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from: TPM Cafe

The Price of Net Neutrality

By Art Brodsky

Kevin Martin, the chairman of the Federal Communications Commission, was sold out in the merger of AT&T and BellSouth. He wasn't undercut by the other commissioners who disagreed with him, even though Martin took out his anger at them. He was sold out by the company for which he had extended his prestige -- AT&T. On top of that, Martin has made life for himself just that much more difficult dealing with Democrats in Congress, even as he accepted the foundation for a more open Internet.

As Democratic legislators start the process of running the legislative branches of government, it’s worth a moment to take a last look at the unusual statement on the AT&T/BellSouth merger issued by FCC Chairman Kevin Martin and his colleague, Deborah Taylor Tate. The merger conditions, approved Dec. 29, enshrined the concept that companies that offer service like AT&T can’t discriminate in how they provide content. That’s the shorthand for Net Neutrality.

AT&T agreed not to sell as service that “privileges, degrades or prioritizes” any data transmitted over its network. Martin and Tate didn’t like that condition, among others, and said so in a statement issued when the deal was approved.

For an official document, the statement was remarkable for a personal tone rarely found in such statements. Martin and Tate know that their road ahead with the Congress controlled by the political opposition won’t be easy. The FCC has already received a couple of the legendary “Dingell-grams” from the now-and-again chairman of the House Commerce Committee, John Dingell of Michigan. Even so, it was striking to see in the middle of a discussion of how the landmark merger terms are in their view misguided, to see Martin and Tate refer to Commissioners Michael Copps and Jonathan Adelstein as “the Democrat Commissioners.”

The term “Democrat” as a noun is perfectly acceptable. As an adjective, it’s more suspect. Republicans for years have used it as a term of derision. Martin and Tate could have simply referred to Copps and Adelstein as “our colleagues” or even as “our Democratic colleagues.” Either of those would be acceptable in polite company. The use of the term “Democrat commissioners” was unnecessarily unpleasant, and Martin and Tate are likely to hear about it in the future from the Democrats who chair the House and Senate committees.

Perhaps some petulance snuck through as Martin anticipated having a third vote, that of Commissioner Robert McDowell, on his side. McDowell recused himself, leaving a two-two split. Martin shouldn’t have been surprised, because this was the second time McDowell had stayed out of a proceeding even though Martin wanted him to participate. In that instance, competitive carriers wanted a new look at access to facilities of phone companies. Last summer, FCC General Counsel Sam Feder had allowed McDowell to be recused, then reversed himself.

Martin and Tate used the phrase “Democrat Commissioners” this way: “Importantly, however, while the Democrat Commissioners may have extracted concessions from AT&T, they in no way bind future Commission action.”

As almost everyone can see, the merger conditions agreed to were very broad and comprehensive, as befits a merger of this size. The Net Neutrality conditions were very good, extending the non-discrimination principle far beyond the “last mile” from the phone company to consumers all the way up to an Internet Exchange Point, where the companies still could exercise market power.

The problem is that the ire of Martin and Tate is misdirected. They shouldn’t blame Copps and Adelstein. Those two were fighting for what they believed and trying to protect the public interest.

If anything, Martin (and Tate) should blame AT&T. Ed Whitacre is the one who sold them out. Whitacre took the deal. Here you had an FCC chairman willing to go to the mat for AT&T to have a deal with no conditions. That was fairly absurd on its face, but Martin stuck to it even as consumer anger rose that a merger to reconstitute 5/8 of the pre-divestiture AT&T was about to be put back together. He went out as far on a limb as you can go, and got stranded.

And yet, for Whitacre, in the immortal words from the Godfather movie, “It’s not personal. It’s strictly business.” Except that in the movie, it became personal, and it’s getting that way here also.

Martin not only stuck to his guns for AT&T during the negotiations, he’s doing so going forward. Not only did the FCC object to the conditions being in the merger agreement, Martin made the veiled threat the Commission would not enforce them going forward, and declined to recognize even that a non-discrimination principle was involved.

That’s going to be a hard sell on Capitol Hill when Martin and the telephone companies have to say with a straight face that the conditions are OK for the biggest telecom merger, but not as a formal policy.

Martin won’t win any friends either for his calculated insult to the Democrats, or for ignoring the plain language of the merger conditions AT&T accepted and he ratified. But if that’s the price for Net Neutrality, so be it.