New Internet Fight All About Access to Wiring

The battle over the future of the Internet came home this week to Los Angeles, the city where it all began.

It was “29 years ago almost to the day,” noted Alan Arkatov, president of the city’s Information Technology Agency, that the first letter, a single L, was typed at UCLA and received at Stanford over a computer network that grew to become the worldwide Internet.

It was one of the few statements that wasn’t challenged at the agency’s contentious public hearing on one of the most volatile of Internet topics--high speed access via cable TV lines.

In one ideological corner were cable operators, who have announced intentions to provide Internet service in package deals with their TV offerings. In the other, were current Internet service providers, the vast majority of which use telephone lines to connect home users with their services.

The current providers were demanding that cable operators be forced to allow them also to use the cable lines, which are regulated by the agency.

The thicker cable TV lines are preferred, because data-rich online features--such as graphics, sound bites and video clips--can flow through them far faster, eliminating much of the waiting time home users now endure.

Cable delivery of the Internet on a large-cable system has not been fully tested, but its prospect is so alluring--and potentially lucrative--that skirmishes have already begun over who gets to use the lines and on what terms.

Locally, the matter is the major point of controversy over AT&T;’s request to the city agency that it be allowed to take over ownership of a 94,000-subscriber cable TV system in the east San Fernando Valley.

That system is currently owned by nationwide cable operator Tele-Communications Inc., better known as TCI. AT&T; needs to transfer the ownership of all TCI systems if it is to fulfill its intention, announced earlier this year, to absorb the cable operator in a $48-billion merger.

The transfer request has provided Internet services the opportunity to persuade the agency to ensure they will not be shut out of the cable lines operated by this system, as well as others in the L.A. area.

This has placed L.A., once again, in the role of Internet pioneer.

“We are working in relatively uncharted territory,” said commissioner Rohit Shulka, as he looked out over the crowd of about 50 people. Normally, Shulka noted, the agency toils “in relative obscurity.”

Representing AT&T; was attorney Michael Olsen, who argued that a company taking a financial risk by plunging into new technologies should also get the chance to reap its benefits. He noted that TCI has spent millions to upgrade its lines to handle Internet data, and should not be forced to open its lines to others.

“Open access,” Olsen said sarcastically, “is the money I make off of your hard work and investment.”

TCI’s representative, Richard Patch, questioned the agency’s right to impose regulations on cable Internet delivery “because it’s not a television service.”

Offering a supporting argument was David Auger of the Time-Warner West Valley cable operation, which is also being upgraded to handle Internet services.

He told the agency it was too early in the technology’s development to impose regulations. “The business doesn’t know what the rate of return on the investment will be,” he said.

Internet service providers countered that cable providers would shut them out of the market by providing TV and Internet services to customers on a one-price, package deal basis. Even people quite satisfied with their current Internet service would be unlikely to continue to pay for it if they were automatically getting another Internet service with their TV programming.

“What this means to the consumer is ‘no choice,’ ” said Bob Atkins, president of DigiLink Internet Services of Marina del Rey.

Attorney George Mihlsten, representing America OnLine, the largest Internet service provider, said AT&T; was advocating a “closed, discriminatory system.” He argued that open access would provide a level playing field.

“This is about open markets. This is about competition,” he said.

The only elected official to speak at the meeting, state Sen.-elect Richard Alarcon, agreed. He urged the agency to come up with a solution that “will not increase the cost for someone who wants to use another Internet service.”

There was also support from local residents. Michael Trujillo, who described himself as a “cash-strapped” college student, said his family was “comfortable with AOL,” and did not want to be forced to pay an additional fee to use it.

Accountant Bruce Bialosky cited numerous service problems he has had with cable operators and said it would be “an injustice” to trust them with Internet delivery.

But some residents asked that no obstacles be placed in the way of AT&T;’s plans. “These guys seem to be able to make it happen,” argued songwriter and graphic designer Morton Lee, who said his livelihood depended on the Internet. “Let’s let them make it happen.”

Businessman John Shulman said, “I just want to see it move forward,” and he urged commissioners to adopt a “hands-off” policy.

The agency will not vote on the transfer of ownership until Jan. 11. Its recommendation is subject to approval by the City Council.

In an interview Friday, Arkatov would not say how he believed the agency would resolve the matter. But he indicated there probably would be some regulations.

“We want to give the people options,” he said. “We don’t want people to be in a limited, closed-end environment.”

The agency certainly doesn’t want the matter to end in the same manner as the first Internet experiment. The first word to be transmitted was supposed to be “LOGIN.” But after the G, UCLA racked up another Internet first--the system crashed.