The nation's top telco claims it is willing to meet the Federal Communications Commission halfway on net neutrality. The olive branch comes in the form of a letter that AT&T sent to the FCC on Tuesday, which suggests specific wording for Internet non-discrimination rules. In September the agency released a Notice of Proposed Rulemaking that would toughen up its Internet Policy Statement with an enforcement mechanism and transparency requirements.

Now AT&T Vice President James Cicconi says that's fine, just as long as the final Order "eschews a strict nondiscrimination standard and instead focuses on 'unreasonable and anticompetitive' forms of discrimination that adversely affect consumers." This phrasing is somewhat similar, AT&T notes, to the old 1934 Communications Act common carrier language that banned telcos from engaging in "unjust and unreasonable discrimination."

For those of you who are scratching your heads and pondering the difference between a strict standard and an anti-anticompetitive one, here's the distinction as AT&T sees it. The problem with a strict standard is that it could put the kibosh on the "availability of creative and innovative services that consumers may want to purchase."

Even worse, AT&T says, "a strict nondiscrimination rule would completely ban voluntary commercial agreements for the paid provision of certain value-added broadband services, which would needlessly deprive market participants, including content providers, from willingly obtaining services that could improve consumers' Internet experiences."

Indeed, the FCC's proposals as currently outlined would prohibit prioritized access rules, but they do include an exception for "managed services." The agency has yet to define what will fall under this category, but it might include everybody's favorite thing on the Internet: IP video. Even this loophole, however, is not sufficient for AT&T.

"We believe there should be no regulatory uncertainty when it comes to innovation," Cicconi insists.

Off limits

Speaking of great minds that think alike, the cable industry recently expressed concerns similar to AT&T's. In a big speech last week, Kyle McSlarrow of the National Cable & Telecommunications Association warned that the problem with a prioritized access ban is that ISPs wouldn't be allowed to offer "quality-of-service enhancements at nondiscriminatory prices, terms and conditions to anyone who wanted it. Such arrangements would be simply off limits."

We, of course, have no idea what AT&T and NCTA specifically want when it comes to "quality-of-service enhancements." But it's easy to anticipate the fears: that ISPs will offer different levels of network management quality and access to different content providers, depending on what they're willing or able to pay. Of course, the rates will be the same for everyone—who can afford them.

And sure enough, as we were typing out those AT&T quotes, the advocacy group denouncements came flying into our e-mail account at Comcastic speed. "After leading a rabid anti-Net Neutrality lobbying campaign for years, AT&T now submits a letter to the Federal Communications Commission purporting to offer common ground," warned Free Press. "What they are proposing would allow them to violate the core principle of Net Neutrality—letting them control the Internet by picking winners and losers in a pay-for-play scheme."

Ditto, says Public Knowledge. "AT&T has tried to draw what is an imaginary line among types of discrimination," declared PK's Gigi Sohn. "The company advised the FCC that while 'unreasonable' discrimination can be banned, any discrimination caused by 'voluntary commercial agreements' is just fine because the parties involved agreed to it. That is nonsense."

Peace of mind

Interestingly, AT&T's letter insists that it's just following the lead of others here, most notably United States Senator Olympia Snowe (R-ME), who sent the FCC a supportive statement on net neutrality in late October. It's from Snowe's commentary that AT&T appears to have derived the 'unreasonable and anticompetitive' couplet. Net neutrality will provide "peace of mind to users and developers by prohibiting unreasonable and anticompetitive discrimination that would affect Internet user's experience or choice," Snowe told the Commission.

AT&T even says it has drawn inspiration from Google, whose CEO Eric Schmidt posted a joint blog statement with Verizon CEO Lowell McAdam on open Internet questions last month. The telco's letter was particularly supportive of this passage from the commentary: "Broadband network providers should have the flexibility to manage their networks to deal with issues like traffic congestion, spam, 'malware' and denial of service attacks, as well as other threats that may emerge in the future," Schmitt and McAdam wrote, "so long as they do it reasonably, consistent with their customers' preferences, and don't unreasonably discriminate in ways that either harm users or are anti-competitive. They should also be free to offer managed network services, such as IP television."

But in its response to the telcos' letter, the pro-net neutrality Open Internet Coalition, to which Google belongs, accuses AT&T of mischaractizing the words of both Google and Snowe. When all is said, the telco "opposes a simple nondiscrimination rule to prevent network operators from discriminating against content and applications," OIG charges, "exactly what is necessary to protect the interests of its subscribers."

Still, in fairness to AT&T, whatever you think of its latest plan, the question of how to apply a "simple nondiscrimination rule" to the plethora of services that ISPs are required to carry appears to be anything but simple. The challenge is implied by the very fact that the FCC has created a "managed services" exemption for its proposed Order.

And when it comes to "faster Internet for more cash," deep-pocketed companies like Google can already buy better access by doing things like paying more for caching services, even co-locating caching servers in ISP data centers. But those arrangements do not require the ISP's own routers to give priority to any particular Web traffic.

Cicconi's missive concludes with support for an FCC launched advisory group to work on this problem and function as a source of "expert advice" for the agency on these complex issues. "It could also provide a venue for airing concerns and seeking consensus, without the need for regulatory intervention," Cicconi suggests. "Finally, it could lead to the creation of other collaborative efforts between and among the participants."