AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) have publicly stated opposing views on dealing with copyrighted content that runs over their networks. (See AT&T to Filter Traffic?)

Speaking to the New York Times Tuesday, Verizon's executive vice president for public affairs Tom Tauke said: "We generally are reluctant to get into the business of examining content that flows across our networks and taking some action as a result of that content."

Tauke said Verizon is reluctant to police its network because of customer privacy issues, being held liable for missing copyrighted content, and the slippery slope of having to identify what should be blocked and what shouldn't.

AT&T, though, has a different take on the issue. Back in January, the operator's CEO Randall Stephenson told a conference at the World Economic Forum in Switzerland that AT&T was looking for ways to block the distribution of copyrighted material on its network. He equated the carrier's situation to "like being in a store and watching someone steal a DVD. Do you act?"

The main difference between the two carriers' positions is that AT&T is trying to figure out ways in which it could act proactively against illegal content, while Verizon only wants to act when a copyright issue is brought to its attention.

AT&T's position doesn't necessarily imply filtering content, but it is looking for ways to actively deal with piracy.

But is this difference in positioning more a difference of opinion, or a difference in network capabilities?

A popular theory on why AT&T would be more proactive in blocking copyrighted content is that it's looking for ways to reduce congestion on its fiber-to-the-node (FTTN) network.

Verizon meanwhile, doesn't face the same bandwidth issues on its fiber-to-the-home (FTTH) FiOS network.

But while capacity differences could be influencing the carriers' positions, it's likely more to do with content formatting than bandwidth, says Tom Nolle, CEO of CIMI Corp. , a technology research and consulting firm.

Since AT&T's U-verse network is all IP based, everything is transmitted in IP packets. "If I'm sending video out in packet form, someone can intercept that packet and digitally copy it," notes Nolle, who believes content owners will be seeking assurances from AT&T that it can cope with the piracy issues that its network architecture raises.

"Verizon, on the other hand, is an RF overlay, and doesn't come in IP packets, so it has no more risk than cable. AT&T may feel it has to be more proactive because the way it's delivering video is more susceptible," adds Nolle.

In fact, AT&T's bandwidth deficiencies compared to Verizon aren't even much of an issue when it comes to the huge amount of copyrighted content being shared on its network, suggests Nolle. That's because a heavy peer-to-peer (P2P) user has an unusual amount of uplink activity, and U-verse, unlike cable, offers symmetrical bandwidth.

"A single file-sharing user is going to produce a disproportionately large strain on uplink resources. But all fiber remotes and DSLAMs in RBOC DSL video are fed by Sonet with symmetrical bandwidth, so it's rather unlikely that a file sharer would do anything to an AT&T network that would have an effect on U-vere's behavior," says Nolle.

Eventually, both carriers could be forced to deal with the copyrighted content issue head on. As studios push the idea of watermarking copyrighted content, it becomes more and more difficult for a carrier to pretend to be ignorant of illegal content passing through its pipes.

"This notion of watermarking digital video to provide a mechanism to determine whether something was copyrighted or not would present a double barreled dilemma to carriers, because if it contains something that makes it easy to tell, then are you liable," suggests Nolle.

"It's the same thing as renting an apartment to someone who is running a drug operation when you know exactly that's what they're going to do," he adds.

When asked for comment, AT&T said in a statement: "Fair protection of intellectual property and copyright is critical to continued innovation —- be it from large media companies, smaller content providers, or individual artists and entrepreneurs. We have said categorically that we do not intend to be an enforcement agent or a policeman for content transported on our network."

AT&T added: "We want to set the record straight that we have not said we are going to filter, and in fact, there is no technology solution available at this time. What we have said is that we are working with some in the content industry on the very real issue of piracy that has raised costs for all Internet users. It is our hope that this relationship leads to encouraging the legal downloads of movies, TV shows, and other entertainment and content."

— Raymond McConville, Reporter, Light Reading