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Groups React to AT&T-MindSpring Cable Transport Agreement

Consumer and public interest advocacy groups are expressing concern over AT&T's agreement to begin opening its new cable broadband networks to rival Internet service providers.

According to the Consumer Federation of America, Consumers Union and the Center for Media Education, AT&T's actions offers no assurances that it will treat all ISPs equitably.

Jeffrey Chester, Center for Media Education executive director, said it was unfortunate that AT&T's announcement has more to do with public relations than with the public interest.

"It's not surprising that three of the six parties to the agreement refused to sign, which underscores the need for FCC action in this area," Chester said.

Chester added that the principle at stake is how to open access to cable networks in a way that facilitates the diversity and democracy of the Internet to high-speed broadband access.

"The battle to ensure open access to cable broadband networks must continue," Chester said.

C. Michael Armstrong, AT&T (T) chairman and chief executive officer, said the groups' should understand the delay is just a matter of AT&T's attempt to honor its exclusive contract with Excite@Home through 2002.

"They're frustrated that Excite@Home (ATHM) and the cable industry created a new business and a new technology to develop a new market and new lines of distribution and in doing so, crafted an exclusive arrangement facilitate it," Armstrong said. "When we acquired TCI we acquired the exclusive contract with Excite," he added.

Open access proponent Greg Simon, OpenNET Coalition co-director, said a more reasonable transition period for open access to AT&T's cable networks is to convert the closed system in a matter of months, not more than two years.

"The OpenNet Coalition welcomes the AT&T-MindSpring agreement because it ends the debate as to whether open access is good for business and consumers," Simon said. "AT&T concedes that the technology to share cable network access is available and that deployment should take place as quickly as possible."

Industry analysts speculate that because AT&T owns as much as 58 percent of Excite@Home's voting stock. AT&T could, in theory, renegotiate their exclusive contract with Excite@Home to readily facilitate deployment of cable services through many different Internet service providers.

Armstrong said it was true that AT&T does own a majority of the voting stock of Excite@Home, but that renegotiating the contract was not an option.

"We do have voting control per say," Armstrong said. "But if there was to be a redefinition, someone would have to pay."

Jim Cicconi, AT&T's general counsel, added the deal with Excite@Home is a valid contract with the people that built the cable network and that their shareholders have earned a return on their investment.

The consumer groups and open access advocates agree that the FCC Chairman William E. Kennard was right to take action and start the ball rolling with AT&T and national ISPs by asking industry leaders what cable access would be like when the exclusive contract with Excite@Home expire.

Representatives for each of the groups cite the fact that Kennard's cue to AT&T means that market forces have failed to open proprietary cable systems and government intervention is required to level the playing field.

Amy Cohn, Cox Communications