Embracing Congress' Cable Moves
July 13, 1999
If Rep. Edward Markey (D-MA) has his way, Congress will mandate that cable companies open up their lines to competing Internet service providers that are interested in offering broadband services to cable subscribers. Elected officials in San Francisco, Los Angeles, Portland and other cities agree.
AT&T, however, does not. It owns a big chunk of the nation's cable systems, as well as 40 percent of Excite@Home and it wants cable companies--such as the ones it owns--to be able to control access to customers.
AT&T has some friends in this battle, including a "coalition" of groups and companies calling itself "Hands Off the Internet." If you listen to AT&T and pals' arguments, you'd think they're fighting the good fight against government intrusion upon the Internet. It's almost the same argument used by free speech advocates to oppose government censorship of the Net and the chorus of Internet companies demanding that the Internet remain untaxed. Hands Off the Internet calls itself "a coalition of Net users united in the belief that the Internet's phenomenal growth stems from the ability of entrepreneurs to expand consumer choices and opportunities without worrying about government regulation." They want "consumers, not government," to "choose the method that is best for them."
Not surprisingly, the coalition is funded in part by AT&T. But there are also some well-meaning and relatively independent groups backing AT&T's position, including NetAction, which I often find myself agreeing with.
Even some well-respected journalists, including UpsideToday's very own Tish Williams, have chimed in on AT&T's side of this issue. Yet every time I visit this issue, I can't help but believe that Markey and open-access advocates are trying to craft good public policy.
Not everything government does about the Internet is necessarily bad. In this case, consumers would be better served if cable companies open their pipes up to competitive ISPs. If cable companies won't do it voluntarily, I think it's government's right and responsibility to make them do it.
Remember, cable companies are already regulated monopolies. And, for the most part, there is no such thing as free enterprise when it comes to tearing up streets and laying cable.
I can't get through an evening meal without one or two long distance companies calling me up to offer me cheaper or better long distance service. Likewise, consumers have plenty of choice when it comes to ISPs. But when was the last time someone called you up to ask you to switch cable companies? It can't happen because there is only one cable operator per community.
AT&T and its supporters have tried to turn the tables by arguing that they're on the side of the little guys, fighting against giant ISPs such as AOL. Another Web site on this issue, Frontiers of Freedom, likens AOL to Goliath fighting David. With a market cap of about $138 billion, AOL arguably is a Goliath. Then again, AT&T's whopping $182 billion cap is hardly what I'd call a mom-and-pop business. This is a battle of titan vs. titan, not big guys vs. little.
In this case, titan AOL is on the side of the consumer, asking government regulators to force cable monopolies to give consumers the choice of ISP services. AOL rival @Home, or any other company blessed by AT&T and other cable operators, would still be free to compete with AOL and other ISPs for consumer business. Better yet, lots of other companies, including some real "Davids," would be able to play.
I live in Palo Alto, Calif., where the member-owned Cable Coop contracts with the ISPChannel, a subsidiary of SoftNet (SOFN, with a market cap of $510 million) for its cable-modem service. The Cable Coop Board recently voted to sell our service to AT&T and, if the deal goes through, I worry that we'll be switched over to @Home. @Home might turn out to be a better choice than ISPChannel, but I don't get to choose. Maybe AOL offers better or cheaper service, or maybe we could get superior service from Earthlink or any number of companies that could compete in a truly open marketplace. Maybe I'll start my own ISP and put a switch at the cable head-end so I, too, can offer cable service. It's called free enterprise.
We spent the first 84 years of the 20th century under an AT&T monopoly. Thankfully, that lock ended in 1984 when Judge Harold Greene broke up AT&T and brought some element of choice to telecommunications. Let's not take a giant step backward with cable and the Internet.
Larry Magid is a syndicated computer columnist for the Los Angeles Times. To find out about all of his radio, print and advocacy activities, visit his Larry's World Web site.
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