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Net Discrimination (AT&T Caves On Net Neutrality)
Wall Street Journal ^ | 2 January 2006 | Staff

Posted on 01/02/2007 8:11:05 AM PST by shrinkermd

...Net neutrality travels under the euphemism of "nondiscrimination," which sounds very nice. But what it really means in practice is that the government dictates what AT&T and other Internet access companies can charge users of their pipelines. So there's "discrimination," all right -- against the companies that have invested billions to lay that pipe.

The beneficiaries of this discrimination are Google, Microsoft, Yahoo and other very rich Web businesses, which have loaded up on Beltway lobbyists to have these mandates imposed. Democrats are taking the PAC money and running interference. The Democratic Commissioners -- Jonathan Adelstein and Michael Copps -- were able to extort this concession from AT&T because one of the three GOP Commissioners recused himself from voting on the merger under pressure from Democrats on Capitol Hill. It was a nasty game of bad cop-worse cop, and it is probably a portent of things to come.

The one thing no one should be deceived about is that this ambush has anything to do with "consumers." Internet users will benefit most from the rapid rollout of broadband, which requires letting companies get a return on their investment. Net neutrality is all about imposing price controls that shake down one corporate player for the benefit of another.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Constitution/Conservatism; Editorial
KEYWORDS: att; net; neutrality
This is going to be a long, drawn out fight.
1 posted on 01/02/2007 8:11:08 AM PST by shrinkermd
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To: shrinkermd

If the government can set the prices for internet access today, it'll be trying to regulate content tomorrow.


2 posted on 01/02/2007 8:14:17 AM PST by CFC__VRWC (AIDS, abortion, euthanasia - Don't liberals just kill ya?)
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To: CFC__VRWC

it's not about government setting prices, it's about whether access providers can blackmail large companies by threatening to provide substandard service if they don't pay.

What some of those providers want to do is charge twice for the same bandwidth - and one of those parties isn't their customer. Instead of charging their own customers more for internet access, they want to be able to compete in that market on price while soaking places like amazon for the 'privilege' of letting the ISP customers get to their website normally. That's nothing more than blackmail.

Imagine you run a company that takes a lot of phone calls. You already have phone service you pay for. 50% of your incoming calls come from people with, say, AT&T for their home phone service. One day AT&T comes to you and says "You know, people are using AT&T lines to call you. We know you already pay for your own phone service. But you should pay us an extra fee because a bunch of those phone calls are coming through us. And if you don't pay, your connections with those customers might be really bad and you could end up losing business because of it".

That's mafia like activity. You can't go up to a non customer and threaten them. If they want to make more money, they should charge their own customers more, not shakedown big companies that aren't their customers via threats.


3 posted on 01/02/2007 8:30:01 AM PST by flashbunny (If the founding fathers were alive today, they'd be buying feathers and boiling tar.)
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To: flashbunny

If you own the line you should be able to do what the hell you want with it. Blackmail involves the violation of individual rights; there is no such thing here. Considering the billions spent on the network, regulation of this sort is clearly a taking and is theft.

As for your AT&T scenario, that already happens with cell phones. Say you’re with AT&T (Cingular when they merge with BellSouth) and the only towers in the area where you live are Sprint. AT&T has to pay Sprint everytime you make call that connects through their tower. Usually if about 70% of your calls go through another providers tower then you become unprofitable and they cell company drops you.


4 posted on 01/02/2007 9:19:58 AM PST by Raymann
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To: flashbunny

Well said FlashBunny.

I will only add that Ed Whitacre (ATT CEO) is the "Greed Devil" incarnate with nothing but aspirations to be the bully of the industry. If he had his way he'd clone himself as Carlos Slim Helo of Telmex and instill a similar monopolistic reign in the US where a family's telecom expenditures are 30% of their income.

Furthermore, there are countless legal cases and FCC hearing records where ATT refuses to pay other carriers under set law and regulation with only a plan to strong arm smaller player into smaller financial settlements.

I say anything and everything that makes ATT step back from their desired path is a win for Americans.


5 posted on 01/02/2007 9:26:25 AM PST by off-roader
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To: Raymann

If there was true competition instead of two, quickly becoming one, choice, your point would be valid.

