AT&T Inc. (T): Net Neutrality A Pressing Issue

AT&T Inc.

AT&T Inc. (NYSE:T) CEO Randall L. Stephenson believes that conflicting issues surrounding the matter of net neutrality may take no less than the Supreme Court to settle. Speaking at an interview with CNBC’s Squawk Box, Randall stressed net neutrality as the most pressing issue  confronting the telecommunications industry in the United States. “We need a neutral Internet. I think everyone agrees with that,” Randall said during the interview.

U.S. President Barack Obama called for stringent net neutrality rules during his State of the Union address. The president previously asked the Federal Communications Commission in November last year to classify broadband services as a public utility. Last week, claiming to protect net neutrality without reclassifying broadband services as a form of public utility, Republican legislators from the House and the Senate proposed a draft law that will strip FCC of its rule-making authority. AT&T Inc. (NYSE:T) has announced last year the postponement of its proposed high-speed internet connection services in over 100 U.S. cities on the issue of internet traffic rules.

AT&T Inc.Some players in the tech industry, however, is not comfortable with the Republican draft legislation on net neutrality, on grounds that it contain loopholes that will permit broadband companies to prioritize some content to the detriment of others. Amazon.com, Inc.(NASDAQ:AMZN) vice president of global public policy Paul Misener raised concern over the provision regarding “reasonable network management”. In an interview with  International Business Times, Timothy Karr of the advocacy group Free Press emphasized that the provision on “reasonable network management” permits companies such as Comcast Corporation (NASDAQ:CMCSA) and AT&T Inc. (NYSE:T) to have an ample leeway to discriminate, even as it strips FCC of the authority to hold internet access as a common carrier.

Major internet providers have warned that their classification as a public utility will ultimately result in the worst internet service as the industry will be stifled. According to Randall, however, the issue of net neutrality will not affect AT&T Inc. (NYSE:T)’s $49 billion bid for DIRECTV (NASDAQ:DTV). “Buying DirectTV does not change the broadband market in any way, shape or form. We’re buying a company that’s purely a standalone TV business,” Randall told Squawk Box. AT&T announced last week that it is expecting a noncash charge of $10 billion, but stressed that its operating results will not be affected.

This article has been written by Nonito Guntan.

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