[Infowarrior] - Has AT&T Lost Its Mind?

[Richard Forno]

Has AT&T Lost Its Mind?

A baffling proposal to filter the Internet.
By Tim Wu
Posted Wednesday, Jan. 16, 2008, at 10:15 AM ET
http://www.slate.com/id/2182152/

Chances are that as you read this article, it is passing over part of AT&T's
network. That matters, because last week AT&T announced that it is seriously
considering plans to examine all the traffic it carries for potential
violations of U.S. intellectual property laws. The prospect of AT&T, already
accused of spying on our telephone calls, now scanning every e-mail and
download for outlawed content is way too totalitarian for my tastes. But the
bizarre twist is that the proposal is such a bad idea that it would be not
just a disservice to the public but probably a disaster for AT&T itself. If
I were a shareholder, I'd want to know one thing: Has AT&T, after 122 years
in business, simply lost its mind?

No one knows exactly what AT&T is proposing to build. But if the company
means what it says, we're looking at the beginnings of a private police
state. That may sound like hyperbole, but what else do you call a system
designed to monitor millions of people's Internet consumption? That's not
just Orwellian; that's Orwell.

The puzzle is how AT&T thinks that its proposal is anything other than
corporate seppuku. First, should these proposals be adopted, my heart goes
out to AT&T's customer relations staff. Exactly what counts as copyright
infringement can be a tough question for a Supreme Court justice, let alone
whatever program AT&T writes to detect copyright infringement. Inevitably,
AT&T will block legitimate materials (say, home videos it mistakes for
Hollywood) and let some piracy through. Its filters will also inescapably
degrade network performance. The filter AT&T will really need will be the
one that blocks the giant flood of complaints and termination-of-service
notices coming its way.

But the most serious problems for AT&T may be legal. Since the beginnings of
the phone system, carriers have always wanted to avoid liability for what
happens on their lines, be it a bank robbery or someone's divorce. Hence the
grand bargain of common carriage: The Bell company carried all conversations
equally, and in exchange bore no liability for what people used the phone
for. Fair deal.

AT&T's new strategy reverses that position and exposes it to so much
potential liability that adopting it would arguably violate AT&T's fiduciary
duty to its shareholders. Today, in its daily Internet operations, AT&T is
shielded by a federal law that provides a powerful immunity to copyright
infringement. The Bells know the law well: They wrote and pushed it through
Congress in 1998, collectively spending six years and millions of dollars in
lobbying fees to make sure there would be no liability for "Transitory
Digital Network Communications"‹content AT&T carries over the Internet. And
that's why the recording industry sued Napster and Grokster, not AT&T or
Verizon, when the great music wars began in the early 2000s.

Here's the kicker: To maintain that immunity, AT&T must transmit data
"without selection of the material by the service provider" and "without
modification of its content." Once AT&T gets in the business of picking and
choosing what content travels over its network, while the law is not
entirely clear, it runs a serious risk of losing its all-important immunity.
An Internet provider voluntarily giving up copyright immunity is like an
astronaut on the moon taking off his space suit. As the world's largest
gatekeeper, AT&T would immediately become the world's largest target for
copyright infringement lawsuits.

On the technical side, if I were an AT&T engineer asked to implement this
plan, I would resign immediately and look for work at Verizon. AT&T's
engineers are already trying to manage the feat of getting trillions of
packets around the world at light speed. To begin examining those packets
for illegal pictures of Britney Spears would be a nuisance, at best, and a
threat to the whole Internet, at worst. Imagine if FedEx were forced to
examine every parcel for drug paraphernalia: Next-day delivery would soon go
up in smoke. Even China's Internet, whose performance suffers greatly from
its filtering, doesn't go as far as what AT&T is proposing.

If this idea looks amazingly bad for AT&T, does the firm have an ingenious
rationale for blocking content? "It's about," said AT&T last week, "making
more content available to more people in more ways going forward." Huh?
That's like saying that the goal of a mousetrap is producing more mice. If
the quote makes any sense it all, perhaps it means that AT&T, the phone
company, has aspirations to itself provide Internet content. Could it really
be that AT&T's master strategy is to try and become more like AOL circa
1996?

A different theory is that AT&T hopes that filtering out infringing material
will help free up bandwidth on its network. What is so strange about this
argument is that it suggests that AT&T wants people to use its product less.
That's like Exxon-Mobil complaining that SUVs are just buying up too much
gas. It suggests that perhaps AT&T should try to improve its network to
handle and charge for consumer demand, rather than spending money trying to
control its consumers.

I just don't get the business aspect, so perhaps the only explanation that
makes any sense is a political one. It may be that AT&T so hates being under
the current network neutrality mandate that it sees fighting piracy as a way
to begin treating some content differently than others‹discriminating‹in a
politically acceptable way. Or maybe AT&T thinks its new friends in the
content industry will let them into Hollywood parties if they help fight
piracy. Whatever the explanation, AT&T is choosing a scary, expensive, and
risky way to make a point. It is also, so far, alone on this one among
Internet service providers; the cable industry is probably licking its chops
in anticipation of new customers. That's why if this plan goes any further,
and I were an AT&T shareholder, I'd have just one thought: SELL.