Open Access Debate Comes to Virginia

The City of Fairfax, Va., has joined a growing number of municipalities that have exercised their jurisdiction over local cable licensing to mandate open access of their cable networks.

Much of the open access debate has centered around AT&T Corp. (T), assuming Tele-Communications Inc., (TCOMA) cable licenses in Portland, Ore., and Broward County, Fla,, to date.

The Fairfax decision is the first time that Cox Communications Inc. is forced to deal with the open access issue in order to assume operations of a local cable franchise.

By a 4-2 vote late Thursday, the Fairfax City Council placed an open access condition on the transfer of the Media General Inc. cable system to Cox Communications.

Cox Communications acquired Media General Inc. in April for $1.4 billion. Cox bought the right to serve cable access to more than 260,000 customers in Fairfax County and Fredericksburg, Va.

Scott Silverthorne, City of Fairfax councilman, said the decision was made be a group of local authorities on behalf of its citizens.

“By taking this action and supporting open access, we have ensured that our citizens will continue to have the freedom to choose their Internet provider,” Silverthorne said. “We hope other jurisdictions in Virginia follow our lead.”

Rich Bond, openNET Coalition co-director, applauded the Fairfax City Council decision.

“Consumers should have the right to choose whatever Internet Access Provider they want, and cable companies should not be allowed to eliminate that choice by closing their networks to the competition.

The condition made to the cable license transfer requires Cox Communications to provide interconnection services to any ISP that requests transport through their broadband network. The Council further established that Cox must offer the shared access of their cable network at the same rate that the company would offer any other affiliate.

Amy Cohn, Cox director of corporate communications said 90 percent of the Media General franchises have already been approved for transfer, so the company was naturally surprised at the decision in Fairfax.

In a statement released by Cox Communications, executives expressed their disappointed that the City Council’s action will result in Fairfax being denied access to broadband services available through Cox’s other cable systems, and in other areas of Fairfax County.

“Until this illegal action by the City of Fairfax is either rescinded by the City Council or invalidated by the courts or the Federal Communications Commission, Cox will discontinue the deployment of high-speed data services within the City of Fairfax.”

Claus Kroeger, Cox senior vice-president operations, told the company really didn’t get a chance to discuss the open access issue with the Fairfax City Council.

“One of the things that a little frustrating for us, was that when it came time for the transfer of the franchise this sort of quickly unfolded and there was not an opportunity for us to provide any input or comment,” Kroeger said. “So we really don’t think there many not have been as full a dialogue around it as there could have been and that’s why we want some more discussion with them.”

Cox contends that this action by the City of Fairfax is poor public policy and violates Virginia and Federal law. The company also believes that forced access is anti-competitive and technologically infeasible.

Cox plans to initiate further discussions with the City of Fairfax council members and in the hopes that they can convince the council to rescind theirorder.

The company’s planned acquisition of Media General’s cable systems in Northern Virginia will not be affected by this action and will close as scheduled.

Industry analysts agree that nondiscriminatory access to cable networks will continue to be an issue for cable companies attempting to assume cable franchises throughout the U.S. until a national broadband policy is established by the Federal Communications Commission.

The FCC fears that 30,000 different state and local agencies may create a like volume of legislation that would slow the deployment of cable access nationwide.

The federal agency further contends that Digital Subscriber Line services are currently competing with cable access providers to win the hearts and minds of broadband subscribers in the U.S. Any form of federal intervention would only work to dampen the supply of broadband options for American’s demand of high-speed Internet access.

Following the close of pending acquisitions, Cox will serve approximately 6 million customers nationwide, making it the nation’s fifth largest cable company in the U.S. It’s likely that Virginia is not the only state where the company will face mandated open access as a condition to their assuming a local cable franchise.

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