AT&T Likely to Change Open-Access Stance

In an about-face from its earlier strategy, AT&T Corp. now appears willing to open its cable lines to other Internet providers.

The New York Times reported late Sunday that AT&T planned to send a letter to federal regulators Monday promising to eventually allow other ISPs access to their cable infrastructure once AT&T’s exclusive contract with [email protected] expires in June 2002.

One ISP mentioned specifically in the letter is MindSpring Enterprises Inc. (MSPG), the nation’s No. 2 Internet provider behind (AOL) who was not mentioned.

While the letter is a non-binding agreement, the mention of another ISP specifically does indicate AT&T is willing to establish pricing terms that its competitors seem willing to live with.

The news comes just days after the National Conference of State Legislatures Committee on Commerce and Communications unanimously voted to table a resolution supporting cable companies’ right to deny
competitors access to their networks.

The group in the past has called for the Federal Communications Commission to mandate open access. For its part, the FCC has so far preferred a hands-off approach saying it was an issue better resolved by the marketplace.

“We’ve decided to allow the cable companies to go ahead with their efforts to deploy broadband access without pre-emptive regulation, even as we closely monitor the marketplace for anti-competitive behavior,” FCC Chairman William Kennard recently wrote on the issue.

Originally supported by AT&T Corp. (T) and other cable companies, the resolution rejected by the state offices was intended to limit their legislative authority over cable networks.

Many local jurisdictions, such as Portland, Ore. and Fairfax, Va., have used their power to award cable television franchises as an attempt to force AT&T to give competitors reasonably-priced access to their cable infrastructure.

The OpenNet Coalition, which represents Internet providers, has also been active on the issue, filing court briefs in various legal disputes in support of ISPs battling cable companies.

Once better known for its long distance and telecommunications service, AT&T has burst on the scene as a major broadband player through its purchase of Tele-Communications Inc. and its pending buy of MediaOne Group.

AT&T’s possible about-face comes as regional telephone companies across the country are aggressively rolling out Digital Subscriber Line service. A recent report by Cahners In-Stat Group predicted 1 million ADSL modems will ship this year.

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