But it's not.

There is regulation and local monopolies. The choice is not free competion or regulation, but the right regulation.


6 posted on 01/02/2007 9:29:07 AM PST by D-fendr
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To: Raymann

Raymann, you are wrong.

There is no settlement between wireless companies for (local to local) calls. This same non-settlement scenario prevails more and more for wireline calls too.

Access charges do remain for the receiving company on any scenario where a long distance call is delivered to the local company, either wireless or wireline. And in this scenario, ATT attempts to cheat on their payments across the board.


7 posted on 01/02/2007 9:30:49 AM PST by off-roader
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To: off-roader

You could be right, I haven't read up on that in a while.


8 posted on 01/02/2007 9:50:26 AM PST by Raymann
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To: D-fendr

The argument isn’t about competition, its about rights. The government has no right telling either an individual or a company what to do as long as they’re not violating individual rights. Other then socialists and fascists, there is no moral or philosophical system out there that would consider such an action moral.

This is the same situation as if the government told you you had to let people walk across your yard to get to the other side and you couldn’t get compensation from them.


9 posted on 01/02/2007 9:54:56 AM PST by Raymann
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To: D-fendr

The argument isn’t about competition, its about rights. The government has no right telling either an individual or a company what to do as long as they’re not violating individual rights. Other then socialists and fascists, there is no moral or philosophical system out there that would consider such an action moral.

This is the same situation as if the government told you you had to let people walk across your yard to get to the other side and you couldn’t get compensation from them.


10 posted on 01/02/2007 9:55:23 AM PST by Raymann
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To: shrinkermd
Sorry but the right to provide Internet access is already control by the government ...

The government controls the easement for all utility "land line" in to property...and wireless bandwidth is also limited by available spectrum and again controlled by government....

This is not a free market in that you can go to any one for "real" access..(You and any ISP you choose still have to deal with someone else having a government granted access monopoly between you and your ISP choice)

The government gives right to land line easement/broadcast spectrum to provide telcom/Internet access .. that a necessity of physical reality of providing the "pipe" there a natural monopoly (or we could go for unregulated broadcast and unregulated running of "land-line"everywhere and see what happens)

The free market in not in the pipe...the free market is in the content provided in the pipe....

If the government license,government granted monopoly pipe provider think there getting screw the can give up there government granted "access provider" monopoly.... and go in to the "content provider" free market

11 posted on 01/02/2007 11:11:51 AM PST by tophat9000 (Al-Qaidacrats =A new political party combining the anti American left and the anti Semite right)
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To: off-roader
I say anything and everything that makes ATT step back from their desired path is a win for Americans.

At its core, this issue is a matter of control. Should a company be permitted to control its assets, or should the government?

The amount of money involved, the technology in question, who the customer is, those are all entirely beside the point. If AT&T paid for and owns the network infrastructure, then they should be able to set their prices as they see fit. If a customer is free to choose to do business with AT&T or not, then AT&T should be free to charge what ever they like.

Don't let your dislike of a corporation fool you into thinking that government control is better. It never is. Those who don't like AT&T are free to do business elsewhere. If the government is in control, then you have no choice.

12 posted on 01/02/2007 11:22:16 AM PST by TChris (We scoff at honor and are shocked to find traitors among us. - C.S. Lewis)
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To: shrinkermd
Is the Internet broken? It seems to working fine the way it is now. These companies seem to forget they enjoy a cooperative and beneficial relationship with the government regarding these transmission lines. It's a privileged position, and the government has sponsored their research, development, and implementation to a large degree.
13 posted on 01/02/2007 11:22:23 AM PST by Chief_Joe (From where the sun now sits, I will fight on -FOREVER!!!)
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To: flashbunny
it's not about government setting prices, it's about whether access providers can blackmail large companies by threatening to provide substandard service if they don't pay.

That is unadulterated BS. Only socialists and liberals use terms like "blackmail" to characterize competetive practices. If access rates are so onerous to "large" corporations, let them invest the capital to build thier own infrastructure.

The number one reason that the telecom industry in such a snared-up mess is government regulation. I just have to chuckle when so-called "conservatives" start defending government interference in the markets when it involves something they have subjectively defined as "unfair."

