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AT&T CEO says Internet will remain open after BellSouth merger

AP Technology Writer

LAS VEGAS - Ed Whitacre Jr., the chief executive of AT&T Inc., dismissed critics who say its planned merger with BellSouth Corp. will form a near-monopoly for Internet access and give it the clout to dictate terms to Web sites if they want to remain reachable.

At issue is the current principle of ''network neutrality,'' under which all traffic is treated equally on the Internet. The major Internet carriers, with AT&T in the fore, want to be able to provide different tiers of service, giving higher priority to, for instance, Internet phone calls, which could improve their quality.

At the TelecomNEXT telecommunications conference in Las Vegas on Tuesday, Whitacre rejected the notion that this would harm the sites and companies that don't pay for premium service.

''There's been a lot of talk about this in order to scare people into thinking that access to the Internet is somehow at risk, or that the Internet as we know it is a thing of the past,'' Whitacre told attendees. ''AT&T will not block anyone's access to the public Internet, nor will we degrade anyone's quality of service.''

Content providers and Internet phone companies have equated tiered service with extortion, as Web sites that don't pay extra could become relatively harder to access.

Instead, they urge the carriers to improve traffic quality for everyone equally.

Whitacre said some have turned AT&T's acquisition of BellSouth, valued at $67 million when announced two weeks ago, into a ''referendum'' on net neutrality.

SBC Communications Inc. pledged last year to uphold the principles of net neutrality until 2007 as a condition of its acquisition of AT&T Corp. The merged company took the name AT&T Inc.

Analysts have noted that AT&T will likely have to extend that pledge for two more years to gain approval for the acquisition of BellSouth, which is expected to close next year. That would delay resolution of the issue until 2009.

The chairman of the Federal Communications Commission, Kevin Martin, addressed the conference in terms that were generally favorable to the carriers.

''We need to have a regulatory environment that allows companies to invest in their networks,'' Martin said.

Analyst Shiv Bakhshi of IDC said the issue facing the FCC is creating a balance that gives carriers incentives to improve Internet capacity, without creating ''an environment that is so pro-network operator that it stifles innovation.''