Agency urges L.A. deny Net providers
space on cable
By Bob Tourtellotte
LOS ANGELES, June 18 (Reuters) - A long-awaited study by a city agency Friday urged Los Angeles officials to deny Internet providers space on cable TV systems in what is rapidly becoming a contest for access to U.S. homes.
The study, by the city's Information Technology Agency, signals a clear victory to giant cable TV companies like AT&T Corp. (NYSE:T - news) and Time-Warner Inc. (NYSE:TWX - news) which have argued they need sole access to customers to quickly deploy new cable ''broadband'' systems to their customers.
These new systems promise two-way communication over the Internet for services like shopping, video-on-demand and, very simply, faster and more efficient Web surfing versus slow, plain old telephone lines. And the cable companies see billions in new revenues from providing the services.
But building these new systems also costs billions of dollars in new cable to homes, digital set-top boxes and other equipment, and the cable companies want to know that they will receive an adequate return on their investment.
''This is good news for us in terms of the study because it allows us to continue deploying these new services,'' said AT&T spokesman James Peterson. ''And it's important to note that we haven't seen any city look so closely at this issue.''
It deals a blow to Internet service providers (ISPs), however which claim that denying them access helps stifle competition and could create an unfair playing field in the future if cable systems
eventually do open to them.
''We're talking about the last link to homes, and whether that link is a telephone line or cable line or other means, it's the way we connect to our customers,'' said Bob Atkins, president of Los Angeles-based DigiLink Inc. Internet Services and a member of Internet advocate group, OpenNet Coalition.
A company like DigiLink provides enhanced services like more bandwidth to help speed access times, fixed addresses that add security and advanced e-mail to aid small businesses.
Atkins argued that barring companies like his from cable systems would deny users advanced services.
Further, he claimed that Internet subscribers with access from cable, over time, would become entrenched and would not likely switch to another access provider. In the end, companies like his would be driven to other businesses, or out of work altogether, leaving cable companies in a monopoly position.
The Los Angeles study, a culmination of six months of work by Information Technology Agency, recommended city officials ''allow the market for broadband access services to develop'' but make''provisions that are intended to address existing problems.''
One of those problems is that the broadband systems don't even exist throughout Los Angeles so to help speed their deployment, the agency recommended ''the city should not order cable companies to open their cable modem platforms to unaffiliated Internet Service Providers,'' the report said.
But it recommended the city monitor broadband development over the next three years ''in order to gauge the necessity of imposing open access.'' It added that open access could be implemented when a competitive market for broadband develops.
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