The Big Deal:
Why AT&T and Microsoft are MediaOne

Eben Moglen*

June 11, 1999

In the end, 1999 will be remembered as the year in which cable television died and was reborn. At first it was just television with better reception. Then it was Home Box Office and the Cable News Network. Now, through the agency of Ma Bell's widower, AT&T, and the Microsoft Family, it is becoming the primary instrument of media convergence: the process whereby the telephone, the fax, television, radio, the movie and music industries, and most of the rest of what we think of as the American Way of entertainment and communications merge into one internet-based medium. In the last eighteen months, AT&T has purchased $130 billion dollars worth of cable television systems; Microsoft co-founder Paul Allen, through his company Charter Communications, has spent tens of billions more. Microsoft itself, chary of direct purchase of US cable companies, has been investing on a similar scale in the purchase of European systems. The deal announced at the beginning of May--in which AT&T acquired MediaOne for somewhere between $58 and $62 billion, and Microsoft then made a $5 billion investment in AT&T--was a particularly stark indication of what all this activity means. Certainly lots of ink was spilled over the deal. But no one, absolutely no one, told you why it really matters.

As usual, most of the press reporting focused on the magnitude of the numbers and the supposed drama of watching corporations throw other peoples' money around; the Washington Post called the deal a ``soap opera.'' On the left, a few voices spoke darkly of monopolization, of AT&T rebuilding the Bell System, or even--closer to the truth--of Microsoft's lust for Windows to run on the ``set-top box'' that will be the computer most people use most often. Most of this is wrong and the rest is half right, but none of it is the point. What these deals collectively do is to establish the basic structure of the future network society, one in which freedom of speech means mostly your freedom to watch whatever bilge the ``entertainment companies,'' or whoever owns them, want to pump at you.

What we have come, misleadingly, to call ``the Internet'' is not a thing; it's a set of rules, a ``protocol'' in technospeak, for connecting digital devices to one another. Those rules don't care what the devices are, or what the nature of the data they exchange. It can be live conversation, music, video, email or anything else capable of digital representation, exchanged among any devices that know what to do with it. The rules also don't care how data travels: over tin cans and a string, satellite radio, or anything in between. The ``carriers'' only matter because different ways of moving data have different capacities, known in the trade as ``bandwidth.'' Television-quality video, let alone high-definition digital video, consumes immense quantities of bandwidth; it cannot be transmitted over tin cans and string, or even the thin copper wires of the telephone system. Email, poetry, newspapers, political leaflets and other text consume little bandwidth, and can effectively be sent to everyone everywhere using just about any carriage technology at all.

The coaxial cables used for cable television systems are a high-bandwidth carriage medium, so connecting computers and display devices through that system would allow ``the Internet'' to distribute high-quality video, instead of the small, grainy, jumpy Victoria's Secret fashion show everyone was watching last year over telephone lines. This process, in which the World Wide Web becomes television, is the grand goal of the ``high-speed Internet for the home'' you are hearing about. In the process, if AT&T manages to route lots of internet traffic over the cables it has bought, it could also offer telephone-like services too, competing with its former body parts, the local telephone companies, for your calls around the corner as well as the long-distance call to grandma.

But the talk of monopoly of misconceived. Our homes have telephone wires in them even if they don't have cable television, and the telephone companies also have a new technology for squeezing more bandwith out of their wires, called Asynchronous Digital Subscriber Line, or ADSL. So AT&T and friends will be competing against telephone companies offering ``the Internet'' through ADSL, as well as high-speed wireless providers, and perhaps even the companies that own the wires that carry electric current. Of course Microsoft would like to force its expensive low-quality software onto all the machines connected to ``the Internet,'' but the rules defining how we connect machines are public rules; no one company can make the network its property unless the other competitors are stupid, which AT&T no longer is. Microsoft's investment in AT&T is designed to make sure it won't be shut out of the boxes AT&T uses to run our lives, not to lock up exclusive rights to our eyeballs.

What no one has told you about all these developing technologies, and the megabucks deals behind them, is that the players have all implicitly agreed to divide up the bandwidth into your home asymmetrically. The ``cable modem,'' ADSL, and all the rest of the high-speed services use the available bandwidth to make a big broad pipe into your home, but only a narrow pipe back out again. Watch the advertising next year when all the new services these deals are about become available. They'll all tell you about ``faster downloads.'' That means you can receive ``entertainment,'' ``news,'' or whatever passes for both that the content-manufacturers want to send you; AT&T and its competitors will get paid for delivering your eyeball to the advertisers. But don't try to send your own video out to the world; the system's not designed for that.

It doesn't have to be this way. There's nothing in the protocol we call ``the Internet,'' or in the coaxial cables and the copper wires, that says you have to be a ``consumer,'' while someone else is a ``broadcaster.'' In the age of the network, a society that really cares about free speech would eliminate the distinction altogether, letting everyone broadcast to everyone who wants to watch. The technology we have made could basically alter the balance of power in society, away from the owners of special communications privileges and towards the rest of us. Congress and the FCC could require the high-speed network of the near future to be symmetric in its use of bandwidth, so that neighborhoods, communities, and individuals could broadcast ``television'' to the world. Imagine the consequences. And imagine the fear of those for whom selling our eyeballs is the key to untold riches. They're not going to let it happen if they can help it. That's what these Big Deals are about. But don't expect Peter Jennings to explain it to you. And don't expect the politicians, who receive ``campaign contributions'' from the broadcasters and content-manufacturers, to press for an equal-speech network. We're going to have to do it for ourselves.

Eben Moglen is professor of law and legal history at Columbia University Law School. You can read more of his writing at