

And Section 706 specifically mentions the need to “promote competition” and “remove barriers to infrastructure.” Both of those are vital to today’s consumers. It means that they will have a choice of services in a very robust, very competitive marketplace. And it also means that companies like AT&T will have a much easier time deploying new, faster and more efficient broadband infrastructure. Everyone wins in this scenario.

So if any new legislation gets passed by Congress, it will almost certainly contain these two clauses – more competition and faster deployment. When AT&T talks about reducing the regulatory burden, it’s talking about moving from 100 pages of regulations to 2 paragraphs of regulations!

Title II is not the same thing as the open internet

The problem right now is that some people are trying to confuse the issue of Title II and the open internet. They see AT&T fighting against an old, obsolete and burdensome regulatory framework, and they assume that AT&T is fighting against an open internet.

But nothing could be further from the truth – AT&T has repeatedly laid out its support for all the most important principles of an open internet. And it has gone one step further by suggesting that the open internet be protected by a full and permanent law. Once net neutrality and the open internet are enshrined in law, it will be a lot harder for anyone to change it later. That’s going to benefit both AT&T and internet users, and is going to be one of those rare examples of a “win-win” in business.

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The fate of an open internet in a Trump administration

So why are we having this debate over the open internet now? The easiest answer is that the new Trump administration, which officially came into office in January 2017, has been signaling its support for changes to net neutrality.

If any changes are going to happen, they will start with the FCC, which now regulates the Internet. The current chairman of the FCC, Ajit Pai, is very much in favor of removing regulations and making it easier for companies like AT&T to invest in modern 5G infrastructure as well as create new innovative services for customers. From the perspective of the FCC, too much regulation is a bad thing for business, so it’s important to get rid of any unnecessary regulations.

That means that a decision about Title II could be coming soon. The FCC is very much in agreement with companies like AT&T that Title II doesn’t make sense. The FCC keeps asking the question: Why is Congress trying to regulate a modern technology company like AT&T the same way it regulates a phone monopoly? It just doesn’t make any sense.

Just keep in mind — if any change is forthcoming, it will meet a lot of resistance from people who are afraid that net neutrality is coming to an end. They will fear that the FCC is trying to end an open internet.

But, as we’ve seen above, that’s confusing the facts. All the FCC is trying to do is remove the burden from AT&T that’s keeping it from doing some really spectacular things with the Internet.

And AT&T is just trying to ensure that what it refers to as the “FCC merry-go-round” (the changes in FCC rules with every new administration) finally comes to a stop. AT&T doesn’t want to have to worry about the open internet with every new U.S. president – it wants the fundamental basis for an open internet to be set down in law so that it can move on to bigger things, like building a really cutting-edge broadband network for its customers.

Would AT&T support a compromise solution?

There is one other possible scenario in the net neutrality debate, and that’s moving regulation of the internet from the FCC to the FTC. That would be a recognition of the fact that ISPs should be regulated like all other commercial companies. That might be a way out of the impasse.

As companies like AT&T become even bigger, and as they get involved with even more kinds of services for customers, it’s clear that they can’t be treated as just “information services” or as just “communications companies.” It’s clear that a big company like AT&T, which recently acquired DIRECTV, is blurring the line between entertainment, communications and information. That should open up more opportunities for the further growth of the internet.

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