Media Wonk

Let's make a deal - June 15, 2007

The folks at AT&T must like being at the center of controversy.

In 2005, AT&T touched off the still raging Net neutrality debate when then-CEO Ed Whitacre declared, “For a Google or Yahoo or Vonage or anybody to expect to use [our] pipes free is nuts!”

This week, with Whitacre just days into his well-appointed retirement, senior VP of legislative affairs James Cicconi touched off a new controversy by revealing the telco was in talks with the major studios about filtering unauthorized copyrighted content from its network.

Because AT&T serves a major Internet backbone provider, its decision to filter content could affect a significant percentage of Web traffic in the U.S. It’s pretty hard to get a packet of data across the country without it riding on AT&T pipes somewhere along the way.

Many of the same voices that raised alarums over Whitacre’s comments quickly seized on Cicconi’s remarks as well.

“By attempting to act as the copyright police, the company is going to make its customers angry, even in a market in which customers have little choice of providers for high-speed Internet service,” Public Knowledge president Gigi Sohn said in a statement. “AT&T’s announced plans fly in the face of the expectations of consumers to use their material more flexibly, and appear to disregard the recent willingness of some in the content industry to oblige them.”

Added Electronic Frontier Foundation senior attorney Fred von Lohmann, “The risk AT&T faces is fighting the last war by spending money and energy plugging an old hole in the wall when new ones are breaking out.”

The outcry was so great Cicconi was forced to do some quick clarifying.

“We're not trying to be an enforcement agent against our customers,” Cicconi told the AP in response to the criticism. “The intent is to devise a network-based approach to dealing with this problem.”

He also acknowledged the technical and legal problems AT&T faces in actually implementing such a system.

“What we're trying to do here is see if we can devise a technology that can address the problem,” he said. “Then we'll have to address the legal issues that flow out of using such a technology.”

BY FOCUSING only on AT&T’s plans, however, it was easy to miss the subtle, but perhaps telling, shift in the media companies’ approach to the issue.

The origin of the discussions between AT&T and the studios was the telco’s need for programming to complete it’s “triple play” offering of voice, data and video services over the same optical fiber into subscribers’ homes.

Without content for its video service, AT&T, like other telcos, is at a competitive disadvantage to cable operators, who are rapidly moving into AT&T’s traditional voice and data businesses.

Those competitive pressures gave the studios leverage in negotiating content deals with AT&T, which they apparently used to persuade AT&T to agree to investigate network-level filtering.

That may seem like a dirty deal to critics of AT&T. But at least it was a deal--an actual business deal.

Rather than simply berating the platform provider, or demanding regulatory intervention to require filtering, the studios used their leverage and cut a favorable deal for themselves.

Even if you don’t like the terms of that deal everyone should be encouraged to see the content companies approach unauthorized copying and sharing as the business problem it truly is, rather than a technology or legal problem.

“We've been considering these issues of piracy, and we do feel the interests of our shareholders are aligned with the interests of the content community,” Cicconi said.

If the content companies would think more about aligning the interests of their shareholders’ with those of their customers, and less about how technology can hurt them, we might just get somewhere.

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