AT&T CEO: Net neutrality ruling changes nothing

It's business as usual for AT&T as the company's CEO, Randall Stephenson, reassures the public that the company has no plans to alter its business practices in light of a federal appeals court's decision to throw out the FCC's Open Internet rules.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon
3 min read
AT&T CEO Randall Stephenson at Mobile World Congress 2011 Stephen Shankland/CNET

AT&T CEO Randall Stephenson reassured the public on Tuesday that AT&T is committed to keeping the Internet open.

Stephenson, who was answering a question posed by an equities analyst during the company's fourth-quarter conference call, said that AT&T has no plans to alter its service to capitalize on a federal appeals court's recent decision to repeal the Federal Communications Commission's Net neutrality rules.

The question comes almost two weeks after the DC Circuit court threw out the FCC's Open Internet rules, which were adopted in 2010. In its decision, the court said the FCC had the authority to create such rules, but because it had based the regulation on a shaky legal principle, it vacated the rules.

In the wake of the decision, Net neutrality supporters began sounding alarms about the potential harms that could befall the Internet if the FCC does not take action to fix its rules and put them in place. The primary concern is that the Internet will eventually succumb to the control of big broadband providers, such as AT&T, which control the infrastructure on which companies like Netflix and Google reach their users. Not only could AT&T and other broadband providers potentially block services that compete with their own similar services offered by these companies, but they could also charge these Internet companies priority access fees.

These so-called tiered services could destroy the openness of the Internet, critics warn. The result could mean fewer choices for consumers, as well as higher prices, and it might also lead to less innovation from startups that may not be able to afford to-pay-to-play.

The very notion of such an Internet where Internet companies would have to pay for access was first suggested by AT&T's former CEO Edward Whitacre in 2006. His comments back then essentially ignited the Net neutrality battle that has been raging ever since. Whitacre had been quoted in news reports as saying he didn't think companies, such as Google, should be given a "free ride" on his network. He ended up clarifying his position and stated that AT&T had no intention of making any content unavailable to consumers. Still, the idea of creating priority lanes on the Internet has lingered as a fear among Net neutrality supporters.

Stephenson, who took over from Whitacre in 2007, laughed when Whitacre's comments were brought up.

"The industry has come a long way since then," he said. "And in the last couple of years, the industry has worked and agreed to a framework for Net neutrality. So the court order really changed nothing."

He went on to say that AT&T is not changing how it operates in light of the court's decision to strike down the Net neutrality rules. And he said he doubts it will change how any other broadband providers operate.

He acknowledged that AT&T has introduced sponsored data plans. These are plans in which companies can pick up the tab for their users on the data they consume while using their services. AT&T introduced the concept of "sponsored data" for its wireless service at the Consumer Electronics Show earlier this month.

But he said he doesn't see this as a violation of the Open Internet.

"The 1-800 data plans allow companies to pay for customers to access content and the company pays the freight," he said. "I can't find how that violates Net neutrality."

Stephenson argued these plans are voluntary and allow AT&T wireless subscribers to access services without those services affecting their monthly data plans.

"Services like sponsored data will evolve overtime the same way that long distance grew and was scaled up," he said. "But I don't see the court ruling changing how we or anyone else operates."