As the article states, this is nothing more than corporatist warfare in which one corporation uses the weight of the government, bought and paid for with PAC money, as a weapon against another corporation, all because they are just too lazy to actually compete.

14 posted on 01/02/2007 11:25:47 AM PST by NCSteve
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To: off-roader
Raymann, you are wrong.

No he isn't.

He is talking about roaming charges, although using Verizon and Cingular as examples won't work since they use different technologies. Inter-carrier roaming settlement charges amount to several tens of millions of dollars a day.

I'm not sure what you mean about AT&T "cheating" on their long distance access payments. Wireless-to-wireline long distance is handled on a wholesale basis. I don't know of any wireless company that charges its customers long distance any more.

15 posted on 01/02/2007 11:36:12 AM PST by NCSteve
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To: flashbunny
...it's about whether access providers can blackmail large companies by threatening to provide substandard service if they don't pay.

What some of those providers want to do is charge twice for the same bandwidth - and one of those parties isn't their customer. Instead of charging their own customers more for internet access, they want to be able to compete in that market on price while soaking places like amazon for the 'privilege' of letting the ISP customers get to their website normally. That's nothing more than blackmail.

Your assertion is that an ISP can police traffic inbound to it's network, downgrading traffic of companies it doesn't like...Please illustrate technically how one would manage to do what you assert. I want the exact technical explanation, and don't spare the details, you won't confuse me I assure you.

Regards,

Col Sanders

16 posted on 01/02/2007 12:12:50 PM PST by Col Sanders (I ought to tear your no-good Goddang preambulatory bone frame, and nail it to your government walls)
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To: NCSteve
If access rates are so onerous to "large" corporations, let them invest the capital to build thier own infrastructure.

Put it this way... if the only choice you have is dial-up and a cable modem from your local provider, and your local provider decides that too many people are using Amazon.com and as a result Amazon is using too much bandwidth and they start reducing Amazon's bandwidth, don't come crying to me. Because without net neutrality that scenario will be repeated 100 times over. That's what this is all about, keeping the playing field level.
17 posted on 01/03/2007 4:53:27 PM PST by Bulwark
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To: Bulwark
Because without net neutrality that scenario will be repeated 100 times over. That's what this is all about, keeping the playing field level.

More BS. Refer to Col Sanders response above. And once again, I find so-called "conservatives" bleating for government intervention to "level the playing field" to be highly ironic.

Net neutrality is about making sure that corporate entities like Microsoft and Google have government-protected access to infrastructure they didn't have to pay for. It is corporate welfare.

Like other socialists, you have mistaken Internet access as a "right." Net neutrality is the CFR of corporate regulation.

18 posted on 01/03/2007 5:27:35 PM PST by NCSteve
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To: NCSteve
Like other socialists, you have mistaken Internet access as a "right." Net neutrality is the CFR of corporate regulation.

What if my state started to shake down Target because they have so much traffic that they're increasing road repair rates? It's the same thing.
19 posted on 01/03/2007 6:35:43 PM PST by Bulwark
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To: flashbunny

What if CNN said that not only do you have to carry CNN,CNN2,CNN3 but you also have to have every 5th channel be a cnn channel AND the cable boxes had to be programed to automatically be on CNN every time the TV is turned on AND the vchip could never block any CNN channel.

I am torn on this one. On one hand it is free market, but on the other hand it is about silencing dissent. (why should a large corporation be able to obliterate an upstart by prohibiting bandwith to competitors.)


20 posted on 01/03/2007 6:41:34 PM PST by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: Bulwark
It's the same thing.

No, it isn't. Not even close.

First, net neutrality is about disallowing infrastructure owners from giving preferential treatment to traffic in which they have a financial interest. It has nothing to do with blocking or filtering traffic someone finds objectionable, for whatever reason. If we're going to use Target as an analogy, the comparison would be that the government is preventing Target from giving its store brands or a brand in which it has a financial interest more prominence on its shelves. Target isn't trying to keep you from buying Planter's nuts, but it is putting Target brand nuts in the premium store locations. The net neutrality equivalent is that Planter's bought some government regulators off with PAC money and got them to force Target to put Planter's nuts in the premium store locations. That's nothing but corporate welfare and socialism, so is net neutrality.

