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Divide and rule - AT&T’s new net neutrality tactic

AT&T is promising (at least in an off-hand, vague way) to lower broadband customer bills if it is allowed to charge upstream providers for ‘delivery’. The spur for this was, of course, the Netflix/Comcast spat over paid peering.

Comcast had demanded extra payment for its customers' habit of downloading more Netflix material; and Netflix made what was probably a strategic mistake by first agreeing to the payments and then moaning about it afterwards - no doubt because it wanted to moan from a position of moral strength rather than have its customers suffer substandard service because Comcast didn’t provide the peering capacity.

That saga has seen AT&T wade in with its old ‘flooding my pipes accusation’, ignoring as usual the fact that users are simply using the broadband connection that AT&T has sold them (at great expense) to download broadband content like video. That’s the deal. They get money, they give customers access to the Internet at the stated speed. End of. You’d think a capitalist would understand.

So yes, all the old arguments are rehearsed… again. But this time there’s a twist. AT&T claims that in opposing net neutrality it is, in fact, acting on behalf of its customers who ‘don’t’ download lots of video material and are therefore paying extra for those who do, since all are billed the same. So AT&T is like some sort of consumer organisation, acting on behalf of its poor customer and collecting proper compensation from the big bad companies who would avoid proper payment. Makes your heart bleed.

So if the FCC lets it do so, AT&T would charge upstream for excess video flooding and then deduct that from the bill of all those who don’t use lots of video. Of course it will.

The fact is, as studies have shown, this extra capacity requirement because of YouTube or Netflix or whatever, usually amounts to surprisingly little in monetary terms. But here’s an idea. Why go to all the trouble of billing Netflix and calculating these deductions, AT&T, when you could simply charge heavy users a little (emphasis on the word ‘little’) more, and light users a little less? Same outcome, problem solved.

But of course we know that AT&T and the other carrier/ISPs want a permanent up-stream charging component that they can work on over time so that, in the end, they can leverage their position to control the access network. Charging both sides for capacity is just a great way to do that. We know this because they've been saying it for years and, actually, this is the first time that we've heard about the poor non-video-watching user.

In a proper market, of course, these tricks wouldn’t work because users could go elsewhere and upstream providers could refuse to pay. But then, the US doesn’t have a proper broadband market. Much of Europe does, so let’s keep it that way.

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