Q. Why is the cable-access controversy happening now?
In most other cities, local governments award franchises that give cable operators the right to serve the citizens of these cities. These franchises must be reissued whenever a cable system changes ownership.
Recently, AT&T purchased the cable systems of TCI, formerly the nation's largest cable operator, and announced plans to purchase MediaOne, another large cable provider. As a result, AT&T must get the approval of all of the cities served by TCI and MediaOne so that it can begin upgrading these cable networks. This is AT&T's first step toward providing high speed Internet service and competitive local phone service.
Q. So what's all the heat and noise about?
AT&T will offer local telephone service over its cable, bypassing the local telephone companies (or "telcos"). The telcos, like SBC/Pacific Bell, U.S. West, and GTE, know that AT&T's local telephone service will probably be cheaper than the service they offer today. So they're running scared.
AT&T also intends to offer high-speed Internet service at a substantially lower price than the telcos charge in areas where they have started offering their version of high speed Internet access, known as digital subscribe line (DSL) service.
The telcos are doing everything they can to keep competition at bay, including asking local authorities to make unreasonable demands on AT&T as a condition of the franchise transfers. One of these demands is that AT&T make its cable available to any other company that wants to use the cable to offer Internet services, including AOL.
Q. What's AOL's role in this?
AOL provides proprietary, or private, online content services similar to -- but not the same as -- the Internet. AOL's subscribers, who now number about 18 million, are severely limited in their ability to use the Internet because of AOL's restrictive technology.
AT&T's plan is to bundle its cable Internet access with the online content services of AOL's competitors, including Excite@Home. So AOL has joined the telcos in their campaign to restrict competition. What AOL is really asking for is a free ride on AT&T's cable. It wants local authorities to force AT&T to carry its online content services.
Q. Are these "open access" demands realistic?
NetAction thinks not. NetAction believes that if local authorities don't reject the appeals of the telcos and AOL, the result will be a conflicting array of local regulations that will make it uneconomical for AT&T to upgrade the cable networks. That would leave the telcos free to charge as much as they want for high speed Internet access over phone lines, and would delay, if not entirely defeat, the introduction of competition in local phone service.
This is not what Congress envisioned when it approved the Telecommunications Act of 1996. The Act was supposed to encourage local competition. Instead, there's been merger fever among the regional telcos. Now there are only four, bigger than before -- almost like the old monopolistic Bell System.
Q. What about the "Portland decision," in which a federal judge ruled that AT&T must open its cable. Can you explain that?
After buying TCI's Portland cable system last year, AT&T petitioned the City of Portland to approve the transfer of TCI's franchises to AT&T. The City said that AT&T must open its cable to AOL and other competing online content and service providers. You can read about AT&T's position at its web site. NetAction believes that if the Portland court's decision results in AT&T not providing local cable service, the competitive telecommunications market will never materialize.
AT&T is appealing the Portland decision to a higher court. This appeal will almost certainly be heard by the U.S. Supreme Court, but not for some time.
Q. So what can I do to make sure that competitive local telephone and high-speed data services arrive in my neighborhood on time?
Contact your local, state, and national representatives. Make sure they understand that the telcos' and AOL's version of "openness" is not what it seems and not good public policy.
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