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[ NNSquad ] AT&T Filtering Plan Violates BellSouth Merger

A legal perspective that may be of interest to folks on the "squad".

-- tk

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AT&T Filtering Plan Violates BellSouth Merger

By Shawn Chang

Much ink has been spilled over AT&T's murky proposal to filter copyrighted material through its network on behalf of Hollywood.

The bulk of this reporting has focused on the sheer insanity of the proposal - and the legal nightmare it is sure to bring.

But less discussed - and equally important - are the ways AT&T's proposed filtering violates the Net Neutrality conditions the company reluctantly agreed to back in December 2006 to seal its mega-merger with BellSouth.

Any way you slice it, AT&T's filtering scheme spells disaster - not just for the phone giant - but for the free and open Internet we depend on.

No Safe Harbor

As Professor Tim Wu brilliantly articulates in his article "Has AT&T Lost Its Mind?," AT&T's filter could result in hundreds - if not thousands - of lawsuits against the phone giant for violating several "safe harbor" provisions.

For roughly a decade, safe harbor protections have shielded Internet service providers from liability for the content they carry over their networks. These provisions treat ISPs as a "passive conduit," preventing the companies from interfering with - or in some cases having knowledge of - the content flowing through their networks.

Based on what we know today, AT&T's filtering proposal is sure to violate this carefully crafted protection, making it a best friend of trial attorneys as the company faces off against a flood of legal claims from consumer, free speech and public advocates.

Merger Musts

AT&T's assent to Net Neutrality conditions in its merger with BellSouth was hailed as a victory for proponents of a free and open Internet - amounting to an admission from the phone giant that Net Neutrality protections are legally relevant.

In total, there were five conditions - each set to expire after 24 months, in January 2009.

AT&T agreed to four Net Neutrality principles promulgated by the FCC in a 2005 policy statement. The statement was put in place to "encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet" by entitling consumers to:

    1) access the lawful Internet content of their choice;

    2) run applications and use services of their choice, subject to the needs of law enforcement;

    3) connect their choice of legal devices that do not harm the network; and

    4) competition among network providers, application and service providers, and content providers.

Because of the magnitude of the merger, the Democratic commissioners of the FCC were able to attach an important fifth condition expressly prohibiting discrimination by AT&T:

    "AT&T/BellSouth also commits that it will maintain a neutral network and neutral routing in its wireless broadband Internet access service...satisfied by AT&T/BellSouth's agreement not to provide or to sell to Internet content, application provides, including those affiliated with AT&T/BellSouth, any service that privileges, degrades, or prioritizes any packet transmitted over AT&T/BellSouth's wireline broadband Internet access service based on its source, ownership, or destination."

In plain language, this last merger condition prevents AT&T from manipulating the delivery of content (made up of individual packets) over its network based on who sent it, who owns the content, and who receives it.

No 'Fair Use' Filter

The very first principle outlined by the FCC's policy statement - and agreed to in AT&T's merger conditions - states that consumers are entitled to "access the lawful Internet content of their choice."

Should AT&T devise an imperfect filtering system that misidentifies and blocks legal materials, especially those that qualify under "fair use," it could very well violate this fundamental Net Neutrality requirement.

The fair use provisions in our copyright law allow consumers to copy or transform a copyrighted work for the purposes of reporting, teaching, research and commentary.

These rules allow people to sample from copyrighted materials to create their own original work. This legal use of copyrighted content is an essential part of the democratic marketplace of ideas - online and off.

But imagine an imperfect AT&T filtering system that cannot distinguish between true copyright violations and those permitted under fair use.

Whether it's a new mash-up song by Girl Talk, or a viral video containing segments of a copyrighted material (such as Professor Wendy Seltzer's posting on Youtube of a clip copyrighted by the NFL), AT&T could be in clear violation of Net Neutrality - and its merger agreement - should it block such fair use materials.

Nondiscrimination: The Fifth Condition

Importantly, AT&T's proposal could violate its fifth merger condition.

Although we know little about the specific types of technology AT&T plans to deploy, it is not difficult to imagine that such technology may "privilege, degrade, or prioritize" packets traveling on its networks to block materials that they consider to be illegal.

In such instances, AT&T violates the fifth Net Neutrality condition because discrimination based on the copyrighted nature of a file amounts to discrimination based on ownership - or lack thereof.

At its very core Net Neutrality means no discrimination. Net Neutrality rules aim to prevent Internet providers from speeding up, slowing down or blocking content based on its author, origination or destination. They protect the consumer's right to use any legal equipment, content, application or service on a non-discriminatory basis without interference from the network provider.

AT&T's proposed filtering - with its apparent inability to determine fair use of copyrighted materials - stands in stark contrast to this basic concept.

Kissing up to Hollywood

So why is AT&T doing this? The filtering scheme may be a way for AT&T to cozy up to the content industries in Hollywood in exchange for exclusive distribution rights. In its effort to obtain content for new video services, AT&T will likely be stymied by decades of vertical and horizontal integrations within the broadcast and cable industries.

As the company moves from DSL broadband services to video-enabled broadband, it will be competing against a highly consolidated and self-dealing incumbent that maintains ownership in both production and distribution of content.

Indeed, just last month Time Warner announced that it will start a trial run in Wisconsin to make HBO (owned by Time Warner, of course) offerings available for free to its Time Warner cable or roadrunner.com Internet services.

It's clear that AT&T has not thought through the consequences of kissing up to Hollywood. It will likely be subject to private lawsuits based on its violation safe harbor provisions. It will also draw additional regulatory and congressional scrutiny based on violations of Net Neutrality.

Moreover, as users seek to maintain some semblance of privacy, the filtering regime guarantees to result in a global arms race in encryption technology, and increased government spying on Internet traffic for supposed law enforcement purposes.

Perhaps that is the reason why Verizon is resolutely opposed to copyright filtering on its own networks. Its lawyers have done their homework.

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Timothy Karr
Campaign Director
Free Press * www.freepress.net
SavetheInternet.com * www.savetheinternet.com 201.533.8838

reform media. transform democracy.