S.F. Board Approves Watered-Down Open Access

BOSTON -- San Francisco's Board of Supervisors has rejected a proposal to force AT& T to open its cable networks to rival Internet service providers (ISPs) if the city of Portland, Ore., succeeds in its own attempts to open access.

The telecom giant applauded the move: "We think it was a fair outcome and one that really serves the best interest of the consumers in San Francisco," said Jim Cicconi, AT& T's general counsel.

The San Francisco board approved a measure submitted by a city supervisor after a recess in the board's public hearing on open access. The measure amends the city's franchise agreement with AT& T, permitting more time for AT& T to lobby against open access and other pre-emptive actions. The board voted to allow the city to re-examine the issue in December.

Open access is a rancorous topic these days in a number of cities. Entrenched local telecommunications providers and ISPs are pushing for regulators to force cable companies to open access to their broadband networks to third parties. Proponents of open access want cable companies to have to provide access to their networks to competitors, under deals that match those the cable operators give to their chosen ISPs.

Cable providers typically contract with ISPs to offer Internet access via cable broadband networks, forcing consumers to use a particular ISP and stripping users of any choice in the matter, proponents of open access argue.

AT& T has emerged as a potential cable giant with recent acquisitions, including Excite@Home and the Media One Group, and AT& T has been challenged in a number of communities. The Broward County Commission in Florida recently voted 4-3 to force open access in some areas of that county. GTE Corp., which offers local telecommunications service, pushed for that measure there and has pitted itself against AT& T.

AT& T is appealing that vote, and its briefs in that appeal are expected to be finished the first week of August, Cicconi said during today's press conference. After that, those in favor of the open-access measure in San Francisco will have a chance to voice their opinions in legal briefs. The case in Portland also is being appealed. AT& T lost a federal court lawsuit against that city.

Similar measures to force open access are being considered in other cities, including Denver, where a coalition of ISPs, communications companies and consumers recently launched a grass-roots campaign seeking voter approval to amend the 15-year cable franchise agreement between the city and county of Denver and AT& T Broadband and Internet Services. The coalition submitted double the signatures needed to the Denver Election Commission to qualify for the November ballot. The language of the ballot states that "to maximize access to the Internet, such service should be available to customers in a competitive atmosphere."

Such attempts are likely to continue, Cicconi said today.

"I don't think the opposition is going to fold their tent and go away," he said, adding that AT& T foes are "well funded" and would be at a distinct disadvantage if they are forced to have AT& T as a competitor.

Of course, AT& T itself is well-funded and has undertaken intensive lobbying efforts in cities where its potential dominance of Internet service via its cable acquisitions is threatened. Those local efforts are somewhat of a smoke screen, in Cicconi's view.

"I think the effort they're undertaking at the local level is really to put pressure on the [Federal Communications Commission] and Congress," he said, noting that both the FCC--the country's telecommunications regulator--and the U.S. Congress have thus far declined to force open access.

In addition, the legal authority that local governing bodies have when it comes to insisting on open access is questionable, Cicconi said. Broward officials acknowledged that they probably don't have the legal authority to enact a measure requiring open access, said Cicconi, who also said that the 4-3 vote there shows that sentiments are not unanimous.

"We actually feel pretty good about that case as well," he said, adding that "the law is clear."

He further decried the attempts of America Online Inc. to push for open access, saying in response to questions that AOL has not made an investment in broadband but, by using networks owned by competitors, wants to reap the rewards of those companies that have.

Open access is supported by an industry group called the OpenNet Coalition, which includes 200 ISPs pushing to open Internet cable networks to competition. The coalition last night released a written statement in response to the San Francisco vote, applauding the board's intention to reopen the issue in December when the franchise again comes up for consideration.

"We continue to be encouraged by these votes since all we're asking for is a chance to buy the high-speed access," OpenNet co-director Greg Simon said in the written statement. "We want to pay for access, but AT& T is intent on continuing to build its monopoly and shut out smaller ISPs to the detriment of consumers."

-- Nancy Weil

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