Net Providers Seek Access to Cable Systems
Fearful that a new generation of high-speed cable and wireless networks will relegate them to the towpath of the information highway, America Online Inc. and other Internet service providers are lobbying government and industry officials for access to those networks.
In papers filed last week with the Federal Communications Commission and in talks with AT&T; Corp. and several cable operators, Internet service providers have voiced strong objections to industry efforts to restrict the way cable customers access the Internet over high-speed cable lines.
“There is a serious danger that . . . [cable] owners will exercise their control over local broad-band lines to restrict competition . . . and completely deny use to independent ISPs,” MindSpring Enterprises Inc. Chairman Charles M. Brewer wrote in papers filed with the FCC.
“We think broad-band networks should provide open access just like” current networks, said AOL General Counsel George Vradenburg III.
Although only about 300,000 households now access the Internet via cable TV lines--which enter more than two-thirds of American homes--cable is likely to become the dominant route for high-speed access by consumers because it’s less expensive and more widely available than high-speed telephone lines, which can reach customers located within only 15,000 feet or so of a central telephone office.
What’s more, satellite and wireless communications providers are waiting to jump on the Internet bandwagon following an FCC decision Thursday allowing them to offer high-speed Internet access.
And although federal law requires phone companies to allow their customers to dial up any ISP they choose, cable and wireless operators who aren’t providing phone service over their high speed networks are under no such obligation.
A recently released FCC paper examining high-speed cable Internet access concluded that the agency could require some cable operators to open their networks to other ISPs--a position advanced by MindSpring, AOL and other Internet providers.
But most experts believe the FCC does not have the legal authority to require cable operators to open their networks. And even if the agency did have such authority, they say, it is difficult if not impossible to configure a cable network to provide transport for multiple ISPs.
“The FCC has no authority in this area; they have to go to Congress to act,” said James M. Burger, a Washington technology lawyer, who was formerly Apple Computer Inc.’s senior law director.
“The cable network is a shared bandwidth system that is designed for broadcast transmission,” added Jerry Bennington, senior vice president of Internet technology at Cable Labs, the Louisville, Colo.-based research and development arm of the cable industry. “You simply can’t have 1,000 different ISPs with physical access to the [cable] network. You wouldn’t have room for TV or much Internet access because there wouldn’t be enough bandwidth.”
Concern among ISPs about the disparate regulatory treatment of cable and phone networks has been heightened in recent months by the proposed merger between long-distance giant AT&T; and cable behemoth Tele-Communications Inc. The companies plan to offer high-speed Internet service using TCI’s affiliated @Home Network, which currently reaches more than 50 million homes.
Following a demonstration of the high-speed cable network in Washington last week, AT&T; Worldnet Services President Dan Schulman said: “We want to be able to provide a service that’s tailored to the needs of our own customers. . . . It’s difficult to see how we can accommodate other” ISPs.
That view is echoed by many cable operators.
“Speed is clearly our competitive advantage,” said Ellen East, a spokeswoman for Atlanta-based cable operator Cox Communications Inc. “We spent $4 billion building our high-speed network. If we have to open that network up to AOL or other providers, that would be damaging to our Internet business.”
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Being relegated to the Internet’s slow lanes would spell disaster for AOL, MindSpring and the nation’s 4,900 other ISPs.
During the last half a dozen years, they have earned billions of dollars in subscription fees by convincing consumers to use their personal computers to get electronic mail, surf the World Wide Web and chat with denizens of the global computer network.
More recently, AOL and some other big ISPs have earned millions of dollars in additional revenue by selling online space to advertisers.
But if cable companies come to dominate high-speed Internet access, traditional ISPs would become no different than Internet content providers such as Yahoo Inc., GeoCities and others that simply offer entertainment, information and other content but not physical access to cyberspace, experts say.
Although ISPs could find transport on high-speed networks being deployed by telephone companies, the roll-out of those networks is being slowed by industry and government wrangling over technical standards and service rules.
The FCC has recently proposed freeing phone companies from many regulatory restrictions if they offer high-speed Internet access via a separate subsidiary that would have the incentive to sell high-speed lines on a nondiscriminatory basis to a variety of ISPs.
In the meantime, some ISPs are scrambling to line up cable partners so they won’t be left behind in the coming era of fast Internet access. Earlier this month, for example, MindSpring Enterprises announced that it had reached agreement with cable operator Knology Holdings Inc. to offer Internet access to Knology cable customers in Montgomery, Ala.; Columbus, Ga.; and three smaller cities.
MindSpring President Mike McQuary said the future of independent ISPs such as his may lie with smaller cable operators like Knology because efforts to persuade large cable operators to grant access to multiple ISPs have gone nowhere.
“This is the first deal of its kind that we know of, and we think it could be the model for the industry,” McQuary said.
