Phonezilla!

PHONEZILLA!
[SOURCE: Broadcasting&Cable, AUTHOR: John M. Higgins]
Just three days after cutting a $67 billion deal to buy BellSouth last week, AT&T Chairman Ed Whitacre got a precious gift from Washington. Key Congressional leaders agreed to allow the giant phone companies a national franchise license, essentially allowing AT&T and other telcos a painless entry into the cable industry’s core business of video services. Cable operators howled. “This is a huge step backwards,” wailed Kyle McSlarrow, head of the National Cable Telecommunication Association. If the proposed bill passes, he said, the government would be “giving the Bell monopolies a special break and a deregulatory advantage over their competitors.” The two events helped frame the escalating war between cable and telephone companies. As cable’s largest operators move to lure phone customers away from the likes of AT&T and Verizon, they are doing battle with formidable giants that are only getting larger. And, as their latest gains in Congress indicate, the telcos’ agility in the political arena may be pivotal in the multi-front fight ahead. Whitacre is creating a Goliath like no other before it. If the BellSouth deal is approved, AT&T will become the world’s largest telecom company and the nation’s seventh-largest company of any kind. AT&T’s $120 billion in revenue will not be just six times more than Comcast, the largest cable operator’s, but will exceed the revenue of the entire cable industry.
http://www.broadcastingcable.com/article/CA6315285?display=Feature&refer...
(free access for Benton's Headlines subscribers)

LET AT&T, BELLSOUTH MERGE
[SOURCE: Boston Herald, AUTHOR: Editorial Staff]
[Commentary] The AT&T-BellSouth merger should receive hands-off treatment from Congress, the Justice Department and the Federal Communications Commission. Already some consumer activists are pushing the argument that the merger ought to be conditioned on “Internet neutrality,” another outbreak of the activist virus that has hurt telecommunications before. But it just makes economic sense to charge according to demand and performance. At Disney World, you can pay extra to go to the head of the line. Some fancy restaurants charge more at dinner than at lunch. Resort hotels charge more in peak season. Gasoline costs more at 93 octane than at 87. The Internet poses similar issues. The network companies are competing furiously and committing huge sums to ever-faster data channels. There has been no letup in the stream of innovations. The phone companies are pushing to offer television; the cable companies are offering phone service. All of them should be free to enter markets and charge as they see fit - the networks may find that nobody is willing to pay a premium for truly blinding speed after all. A combined AT&T-Bell South would unite four of the seven “Baby Bells” that emerged from the breakup of the Bell System in 1984, but no one should fear a reassembly of Ma Bell’s near-monopoly. The Internet and the World Wide Web, cellphones, music downloads, satellite and wireless Web services, all of which did not exist in 1984, have utterly reshaped competition.
http://news.bostonherald.com/opinion/view.bg?articleid=130075

THE EDEN ILLUSION
[SOURCE: Washington Post, AUTHOR: Editorial Staff]
[Commentary] To the extent that the proposed AT&T-BellSouth merger will generate regulatory questions, these hinge on an issue that didn't exist 22 years ago. That issue is "net neutrality," the principle that cable and phone companies, which own the plumbing that connects you to the Internet, should make all Web sites equally accessible. It would be a mistake to force AT&T to promise net neutrality as a condition of its merger. Equally, legislative proposals to enforce net neutrality, including one introduced this month by Sen. Ron Wyden (D-OR), should remain just that: proposals. The proponents of net neutrality exaggerate the purity of cyberspace and understate the costs of regulation. If cable and phone companies are not allowed to charge Internet firms for fast delivery, they will be deprived of one source of profits. This will make it harder to raise capital to build the next generation of superfast Internet pipes, capable of delivering high-quality video. Moreover, any definition of net neutrality is likely to be contested in the courts, and legal uncertainty will further deter investment. As a result, net neutrality could end up meaning that all Web services get delivered at a similar but relatively slow rate. If the cable and phone companies start blocking out chunks of the Web's content, there will be opportunities for Congress to weigh in. But it's hard to see how these firms can expect to win extra subscribers by doing that.
http://www.washingtonpost.com/wp-dyn/content/article/2006/03/12/AR200603...
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* Ma Bell's back for better or worse
[Commentary] Over the past decade, policy-makers have loosened telecom regulations in hopes of innovation and competition. The result is a radically altered landscape of choices and technologies. But the cable and phone mergers are putting the picture into a new focus. It's time to watch carefully to see that customers are fairly served.
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2006/0...
* Idea of Web express lane sparks hot debate
http://seattletimes.nwsource.com/html/businesstechnology/2002861578_btex...

WILL THE HOUSE REGULATE THE INTERNET? COMMERCE COMMITTEE CONSIDERS ET NEUTRALITY
[SOURCE: Technology Liberation Front, AUTHOR: James Gattuso]
[Commentary] All eyes have been on the House Commerce Committee the past few days, as reports have floated about regarding a draft telecom reform bill being hammered out by the members. Committee chairman Joe Barton mooted two earlier proposals last year, both of which attempted to comprehensively reform telecom laws. Both -- especially the first -- were stillborn -- because of complaints that they imposed new regulation, rather than just free up this now-competitive market. This time around, Barton has tried a more targeted approach -- instead of all-inclusive reform, the legislation would be focused on eliminating local cable television franchise regulations, which have been slowing the advent of competition in cable TV. A smart move -- a rifleshot reform, and one that that would significantly help consumers. But a new version of the legislation would turn Barton’s original deregulatory intent on its head. Rather than eliminating obsolete and unneeded regulations of telecommunications, the bill would introduce new and equally unneeded regulations on the Internet. Lawmaking may be like sausage-making, but such a result would be particularly hard to digest.
http://www.techliberation.com/archives/037268.php
* Network neutrality important
[SOURCE: London Free Press (Canada), AUTHOR: David Canton]
[Commentary] We should pay the ISP for the data pipe coming into our homes as a service on its own, as we do now.
http://lfpress.ca/newsstand/Opinion/Columnists/Canton_David/2006/03/11/1...