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RealTime IT News

OpenNET Presses For Open Access in L.A.

The race to deploy cable modem service has become a bloody contest for last-mile access to U.S. homes.

In Los Angeles, a study of whether to open access to cable networks commissioned by Mayor Richard Riordan never made it to city officials as scheduled on Monday. A meet to officially unveil the study's results was was canceled because three of five board members of the city's Information Technology Agency resigned over the results of the report, which left the agency lacking a quorum to conduct further business.

The six-month study by the ITA urged Los Angeles officials to deny unaffiliated Internet service providers space on cable networks. The resigning board members did so to protest the report that clearly called for open access to cable networks, until the mayor's office directed otherwise.

Poised at the edge of a clear a victory for cable companies like AT&T Corp., Time-Warner Inc., MediaOne and four other regional cable providers, the study in effect provides them with monopolistic segments of the 1.35 million household cable access market.

What's at stake is the ability efficiently provide Internet access 100 times faster than typical modem connections. Evolving broadband services promise two-way communication for shopping, video-on-demand and enhanced Web casting.

But building these new systems cost billions of dollars in running new cable to homes and buying digital set-top boxes and other equipment. Before the large cable companies invest in building the infrastructure, they want to know that they will receive an adequate return on their investment.

The recommendations deal a blow to ISPs that claim denying them access to cable networks will stifle competition and create a losing scenario for consumers. The ISPs say all they want is the ability to level the playing field with open access to cable systems.

The Los Angeles study recommended city officials "allow the market for broadband access services to develop" but make "provisions that are intended to address existing problems."

But it recommended the city monitor broadband development over the next three years "in order to gauge the necessity of imposing open access." The report said open access could be implemented when a competitive market for broadband develops.

A coalition of companies fighting for competition in high-speed cable Internet access Monday called on Los Angeles to protect the public interest by blocking AT&T from grabbing a local cable Internet monopoly.

The OpenNET Coalition represents more than 70 Internet providers nationwide and has been a vocal opponent the decision in Los Angeles.

"The city cannot even hold a meeting to vote on this report because people of conscience would rather quit than vote for a plan that is so blatantly anti-consumer and anti-business," said Greg Simon, the organization's co-executive director.

OpenNET coalition member Bob Adkins of DigiLink Internet Services in Marina del Rey, California, said AT&T's plans will hurt small business and hurt consumers.

"There are more than 5,000 ISPs competing in the United States today and this competition has led to lower prices and more innovative services. An AT&T monopoly threatens all of this."

Adkins noted that prices have fallen dramatically in the competitive Internet marketplace over the last few years. Meanwhile, cable companies that hold monopoly franchises in most American cities have increased cable rates 22 percent over the last three years.

Marc Jacobson of Prodigy Internet said consumer choice will be history.

"People throughout the country should be concerned because if the cable monopoly controls high-speed Internet access it will dictate what you pay, how you get online, and the Web sites you see."

Jacobson quoted the scathing letter of resignation made by Richard Duggan on Friday in which he wrote "the city should not kowtow to the wishes of an industry seeking monopoly power at the expense of all Angelenos."

According to OpenNET sources, AT&T's purchase of TCI and MediaOne means that the company will have full or partial control of more than 60 percent of all cable services into American homes.

"We are reliving the same unforced promises that led to the evolution of the cable monopoly, which resulted in the painful process of re-regulating cable in 1992," said Andrew Jay Schwartzman, president of the Media Access Project based in Los Angeles.

Schwartzman added his group believe the "failure to create and open system not only will gouge consumers, but will also undermine the very character of a free and open Internet."