In order to get its merger with BellSouth approved by the FCC, AT&T offered some last-minute concessions, including a promise to respect network neutrality for two years and a few other minor items. After that, Net neutrality could be dead in the water unless the Democratic Congress picks it up again and passes legislation to enshrine it. (Last spring, the Republican Congress killed a similar amendment).
Today, all bits on the Internet are treated pretty much the same, but Web companies like Google and Yahoo are afraid that telcos in the future will want to discriminate between bits and perhaps charge them extra tolls to have data from their Websites delivered over the high-speed lanes the telcos plan to build out for things like video and phone calls. In fact, if you read the fine print of AT&T's proposed agreement with the FCC, you will find that it wants to exclude its planned IPTV network from any Net Neutrality rules. IPTV is the technology the telcos want to use to compete with cable companies and deliver hundreds of TV channels to consumers. AT&T is expanding its IPTV trials to 15 cities in the U.S. Initially, the service is more of a private network that uses the Internet Protocol to deliver video. So just as a cable company reserves the right to pick which channels it will offer over its network, AT&T wants to be able to do the same thing.
As long as we are talking about traditional TV, there is not much to object to here. But the way IPTV works is that you get at least 30 megabits per second download speeds (compared to 786 kilobits to 3 megabits per second for DSL and cable today). When you are watching IPTV, you are using that bandwidth to stream video to your TV. But what about when you are not watching TV? AT&T's desire to exclude IPTV from any Net neutrality provisions indicates that it may want to also use that bandwidth to offer its customers a mega-broadband service.
Now consider what would happen if Johnny tries to watch YouTube videos upstairs while Mom and Dad are watching regular IPTV downstairs. AT&T, no doubt, would like to be able to prioritize its IPTV channels over anything coming from the Web. But if it has to treat all bits the same, then the streaming YouTube videos could degrade the quality of the Sopranos coming through IPTV since over the last mile it's all coming through the same pipe. You can see why AT&T does not want to have its hands tied by Net neutrality rules.
On the other hand, as more and more video becomes a regular part of the Web-surfing experience, AT&T's ability (and that of all the other broadband providers) to exclude anyone from Google to lone videobloggers from its high-speed IPTV network could cripple the future of video on the Web. AT&T could demand tolls to carry video over its IPTV network just as the cable companies charge carriage fees to all the TV channels. Otherwise, people will have to access that Web video over regular broadband, which will soon seem as slow as dial-up does today.
Of course, there is a simple solution to all this. AT&T should be able to prioritize its own bits when a customer is accessing an AT&T service such as watching HBO on IPTV. Those IPTV bits, which the consumer is paying extra for, should get priority over YouTube videos for which they are not. But if no other AT&T services are being used by that consumer over the network (whether TV, phone, or something else), then Net neutrality should be in effect.
(Here are more links to previous posts on this blog about Net neutrality)