BROOKE GLADSTONE: This is On the Media. I'm Brooke Gladstone.

BOB GARFIELD: And I'm Bob Garfield. This week we learned of the imminent merger of AT&T and Bell South. If the deal goes through, the newly-reconstituted AT&T would provide 22 states with local phone service and would be a giant in the areas of data transmission and especially wireless communication. This is, of course, not your father's AT&T. In 1984, that company was broken up into seven baby bells and a long distance and equipment company. But the Telecommunications Act of 1996 allowed the business to partly reconsolidate, and eventually AT&T was bought by one of its babies, Southwestern Bell, which took its parent's name. Now the Telecommunications Act is being overhauled yet again, and we'll get into that in a few minutes. But first, we'll take a closer look at one of the burning issues under review, one that concerns both AT&T and anyone who uses the Internet – namely, the issue of network neutrality.

BROOKE GLADSTONE: At the moment, all online information travels at roughly the same speed. In other words, a page from eBay travels at the same rate as a porn site photo. But Internet watchdogs are warning that some data could encounter some speed bumps because Internet service providers may soon be charging content providers for access to the fast lane. AT&T chairman Ed Whitacre put it bluntly in November when he complained that content providers like Google were getting a free ride, saying “they use my lines for free. And that's bull.” Internet advocacy groups are outraged. They claim that the Internet's current, quote, "network neutrality is crucial to its egalitarian nature and innovative spirit.” Their concern has reached Washington, sparking FCC and Congressional hearings on the issue. Christopher Stern is a media policy analyst with Medley Global Advisors in DC, and he joins me now. Welcome to the show.



CHRISTOPHER STERN: Hi there.

BROOKE GLADSTONE: So let's say Internet service providers start offering preferential treatment to certain websites. Give us a worst-case scenario. How profoundly could it change the Internet?

CHRISTOPHER STERN: Well, the worst-case scenario, of course, is that you don't get access to information that you've been getting access to today, that you prefer Google but all of a sudden you find that it's too slow and that you're finding that Yahoo is super-charged and you get there, whatever you want from Yahoo much quicker. The worst-case scenario is something that could play out over several years. It doesn't have to happen tomorrow.

BROOKE GLADSTONE: Do you think that, you know, the AT&Ts of the world have any point at all [CHUCKLES] when they're charging that the Googles and Yahoos are really getting a free ride? Because if you look at it from another angle, Google has to pay some Internet provider to have their services connected to the Internet, and beyond that, Google doesn't use the Internet service provider's bandwidth. We're the ones that use it to get to Google, and we pay the Internet service providers a monthly fee to use it. So aren't the ISP's actually getting paid twice already?

CHRISTOPHER STERN: Well, you bring up a really interesting point, and I think the thing that fascinates me about this is some of the consumer advocates are saying this is the wrong way to go about it. Don't charge Google. Don't charge Yahoo. Charge the consumer. As a consumer, I can decide whether I want speeds of, you know, 20 miles an hour or 50 miles an hour or 100 miles an hour when it comes to accessing the Internet. That way, if you're an Internet service provider, your hand's off the dial and everybody stays pretty much on an even keel. But the fact is that Google and Yahoo or MSN, they do pay an incremental increase with traffic, but the AT&Ts of the world don't capture that value when they suddenly start moving a certain amount of megabits from MSN to a much larger – it's an incremental capture of value, not a wholesale one.

BROOKE GLADSTONE: So what you're saying is the Googles are getting a better deal out of this than the AT&Ts are.

CHRISTOPHER STERN: Yeah. And that's been part of the deal all along.

BROOKE GLADSTONE: Do you suspect that if this scenario played out, or if you could pay for a faster track through your Internet service provider, that this would leave out the little guy who now gets to work on a level playing field?

CHRISTOPHER STERN: I think that's the big fear, and it's certainly the argument that the advocates for net neutrality are using. They're saying not only the little guy, that new innovator, the next Google, the next Yahoo, won't be able to get onto the Internet because there'll be onramps that will cost a fee. This is the soul of the net neutrality debate, is whether or not we continue with a network that is completely – doesn't care who you are, where you are in terms of providing service to one that the owners in the network will put their finger on the scale and pick favorites and decide who gets there a little bit faster.

BROOKE GLADSTONE: There are a lot of Internet watchdogs that are concerned that one ISP or another could really dominate the market and determine what goes on in it. This is a common scenario. Could they outright block content from anyplace they wanted – you know, essentially cutting off a part of the Internet to a whole area?

CHRISTOPHER STERN: No. That's one thing that's been made pretty clear by the FCC in an earlier ruling. No ISP is allowed to block somebody from reaching a legal website or from reaching a legal service. There was a case where a small telephone company was trying to block access to a voiceover Internet protocol service, a rival service that allowed people to make calls over the Internet, and the FCC shut that down and fined that company, saying you've got to allow people to reach the services and use the Internet in the way they want to use it. So we're not going to see blocking. The question is are we going to see a little influencing of one website or one service getting there a little bit faster than the next one? The bottom line is I think that the government has to protect, either through rulings or through legislation, that the Internet remains a commercial meritocracy and that the best players rise to the top, not because of their commercial affiliations but because of how they do their work and how they perform and how accessible they are to customers.

BROOKE GLADSTONE: All right. Christopher, thank you very much.

CHRISTOPHER STERN: Thank you.

BROOKE GLADSTONE: Christopher Stern is the media policy analyst with Medley Global Advisors.