AT&T Merger with BellSouth

The Internet is abuzz with worry about the possible negative implications of the merger of AT&T and BellSouth. One of the biggest fears is that the merger will threaten “Net neutrality,” which is more rightly called network price-controls.

The diversity of pricing that AT&T wishes to introduce won’t produce the Net-neutrality horror stories we’ve been warned about, but rather reasonable and understanable applications of packet management, a way of managings traffic on a network to ensure that vital information is given priority.

AT&T has announced two such ways that it will be managing data on its network. The first is a product offered to businesses called “enterprise managed IP services.” Because AT&T charges business customers more than it does home users, it needs to give some data packets priority to maintain the level of service promised to business customers. So, if you pay AT&T more for use of their network, you get faster and better service. Seems fair.

The other way in which AT&T will differentiate between types of traffic on their network involves its IPTV service U-verse. IPTV is a way of using IP, or Internet Protocol, to watch television programming. This traffic, however, doesn’t even flow over the Internet; rather, it’s exclusively available to users of AT&T’s network. One the major proponents of Net neutrality Tim Wu, a Columbia Law School professor specializing in telecommunications law and a charter member of the, supports this move by AT&T and has said:

“These services use only the private infrastructure built by AT&T, and do not rely on the public Internet as described by IP addresses. Hence the exclusion of private IPTV services should be considered less controversial. In fact, were the Network neutrality rules to apply to IPTV, it is doubtful that AT&T could offer its competing cable television services, leaving the cable market with even less competition.”

Despite this voice of reason, concerns remain among some in the net-neutrality (pro-price control) community. That’s because AT&T’s use of its own network for its own service leaves potential competitors like Joost, an up and coming TV-over-the-web provider, to compete with all the other internet traffic on AT&T’s network.

There are also fears that AT&T might also start “packet sniffing,” a practice that involves looking at data packets, the little bundles of data that contain everything from email to YouTube videos, and blocking or slowing down HDTV traffick. The technology exists to do this (Cisco’s SCE 2000 series of service control engines are an example of this), and it can be readily deployed.

But this technology only makes sense when the tremendous size of HD programming is considered. A full-length movie in HD is about 20GB. That file size would take nearly four days to download at 512kbps, which is a pretty standard DSL or cable connection. This means that the average feature length HD movie is equivalent to half a week of constant downloading — that’s a lot of network traffic!

The sad thing about the price-control crowd is that they realize that network neutrality is untennable. PC Magazine columnist John C. Dvorak has a video blog called “Cranky Geeks.” On the March 7th episode, PC Magazine Editor-in-Chief Jim Louderback revealed that even he realizes the consequences of neutrality. He griped about managing traffic related to Bit-Torrent, the popular file sharing service which is used for large resoultion videos, often illegally. He concluded his comments by saying, “The ISPs know they’re Bit-Torrent packets and they ratchet it down, because otherwise their network would be hosed.”

I’m sure that AT&T would like to avoid it’s network being “hosed,” or clogged with huge download traffic, especially since AT&T has recently announced that it’s pumping $750 million into broadband expansion and upgrades in 2007. That’s in addition to the last two years, which have seen AT&T bring WiFi to New York City and expansions of its wireless service, a total of $2 billion in investment between 2005 and 2006. For these billions in network invest to continue every year, AT&T must ensure that the bulk of its users, not just the download addicts and Bit-Torrent lovers, are satisfied with their service. That means managing its investments and its network so that all of its customers can enjoy their online experience.

Sorry Cranky Geeks, the network won’t be “neutral,” but it will get faster, spread out to more people, and improve in ways we can’t yet imagine. All thanks to the lack of network price controls.