RealTime IT News

AT&T Broadband's $20 Million Smokescreen

As AT&T Broadband conducts the first of its cable feasibility tests in Boulder, Colo., Wednesday, open access advocates are calling for the government to quickly enforce a national framework for competing Internet service providers.

Calling the $20 million trials in Colorado a smokescreen, critics take umbrage to the stranglehold cable network owners have on broadband Internet access and the delaying tactics employed to provide open access for competitive services.

Dr. Mark Cooper, Consumer Federation of America director of research, said it's proof AT&T is using these trials as a delaying tactic to grab customers while it can.

"All these tests do is establish how long they can hold off before they are forced to open up the network to competition," Cooper said. "The feasibility of open access has been proven for a couple of years now, up in Canada. The $20 million they're spending on these 'tests' is a good investment when you look at the all customers they have exclusive access to. By the time the networks are opened up, they will have most of the first generation of broadband Internet users in their pocket."

AT&T Broadband has a vested interest in cable ISP Road Runner, a joint venture between AT&T, Time Warner Inc., Microsoft Corp. and Compaq Computer Corp. AT&T also has a 74 percent voting interest in cable Internet provider Excite@Home.

In May, the Department of Justice gave AT&T until Dec. 31, 2001, to divest it's ownership in the popular Road Runner service. AT&T Broadband is taking a very active role in AT&T Road Runner until that date, and between it and AT&T@Home, has a hold on more than 3 million broadband customers.

The Boulder trials, which gives 500 customers a choice between eight different ISPs, is being showcased as AT&T's commitment to open access. Participating in the trials are EarthLink, Juno, WorldNet, RMI.net, Excite@Home, Winfire, Flashcom and Friendly Works.

Sarah Duisik, AT&T Broadband spokesperson, said AT&T Broadband Choice is being conducted to determine the technical and operational difficulties involved with including seven other ISPs on its network.

"Included are providers that represent the diverse businesses that will operate on our broadband network," Duisik said. "They come in different sizes, from the regional to nationwide providers and those that use different content. We've got a whole potpourri included, to determine if we can provide choice. We will be installing the first customers today and the true measure of the trial's success is how favorable our customer experience is."

She said the trials would last another six months and that at the end of 2001 another trial will be held in Massachusetts.

Duisik stated AT&T Broadband intends to honor its exclusivity contract with Excite@Home for the length of the contract, which coincidentally ends at the same time as the second trials, in 2002.

The openNET Coalition, comprised of nearly 1,000 ISPs and Internet-related companies, points to a Oct. 19 report by the General Accounting Office, which states that of the 12 percent of U.S. broadband Internet users, nine percent are using cable as their platform.

Rich Bond, openNET Coalition co-director, said the lack of choice will only get worse for consumers unless the government takes action now.

"GAO reported that on average, less frequent users of the Internet spend 43 percent of their Internet time on their ISP's home page," Bond said. "Given this data, the negative ramifications of closed access to cable broadband networks are dramatic and far-reaching. In short, this report demonstrates that the very nature of the Internet and the structure that supports innovation and entrepreneurship lies at the heart of the open access debate.

"We renew openNET's call for the (Federal Communications Commission) to quickly est