RealTime IT News

AT&T Finally Set To Open Network

EarthLink Inc. executives signed a deal with AT&T Broadband officials Tuesday, allowing the second largest dial-up Internet service provider (ISP) in the U.S. access to Ma Bell's vast cable network.

EarthLink will start cable Internet services through AT&T Broadband in Seattle in mid-summer and roll out EarthLink cable services shortly thereafter, said Garry Betty, EarthLink chief executive officer. Despite extensive open access field trials in Denver, however, service is not expected to begin there any time soon.

AT&T Broadband officials said they would be entering agreements with other ISPs in the coming months, and are currently at different stages in negotiations with other national ISPs.

It's the culmination of a promise AT&T executives made two years ago and comes just days before the Federal Communications Commission (FCC) rules on the fate of the cable industry. On Thursday, regulators will decide whether cable networks are a telecom or information service, a decision that has widespread ramifications in the broadband Internet industry.

EarthLink is now the largest independently owned ISP with access to the largest broadband coverage in the nation. Last year, it signed an access deal with AOL Time Warner , as part of the media giant's merger conditions with the FCC and Federal Trade Commission (FTC). Time Warner Cable owns the second-largest cable network in the U.S., behind AT&T Broadband.

"Reaching a second cable partnership -- particularly with the largest cable provider in the industry -- is a significant milestone in helping us to achieve our broadband expansion goals," said Garry Betty, chief executive officer of EarthLink. "Along with AT&T Broadband, we are pleased to be able to offer these customers a choice of ISPs."

EarthLink also provides digital subscriber line (DSL) service and satellite broadband service to its nationwide base of customers.

AT&T Broadband officials say it will open up service to other parts of the country in 2003.

The FCC has been deliberating since September 2000 over what type of service cable modem services play in the Internet world and have it narrowed down to the two options.

As a telecom service, cable companies would be subject to the same regulations as the telephone companies in providing access to its networks to competitive ISPs and competitive local exchange carriers (CLECs). As an information service, they avoid most of those regulations and will be able to dictate their own terms when including competitors on the cable network.

Bill Schleyer, AT&T Broadband president and chief executive officer, said the announcement has nothing to do with any upcoming regulation debate and is the end result of a relationship started back in 1999.

As far as announcing an agreement two days before the FCC hearings, an agreement that doesn't really go into effect until later this year, "any timing on today's deal is coincidental," he said.

Verizon officials say "coincidental" is too much of a stretch. Signing on one ISP days before the FCC hearing to prove they promote open access, she said, doesn't make AT&T Broadband an open network.

"If they're trying to position themselves (as a company) that's opening up their network, that's ridiculous," said Verizon spokesperson Bobbi Henson. "Maybe if they were opening up their network to the other 599 ISPs that are riding on (Verizon's network), we might say that they are open, but its' not open access."

Industry experts predict the FCC will rule the cable networks an information service, to the obvious chagrin of telephone operators like Verizon Communications , SBC Communications and BellSouth , who are fighting a losing battle with its DSL service in the high-speed Internet race.

Numbers released by the National Cable & Telecommunications Association (NCTA> Monday show 7.2 million cable Internet customers in the U.S., a net add of 875,000 new customers in the past three months. DSL lags far behind, with roughly five million customers.

Asked whether the agreement signals a change in EarthLink's stance on open access, EarthLnk's Betty said no.

"We will continue to advocate choice for ISPs (with cable companies)," he said. "I think (today's announcement) is proof that you don't need government intervention to open up the market."