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.”

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