While Internet service providers are lobbying regulators to force cable companies to open their networks to competitors, a Los Angeles government agency is not sure that’s such a good idea.
Late last week the city’s Information Technology
Agency recommended the city not order cable companies to
unbundle their networks to provide access for unaffiliated Internet providers.
The report will be formally presented to the Los Angeles City
Council on Monday. The ITA plan intends to accelerate deployment of
broadband cable access in L.A. by requiring that all franchised cable
companies serving the city submit a deployment plan. The report also
recommended that cable companies be required to pay franchise fees on all
revenues generated by cable modem services.
The ITA report is a culmination of a six-month extensive fact-finding
process that gives the seven franchised cable companies a big advantage in brining broadband Internet access to market. AT&T, Time Warner Cable, Century Communications, MediaOne, Cox Communications, Falcon Communications, and
Buenavision Telecommunications all operate cable systems in 14 different
franchise areas of Los Angeles.
There are an estimated 602,200 cable customers
in Los Angeles. According to estimates, as many as one-third of those customers
would subscribe to cable Internet access in the next two years.
The ITA study was based on in-depth interviews by the ITA staff with policy
makers at the Federal Communications
Commission, the Department of
Justice and the National
Telecommunications and Information Administration. The process also
included extensive written filings and public hearings.
In addition to the
cable industry, parties participating in the process included America Online, GTE,
SBC and subsidiary Pacific Bell.
The report concludes “given the increase in the number of competing parties
and competing technologies, each of which provides a viable high-speed
on-ramp to the Internet, it does not appear at this time that regulatory
intervention on the magnitude of open access is either prudent or advisable.”
The ITA found that service unbundling was feasible, but not warranted.
“Cable modem services already permit single, click through to unaffiliated
content providers. There is no reason to require cable operators to absorb
any additional charges required to access those providers.”
The city’s report concurred saying, “The agency agrees with the findings of
the FCC regarding the likelihood of competition in the marketplace for
residential broadband Internet access services.”
“The Los Angeles Information Technology Agency has clearly determined that
government regulation of Internet access is unwarranted, and could reduce
competitive choices for consumers,” said Jim Cicconi, AT&T general counsel.
“No other city in the United States has so thoroughly reviewed this issue,
and we believe Los Angeles, like the FCC, has reached the right
conclusion.” The study will be formally reviewed Monday by the Board of
Information Technology Commissioners before being forwarded to the Los
Angeles City Council.
In January Mayor Richard Riordan instructed the ITA to develop a policy and
implementation plan for open, nondiscriminatory access to cable
architecture by Internet service providers, as applied to all cable
franchises in the city.
Mayor Riordan openly supports the franchise system in which cable
television companies are allowed to provide their clients with exclusive
access to broadband Internet services.
The ITA’s findings were not without casualties. The new president of Mayor
Richard Riordan’s Information Technology Commission resigned after one day
in office.
Joyce Emmerson has declined any comment as to the reasons for her
departure. But her resignation is only one of many controversial departures
from the Los Angeles City Hall this past week. The Emmerson departure came only one day after the resignation of her predecessor, Alan Arkatov.
Arkatov allegedly resigned because of the forthcoming vote on the broadband Internet access report. Arkatov and Riordan disagreed on the issue of open access to cable networks. Rather than vote against the man who put him in office, Arkatov resigned. Both Emmerson and Arkatov favored different versions of open access to cable networks by all ISPs.
On Monday, ITA member Richard Duggan also submitted his resignation, throwing the agency into chaos since it’s now impossible to have a quorum.
“I have no other alternative than to resign my commission given my view on open access in contrast to your view which you want the BITC to adopt. Although the term of my commission expires on July 1, 1999, I submit
this resignation to be effective immediately. It is my parting hope that the city makes the right decision in favor of open access.”
Only commissioners Rohit K. Shukla and Janice V. Wood remain on the board
at this time, making a quorum impossible without new appointees.
