AT&T Giving Ground on Net Neutrality?

As the Federal Communications Commission moves forward in a proceeding to codify Net neutrality into binding rules, one of the most prominent and longstanding opponents of the policy today offered a mild concession Tuesday.

In a letter to FCC Chairman Julius Genachowski, AT&T’s (NYSE: T) top lobbyist indicated that the telecom giant could support a rule that targets “unreasonable and anticompetitive” discrimination, rather than a blanket rule that would prohibit ISPs from any sort of prioritization or discrimination.

“By focusing on unreasonable and anticompetitive discrimination, the commission can enable innovation to occur at all levels of the Internet but still maintain the ability to respond on a case-by-case basis to allegations of unreasonable and anticompetitive conduct that materially harms consumers,” wrote James Cicconi, AT&T’s executive vice president of regulatory affairs.

“By contrast, a strict nondiscrimination standard could inadvertently limit the availability of creative and innovative services that consumers may want to purchase.”

Cicconi pressed against the blanket nondiscrimination policy, which he said “would completely ban voluntary commercial agreements for the paid provision of certain value-added broadband services.”

But that’s exactly the sort of activity that Net neutrality proponents oppose, and some of the more vocal voices in the debate lost no time in criticizing AT&T’s overture.

“AT&T has tried to draw what is an imaginary line among types of discrimination,” Gigi Sohn, president of Public Knowledge said in a statement. “The company advised the FCC that while ‘unreasonable’ discrimination can be banned, any discrimination caused by ‘voluntary commercial agreements’ is just fine because the parties involved agreed to it. That is nonsense.”

Free Press joined in, calling AT&T’s proposal a “bait and switch,” offering support of a baseline nondiscrimination standard but still resisting the application of common carriage telecom rules to broadband networks.

“It is couched as a compromise, but it is little more than an effort to cajole a toothless rule out of the FCC,” Free Press Policy Director Ben Scott said in a statement.

Highlighting the need for flexibility

Throughout his letter, Cicconi cited recent comments from Google (NASDAQ: GOOG), Verizon Wireless and Sen. Olympia Snowe (R-Maine), a long-time Net neutrality supporter. He highlighted the need for ISPs to have the flexibility to manage their networks to deal with congestion, a point that Snowe made in a letter she sent to Genachowski on Oct. 22, the day the FCC voted to initiate the rulemaking. The previous day, the CEOs of Google and Verizon Wireless — historic opponents on Net neutrality — made similar comments in a joint blog post.

But critics accused Cicconi of distorting the message, weaving fragmented quotes concerning network management with AT&T’s own opposition to a strict nondiscrimination requirement.

In her letter, Snowe did call for an “appropriate level of flexibility for network operators to effectively manage their networks” and warn against “overly prescriptive network neutrality regulations,” but she has also co-sponsored legislation seeking to prohibit ISPs from striking side deals with content providers, and warned against “the creation of a toll road on the Internet super highway.”

Markham Erickson, executive director of the Open Internet Coalition, which counts Google as a member, said “AT&T mischaracterizes the views of other voices in the network neutrality debate, including Google and Senator Snowe.”

The latest wrinkle in the Net neutrality saga comes as the FCC is launching a series of workshops examining the social, civic and economic implications of the proposed rules.

Around the time AT&T’s letter surfaced today, the commission was in the middle of the first in a series of such proceedings, focusing on “speech, democracy and the open Internet.”

Three of the five commissioners were on hand for the event, which heard stories from representatives from groups as diverse as the Christian Coalition and the progressive organization Center for Community Change talking about the importance of the Internet as a tool for civic action, and warning against the threat of ISPs restricting the transmission of political content on the Web.

The commission also heard from legal scholars, who clashed over the First Amendment implications of Net neutrality rules and the FCC’s authority to impose them.

The notion of free speech reemerged last week as the latest front in the war over Net neutrality, with the head of the cable lobby delivering a speech warning that prohibiting “a content or applications provider from paying to acquire the means to distribute its content in the form or manner it wishes” raises serious First Amendment concerns.

Opponents predictably fired back, arguing that the open Internet they are championing — the dumb pipe model where all content traverses the network without preference — is about preserving the essence of free speech.

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