Net Neutrality Debaters Agree on AT&T "Extortion"


The two sides in a heated network-neutrality debate in Washington Wednesday could agree on at least one thing: The network neutrality condition agreed to by AT&T/BellSouth to get FCC approval of its merger was political extortion.

Scott Cleland, CEO of the Precursor Group and chairman of the cable and telephone net-backed, first called the deal extortion and a political mugging. The deal was necessitated by a two-two Democratic/Republican split on the commission, with the network neutrality provision--for the first two years of the deal--necessary to get the Democrats' approval.

Gigi Sohn, president of Public Knowledge and a big backer of network neutrality, said she had to agree it had been political exortion, of which she was "happy" to be a part. "But that's just the way it is," she added.

Cleland began the debate, hosted by The Media Institute in Washington, by asking what network neutrality and Seinfeld had in common. "They are both shows about nothing," he said, arguing that there is no problem with access, and there are already laws on the books to deal with problems if they arise.

Sohn, who backs a recently introduced bill that would mandate net neutrality, said the problem is not the isolated instances of discrimination, which by themselves would probably not justify regulation. Instead, she said, it is the fact that 98% of the broadband market is controlled by cable and telcos, with 40% of households having no choice in broadband provider. Network neutrality, she said, is pro-competition regulation.

Cleland said that just as satellite has taken a 30 million-sub bite out of cable video service, broadband competition would grow as well. Calling them two imperfect systems, he said the marketplace was a better regulator of potential discriminatory conduct than government intervention.

Both Cleland and Sohn said broadcasters should be concerned about the issue. If broadcasters transition to IPTV or broadband delivery, said Cleland, they will fall under the network neutrality regime, he warned. Sohn said that regime would make it easier for them to distribute their content now--she cited CBS Leslie Mooonves and that network's aggressive multiplatform strategy---without worries of being discriminated against.

Adonis Hoffman, senior VP and counsel of the American Association of Advertising Agencies, asked what he should tell his members about the netework neutrality issue, which he said he was approaching with an open mind. Be Afraid, be very afraid," said Cleland. "Any content provider should be concerned," agreed Sohn.

OK, there were two things they agreed on.