AT&T agrees to net neutrality for two years

The furious battle over Net Neutrality that played out over much of 2006 in the halls of Congress, the papers of think tanks and the blogs, websites and email campaigns of the Internet may have been quietly put to rest in negotiations over AT&T (formerly SBC)'s acquisition of BellSouth, The San Francisco Chronicle reports.

FCC approval of the deal was deadlocked on party lines 2-2. To get the deal through, AT&T had to compromise. The company agreed to abide by current net neutrality rules for roughly the next two years. The company led the charge against neutrality in 2006. AT&T had wanted to be able to charge more to certain companies in exchange for giving preferential delivery of their content. Now they've agreed not to do that.

That gives Congressional Democrats time to put together the votes to make net neutrality the law. They're expected to introduce a neutrality bill soon. AT&T and other cables and telcos had once attacked neutrality as too vague to define. But the deal now gives specificity to the concept.

"This language is crafted as a practical implementation of neutrality," Columbia University law Professor Tim Wu wrote about AT&T's concessions. "As the first working rule, it may serve as a model and an experiment for what follows."

But of course AT&T's deal is not binding on other companies.

When asked by The Chronicle, Verizon, Comcast and Time Warner declined to say whether they will continue to honor this unofficial moratorium while AT&T's hands remain tied. But the prevailing wisdom on Capitol Hill is that the big four won't rock the boat while Congress is considering whether to make AT&T's temporary agreement the basis for a net neutrality law that would bind them all.

With the Democratic victory, Ed Markey (D-MA), one of the key proponents of neutrality in the House, will introduce a new bill - this time as chair of the Commerce Committee's Subcommittee on Telecommunications and the Internet.

But says Jessica Zufolo, a telecommunications expert with the Medley Global Advisors policy research firm, it's not clear if the trend has fully shifted to the pro-neutrality side.

While many financial observers predicted during last year's debate that passage of a net neutrality bill would choke off investment to beef up the speed of Internet wires to the home, so far Wall Street has ignored AT&T's about-face. "By and large the market did not view (the concessions) as particularly onerous or even material,'' Zufolo said -- perhaps because there is a time limit. "It's a two-year moratorium," she said. "It's not like it's forever."