The race to deploy cable modem service has become a bloody contest for
last-mile access to U.S. homes.
In Los Angeles, a study of whether to open access to cable networks
commissioned by Mayor Richard Riordan never made it to city officials as
scheduled on Monday. A meeting to officially unveil the study’s results was was canceled because three of five board members
of the city’s Information Technology Agency resigned over the results of the report, which left the agency lacking a
quorum to conduct further business.
The six-month study by the ITA urged
Los Angeles officials to deny unaffiliated Internet service providers space
on cable networks. The resigning board members did so to protest the report
that clearly called for open access to cable networks, until the mayor’s
office directed otherwise.
Poised at the edge of a clear a victory for cable companies like AT&T Corp., Time-Warner Inc., MediaOne and four other regional cable
providers, the study in effect provides them with monopolistic segments
of the 1.35 million household cable access market.
What’s at stake is the ability efficiently provide Internet access 100
times faster than typical modem connections. Evolving broadband services
promise two-way communication for shopping, video-on-demand and enhanced
But building these new systems cost billions of dollars in running new
cable to homes and buying digital set-top boxes and other equipment. Before the large
cable companies invest in building the infrastructure, they want to know
that they will receive an adequate return on their investment.
The recommendations deal a blow to ISPs that claim denying them access to
cable networks will stifle competition and create a losing scenario for
consumers. The ISPs say all they want is the ability to level the playing field with
open access to cable systems.
The Los Angeles study recommended city officials “allow the market for
broadband access services to develop” but make “provisions that are
intended to address existing problems.”
But it recommended the city monitor broadband development over the next
three years “in order to gauge the necessity of imposing open access.” The report said open access could be implemented when a competitive market for broadband develops.
A coalition of companies fighting for competition in high-speed
cable Internet access Monday called on Los Angeles to protect
the public interest by blocking AT&T from grabbing a local cable Internet monopoly.
The OpenNET Coalition represents
more than 70 Internet providers nationwide and has been a vocal
opponent the decision in Los Angeles.
“The city cannot even hold a meeting to vote on this report because people
of conscience would rather quit than vote for a plan that is so blatantly
anti-consumer and anti-business,” said Greg Simon, the organization’s co-executive director.
OpenNET coalition member Bob Adkins of DigiLink Internet Services in Marina
del Rey, California, said AT&T’s plans will hurt small business and hurt
“There are more than 5,000 ISPs competing in the United States
today and this competition has led to lower prices and more innovative
services. An AT&T monopoly threatens all of this.”
Adkins noted that prices have fallen dramatically in the competitive
Internet marketplace over the last few years. Meanwhile, cable companies
that hold monopoly franchises in most American cities have increased cable
rates 22 percent over the last three years.
Marc Jacobson of Prodigy Internet
said consumer choice will be history.
“People throughout the
country should be concerned because if the cable monopoly controls
high-speed Internet access it will dictate what you pay, how you get
online, and the Web sites you see.”
Jacobson quoted the scathing letter of resignation made by Richard Duggan
on Friday in which he wrote “the city should not kowtow to the wishes of an
industry seeking monopoly power at the expense of all Angelenos.”
According to OpenNET sources, AT&T’s purchase of TCI and MediaOne means that the company will
have full or partial control of more than 60 percent of all cable services
into American homes.
“We are reliving the same unforced promises that led to the evolution of
the cable monopoly, which resulted in the painful process of re-regulating
cable in 1992,” said Andrew Jay Schwartzman, president of the Media Access Project based in Los Angeles.
Schwartzman added his group believe the “failure to create and
open system not only will gouge consumers, but will also undermine the very character of a free and open Internet.”