AT&T Corp. Monday outlined its commitment to provide the online community with a choice of Internet Service Providers for high-speed Internet access over the company’s broadband cable and fixed wireless systems.
In a radical departure from recent court cases challenging local authority to mandate open access to their cable networks, AT&T’s (T) fixed wireless systems will be able to serve-up broadband access the ISP of their choice as, soon as the systems are deployed beginning next year.
In order to provide consumers with their choice of ISP, AT&T will not extend its exclusivity contract with cable access provider Excite@Home. The exclusivity contract is set to expire in mid-2002.
Excite@Home (ATHM) issued a statement in support of AT&T’s move to share access to their cable networks with select Internet service providers.
The cable access provider declared that the competitive marketplace, not government intervention, is the best way to provide consumers with a wide variety of choices for high-speed Internet services.
“In a marketplace that is highly competitive and spurring investments, the terms by which cable companies provide their facilities to other businesses should be resolved in private business negotiations, not through government regulation,” the statement read.
Excite@Home added that they intend to have a long and mutually beneficial relationship with all our cable partners even after their exclusivity contract with AT&T expires.
“We look forward to developing new business relationships ourselves in the post exclusive period with both existing and new partners that will expand our markets further.”
Excite@Home intends to work with their cable partners to establish terms of carriage for the AT&T post-exclusive period. The leading cable access provider also expects to be an integral part of supplying Internet transport services to other ISPs as they work to expanding their broadband services to other high-speed data platforms.
AT&T spelled out details of its commitment to open access to their cable networks in a letter sent Monday to FCC Chairman William Kennard. The letter was co-signed by AT&T General Counsel James W. Cicconi and Mindspring Vice President David N. Baker. MindSpring (MSPG) is set to become one of the first new AT&T Internet transport service partners.
Dave Baker, MindSpring vice president of legal and regulatory affairs, said
the deal with AT&T was an important first step in the right direction of
guaranteeing consumers a choice of high-speed cable access providers.
“We are encouraged by AT&T’s efforts. But consumers should enjoy the
benefits of open access sooner rather than later,” Baker said.
Baker added that consumers should not have to wait for exclusive
arrangements between AT&T and its affiliates to expire years from now in
order to open access to cable networks.
“We hope that federal policy makers will grasp the opportunity that this
initial agreement creates because only clear and unambiguous federal policy
can make the promise of this agreement real, enforceable, and timely.
Otherwise today’s agreement may not benefit consumers for years to come.”
Charles Brewer, MindSpring chairman and chief executive officer, said it’s
not a matter of obtaining open access anymore, it’s a matter of deploying it.
“Hopefully now the discussion about open access can shift from whether or
not to have it to exactly how and when to implement it, and that certainly
is a step in the right direction” Brewer said.
“Open access to telecommunicat
ions networks has driven the growth of the
Internet.” Brewer added. “It must be preserved in the broadband networks of
the future, or the vibrant and innovative character of the Internet as we
know it will be destroyed.”
C. Michael Armstrong, AT&T chairman and chief executive officer, said the move to open access to their cable networks was just part of their commitment to consumers.
“We have said repeatedly that we are committed to provide maximum choice to our customers along with the world-class service they associate with AT&T, and that’s just what we’re doing,” Armstrong said.
“Our customers will get a choice of ISPs for high-speed access to the Internet. That will happen next year on our fixed wireless systems. We’ll also provide a choice of ISPs on our cable systems when technical issues are resolved and once our current exclusivity contract with Excite@Home expires,” Armstrong added.
AT&T and Excite@Home executives have clashed over content and deployment of high-speed cable services. Last month, AT&T accused Excite@Home of dropping the ball in the high-stakes broadband marketplace and demanded the company improve performance to meet consumer expectations.
Armstrong reiterated that letting the exclusive contract with Excite@Home expires did not mean that the companies would not consider alternative deals.