Second, you are using a government shakedown in comparison to operational and marketing procedures used by a private corporation. The government owns the roads and you aren't allowed to build other roads. While AT&T owns some of the infrastructure, Google and Microsoft are perfectly free to build their own Internet infrastructure. One of these things is not like the other.

21 posted on 01/04/2007 5:56:50 AM PST by NCSteve
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To: NCSteve
The correct analogy to broadband providers which have locally granted monopolies (ie, the cable companies and hardwire telcos) would be something like an electric utility. Yes, it's traded on the NYSE and pays a dividend, but the odds of anyone being able to start up a competitor are effectively ZERO.

Now suppose your electric company owned all the local Burger King franchises too, and decided one morning that Wendy's and McDonald's needed to pay 3x the current rate per kilowatt hour?

Would your response be, "Hey, Wendy's is free to go build their own hydro stationa and nuc plants if they choose?"

22 posted on 01/10/2007 2:47:30 PM PST by Doghouse Riley (No war unless it's total war for total victory.)
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To: Doghouse Riley
The correct analogy to broadband providers which have locally granted monopolies (ie, the cable companies and hardwire telcos) would be something like an electric utility.

AT&T provides DSL and/or cable broadband in various markets, but they have competition from other cable providers and private DSL providers. There is no monopoly. As a matter of fact, broadband Internet is an extremely competetive market. This part of your argument is incorrect, so the rest of it falls apart and need not be addressed.

23 posted on 01/10/2007 4:44:57 PM PST by NCSteve
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To: NCSteve
There's an FCC report at

http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-264744A1.pdf

which indicates that something like 98% of American broadband is either over cable (throttleable at will by the cable owner to discourage competition) or telco (throttleable at will by the telco to discourage competition).

I'm PAYING for my bandwidth, it's not a gift from the pipeline owner to me, to Google, to Vonage or anyone else. I'm entitled to use that bandwidth for any legal purpose, particularly if I'm using it for a service (VOIP) which competes with other business lines of the pipeline owner.

24 posted on 01/11/2007 11:24:58 AM PST by Doghouse Riley (No war unless it's total war for total victory.)
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To: Doghouse Riley
I'm PAYING for my bandwidth, it's not a gift from the pipeline owner to me, to Google, to Vonage or anyone else. I'm entitled to use that bandwidth for any legal purpose, particularly if I'm using it for a service (VOIP) which competes with other business lines of the pipeline owner.

Wonderful, but none of that supports your original assertion that the providers have a monopoly. You even admit that there is no monopoly. I am assuming monopoly was the (poor) excuse you were using to justify government interference in the market.

Your new argument falls apart logically. You pay for cable television as well, but you are limited to the programming offered. You have no ability (or right) to specify what or how the provider delivers programming. The networks practice discrimination in their programming. Are you proposing a "broadcast neutrality" law that forces television networks to provide equal access for every fool with an idea?

The fact is that you have bought the socialist argument for "fairness," something that doesn't actually exist. You seem to believe you have some "right" to internet access. You favor socialism if it suits your desires.

25 posted on 01/11/2007 12:45:36 PM PST by NCSteve
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To: NCSteve
Well, in my neighborhood there is a broadband monopoly. I have a choice of Charter cable or nothing. And as a matter of fact, other cable companies are prohibited by community ordinance from offering their services to me.

You may call that a free market but I don't.

26 posted on 01/11/2007 1:54:28 PM PST by Doghouse Riley (No war unless it's total war for total victory.)
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To: Doghouse Riley
Well, in my neighborhood there is a broadband monopoly.

I see, and your neighborhood is the macrocosm of internet service. It is ever the excuse of the closet socialist that government intervention is acceptable when one's own ox is being gored.

You may call that a free market but I don't.

I never said it was a free market. Telecom is one of the most heavily regulated industries in this country. I was simply refuting your argument that there was a monopoly. Try as hard as you will, there is not a simple dichotomy of monopoly or free market. In any case, net neutrality will certainly do nothing to move the internet broadband providers toward a free market. It is a move in exactly the opposite direction.

27 posted on 01/11/2007 6:22:53 PM PST by NCSteve
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