Net neutrality advocates celebrated this week after AT&T said it would pledge to maintain a "neutral network" in exchange for U.S. government approval of its proposed acquisition of BellSouth.
The US$86 billion (AUD$109 billion) acquisition is the largest telecommunications merger in U.S. history, and the latest in a wave of telecom consolidation that has left only two major players -- AT&T and Verizon Communications -- standing in the U.S. market.
The deal was approved by the U.S. Federal Communications Commission (FCC) on Friday, one day after AT&T made a number of concessions to help push the acquisition through, including a pledge to maintain a "neutral network" for two years after the merger.
AT&T on Thursday offered the net neutrality concession -- saying it will not prioritize or degrade network traffic based on "source, ownership or destination" for two years after the merger -- as an incentive for the U.S. Federal Communications Commission (FCC) to break a deadlock on whether to approve the deal.
Net neutrality advocates called the concessions a victory.
"We commend AT&T for committing to preserve access to an open Internet, and we thank the FCC commissioners, and their staff, for their hard work and dedication over the holiday season to advance consumers' interests," said Jim McGann, spokesman for the It's Our Net Coalition, a group of net neutrality advocates.
AT&T also promised to offer DSL (digital subscriber line) for US$10 a month to all new customers in its region, and it pledged to extend its broadband service -- either by wireline service such as DSL or other technologies such as WiMax or satellite -- to all customers by the end of 2007. The combined AT&T and BellSouth region would cover large parts of the U.S. South, Midwest and Southwest.
AT&T offered new concessions "in order to break the [FCC] impasse, and in the interest of facilitating the speediest possible approval of the merger," Robert Quinn Jr., senior vice president of federal regulatory affairs for AT&T, said in a letter to the FCC.
Some net neutrality advocates praised the FCC for holding up the merger until AT&T offered more concessions in addition to ones the company proposed in October. Democratic Commissioners Michael Copps and Jonathan Adelstein "stood firm in the face of intense pressure to ensure a fair deal for the public that would protect the neutral and open Internet," Ben Scott, policy director for advocacy group Free Press, said in a statement.
Scott called the net neutrality merger conditions an "important precedent," but he called on the U.S. Congress to pass a net neutrality law. Net neutrality was a sticking point in Congress' efforts to pass a wide-ranging broadband bill this year, but advocates say they will press the issue again in 2007.
Advocates of net neutrality say recent actions by the FCC and U.S. Supreme Court would allow broadband providers to block or slow Web content from competitors, but broadband providers say they have no intention of doing so.
The FCC, by delaying the merger approval, "can maintain a level playing field for all," Mark Cooper, director of research of the Consumer Federation of America, said in a statement. "This will be a win for the public."
Consumers Union also cheered AT&T's promise to cap broadband prices. The concession could create pressure for all Internet providers to keep prices low, said Gene Kimmelman, vice president at Consumers Union.
(Robert McMillian contributed to this story.)