AT&T CEO explains why net neutrality is necessary

by Steve Blum • , , ,

Randall Stephenson, AT&T’s chief executive officer, offered a hell of good example of why he can’t be trusted to do the right thing and refrain from using his position as a dominant, monopoly-centric broadband service provider to benefit his equally hefty video content business.

In an interview with CNBC, Stephenson complained that his online competition is beating him up…

“Reality is, the biggest distributor of content out there is totally vertically integrated. This happens to be something called Netflix. But they create original content; they aggregate original content; and they distribute original content. They have 100 million subscribers,” Stephenson said on CNBC. “Look at Amazon. They’re doing the exact same thing. Amazon Studios, creating, aggregating, distributing; Google, YouTube, Hulu, this thing is prolific.”

Reality is, Stephenson has a choke hold on their necks. AT&T is a gatekeeper – for hundreds of thousands of Californians, the only gatekeeper – between those online video platforms and their subscribers.

He intends to make good use of that power, too. The “Internet bill of rights” that AT&T published, and claims to honor, conspicuously fails to include paid prioritisation on the list of network management tactics it promises not to use. Voluntarily promises not to use – there’s nothing preventing it from posting another version of what, reality is, a declaration of AT&T’s rights.

Even if all AT&T does is play the paid prioritisation game, it will gain a big competitive advantage over video platforms that don’t share the top-to-bottom supply chain control it hopes to gain from its proposed purchase of Time Warner’s content and distribution business. AT&T can raise the price of Internet fast lanes to the point where it forces the likes of Netflix and Amazon to either reimburse it for any profits lost to the competition they present, or concede the fight to DirecTv Now and other in-house content engines. Even if the established players can adjust, new video ventures would be blocked. High prioritisation prices won’t matter much to AT&T – it’ll just shift money from one pocket to another.

Reality is, what reality is.