The Open Access Debate
Last year, officials from Portland, Ore., first began work on a transfer
agreement with AT&T Cable Services — the behemoth telecommunications
firm that had recently acquired TCI, the city's local provider and the country's
largest cable company. They included a clause that seemed innocent enough
at the time: Give network access to other Internet service providers.
Internet has grown up on the phone system, but everybody has always gotten
to choose their own ISP," explained David Olson, director of the Portland
Office of Cable Communications and Franchising Management. "That choice
has helped make the Internet grow. At the time, we certainly didn't think
it was controversial."
AT&T did. The company, which has an exclusive contract with its
subsidiary [email protected] to provide ISP services, sued.
Last June, the federal
district court in Oregon ruled in Portland's favor. AT&T appealed, and
the case is still pending before the 9th Circuit Court.
concerned with the lack of consumer choice, are watching the case closely.
Broward County, Fla., rejected a transfer agreement with MediaOne (recently
acquired by AT&T), while San Francisco debated the issue and decided
to reject the open access argument.
Pittsburgh, eager to get its networks
upgraded and running, managed to sidestep the issue by including a "most
favored nation" clause in its franchise agreement and linking it to the
Portland case. If the court rules in favor of the Oregon city, AT&T
must adhere to that ruling in Pittsburgh as well.
AT&T said it's the
one that has no choice at the moment, citing its legal obligations. "We're
committed to being open to other providers once the exclusive contract that
we have with [email protected] expires in 2002," said Steve Lang, vice president
of communications at AT&T Broadband. And, he said, consumers do have
a choice. They can use another provider, such as America Online Inc., if
they run it in conjunction with the @Home platform.
The Federal Communications
Commission has taken a neutral stand on the case, but spokeswoman Michelle
Russo said the agency's position has always been to tread lightly with
"This market for high-speed Internet access and broadband services is
very new. And we think that there should be no regulation on the local,
state or federal level at this point because...regulation would stifle investment,"
she said. "We think that Americans should have a choice, but we'd rather
wait and let the marketplace work it out."
Back in Portland, the stakes have been ratcheted up. AT&T has refused
to offer any broadband Internet service until the issue is cleared up, so
last September, the city put out a nationwide request for qualifications
for a broadband provider willing to overbuild the incumbent system. The
response was overwhelming. Nine companies responded, and at present, four
providers — WideOpenWest, Open Access Broadband Networks, RCN and Western
Integrated Networks — are actively involved in franchise negotiations and
are prepared to offer open Internet access.
"Our cup runneth over," Olson
said. "A lot of people predicted that our open access condition would lead
companies not to want to do business here, but I think we've disproved that
theory with a vengeance."
As a result, he said, AT&T will have to compete for market share
of the basic cable service, and consumers will have a choice for broadband
phone, video, TV and Internet. "We're looking forward to improvements in
quality of service on the part of everybody and better rates and packages
for customers," Olson explained. "The consumers are the real winners here."