“I also want to make clear that we’ve begun discussions with a number of ISPs and portals about offering their services on our fixed wireless and cable systems, and we’re open to discussions with others as well,” Armstrong said. “We look forward to successfully concluding those discussions. In addition, I want to reiterate that, though we will not extend the current exclusive contract with Excite@Home, we are very pleased with that partnership and look forward to a long-term relationship.”
The letter to FCC Chairman Kennard states that AT&T will provide consumers with a choice of selecting their ISP without having to subscribe to any other service. That access will be full access, in that AT&T has pledged not to prioritize any partner’s Web content on the Internet.
AT&T also said that any commercial arrangements with ISPs for the use of AT&T’s Internet transport services will allow those companies the opportunity to brand their services, market them directly to consumers and to bill directly for those services the ISP itself provides.
Dave Baker, MindSpring vice president of legal and regulatory affairs, said the deal with AT&T was an important first step in the right direction of guaranteeing consumers a choice of high-speed cable access providers.
“We are encouraged by AT&T’s efforts. But consumers should enjoy the benefits of open access sooner rather than later,” Baker said.
Baker added that consumers should not have to wait for exclusive arrangements between AT&T and its affiliates to expire years from now in order to open access to cable networks.
“We hope that federal policy makers will grasp the opportunity that this initial agreement creates because only clear and unambiguous federal policy can make the promise of this agreement real, enforceable, and timely. Otherwise today’s agreement may not benefit consumers for years to come.”
Charles Brewer, MindSpring chairman and chief executive officer, said it’s not a matter of obtaining open access anymore, it’s a matter of deploying it.
“Hopefully now the discussion about open access can shift from whether or
not to have it to exactly how and when to implement it, and that certainly
is a step in the right direction” Brewer said.
“Open access to telecommunications networks has driven the growth of the Internet.” Brewer added. “It must be preserved in the broadband networks of the future, or the vibrant and innovative character of the Internet as we know it will be destroyed.”
One of the strongest critics of AT&T’s current exclusive arrangement,
Media Access Project President Andrew Schwartzman. He had participated in the talks that led up to the MindSpring-AT&T agreement but withdrew because AT&T refused to make necessary commitments.
Schwartzman said that the AT&T letter being sent to the FCC by three of the six members of the group is not open access.
“They are passing off as open access something that does not address the core issues about content control and competition,” said Schwartzman. “It’s much less than meets the eye.”
Schwartzman said AT&T’s voluntary undertaking as an important step in the right direction to open cable competition, but that the telecommunications giant is unwilling to discuss several criteria which are essential to insuring that cable operators will not abuse their monopoly position to favor certain content or business partners.
Schwartzman recommended that the FCC make AT&T’s compliance with their open access undertakings a condition of any transfer of ownership MediaOne Goup, Inc. cable systems to AT&T, because the company has been unwilling to disclose when MediaOne’s (UMG) exclusivity contract with the RoadRunner would expire.
“The Commission should not allow a new monopoly to be created as it watchfully waits for competition,” Schwartzman said.
Schwartzman also noted that in opening access to their cable networks, AT&T has abandoned its claims that it technologically impossible to share access with multiple ISP’s.
Greg Simon, OpenNET Coalition co-director, said Internet service providers plan to continue pushing regulators to require open access to cable systems because the agreement with AT&T leaves out all other cable companies and delays competition for two years.
“Now we won’t have to spend so much time arguing that open access is good for investment, good for the Internet and good for consumers, because AT&T just admitted it,” Simon said. MindSpring will remain in the lobbying campaign, he added.
Scott Cleland, Legg Mason Precursor Group telecommunications analyst, cautioned tough issues remained to be negotiated.
“The issue is beginning to work on Internet time, which means its going to happen faster, rather than slower,” Cleland said.
He added that if there are any real deals happening, its going to come from government pressure, namely the FCC, Department of Justice, Federal Trade Commission, Congress and other localities.
