Public Knowledge points out AT&T’s new Terms which give different treatment to video based on its source. (No, it’s not neutral but of course, I think that’s fine.)

What right now looks like preferential economic treatment to an incumbent’s preferred bits is in fact setting the stage for putting such treatment up for sale. Mind you, the network won’t treat, say, iTunes’ actual bits any differently than anyone else’s. They’ll get delivered just like they are now.

However, it will be in iTunes’ (and Netflix’s and ESPN’s) interest to ensure that end users feel free to consume their services. Which means that these content providers will want to make a deal with AT&T (and Comcast etc) such that delivery of their videos and songs do not count against a user’s bandwidth limits.

It’s free shipping. Get a video from us and we pay the delivery. Really, it’s what Netflix is doing already.

Consumers’ bandwidth is subsidized by the content providers. The network providers get paid for building pipes.

It’s more expensive for content providers, but only if they choose to play. And they’ll play if one of their competitors does it first. It’s called competing on price.

The brilliance is that there is no non-neutral behavior by the ISPs. They deliver the bits regardless. Nothing is blocked or slowed. What changes is who pays.

The only way this violates net neutrality is if we further expand the already-squirrely definition.