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To: ahhaha who wrote (10661)	6/6/1999 10:53:00 PM
From: Rippletum	Read Replies (3) \| Respond to of 29970

An interesting view is that AOL is nothing more than a fancy web page with a message center. It is not an ISP, WCOM is the ISP and the other bell operating companies, AOL is just a reseller of those ISP's. This may not be completely accurate but I think there is much truth to it. It is also true that AOL wants T and Athm to be merely a utility so that AOL can resell its service with the highest of mark-up. Ahaaaa's comment that the advertising revenue is not important is missing the truth, many of the television companies operate on advertising revenues alone, same for newspapers. The advertising based model of operation is true today and many expect that at some point your cable ISP will be free and fully supported by advertising revenues. It is those revenues that T is after and the main reason why Xcit was acquired. It seems clear from the various interpretations of the meaning of the Portland case that it will need to be overturned either by a more thoughtful appellate court, a responsible FCC or local government by local government as they realize the folly of the Portland experiment. The one concern I have is that in one of the Portland articles a Portland politician was quoted as saying that the open access initiative will be considered by more and more entities either at the time of approval of the change of franchise ownership, or most importantly at the time of "RENEWAL". The ongoing threat is truly an impediment to the flow of capital into this cable investment and so the sooner this issue is resolved the better. Hopefully the FCC will timely address this situation due to the nature and importance of timing of the rollout of this competitive medium as opposed to the rollout of DSL. These Portlanders could be spoilers well beyond their boundaries and they should be chastised for their lack of insight into the interworkings of our capitalist market and how it is impacted by governmental (judicial) intervention.

To: ahhaha who wrote (10661)	6/7/1999 1:50:00 AM
From: FR1	Read Replies (1) \| Respond to of 29970

I hope I can clear this up. I can see that I did not articulate what I was thinking very clearly. I was just trying to point out some of the arguments T has. There are good ones. The Portland court considered arguments by ATT and addressed them. Perhaps it is better if I quote from the brief made by the Portland court as much as possible so there is no misunderstanding: mhcrc.org IMHO, there are two main arguments in the brief. 1) Price controls. 2) Equipment and Equipment control. Price controls: ATT/TCI may argue that the City and County cannot actually resolve disputes except by engaging in a prohibited regulation of transmission technology. ……. We presume, by the way, that ATT/TCI will raise no issues as to the defendants' right to require non-discriminatory charges. Those issues have not been raised before and would have no substance, because the provisions of the Cable Act limiting rate regulation apply only to rates charged to end subscribers. Portland is clearly saying that it knows Portland can not regulate rates to end subscribers. What I was trying to point out in my last post is that Portland is directly interfering in rates charged to end subscribers because it is regulating the (wholesale) ISP rates. It is Portland that decides, in dollars and cents, what equal means. Portland clearly states this more than once: existing administrative procedures and franchise provisions will permit the City and County to determine whether a particular proposed arrangement is, or is not, non-discriminatory. Upon written request or its own motion, the MHCRC may commence a formal, quasi-adjudicatory hearing to "enforc[e] any contract or franchise requirement." Portland then goes on to pretend this is a trivial matter: Likewise, financial issues should be relatively simple to resolve, because the @Home contracts provide for a simple revenue split between the cable owner and the Internet service provider. I pointed out to you in my last post that the revenue received by T is anything but a simple split because of its ownership in ATHM. There would be very bitter arguments over what rates are “equal”. This whole issue is brought up again later (at great length because it is the main issue) and a statement is made that summarizes the whole argument for both sides: The Cable Act's protection of cable systems from "regulation as a common carrier" most obviously refers to a package of obligations imposed under state law and under Title II of the Communications Act. TCI/ATT cannot seriously contend that the City has attempted to apply that package of regulations to it. Rather, the essence of ATT/TCI's claim is that any regulation that is akin to a requirement imposed on a common carrier cannot be imposed on it. That argument twists the legislative language in a way that would, among other things, effectively insulate the cable industry from any antitrust remedies. I think they are saying exactly what I have said. T claims that regulation of wholesale prices is akin to regulating retail prices. If you change the wholesale price it has a direct effect on the retail price. Portland can't do that. You be the judge. Plant and Equipment: plaintiffs argued that the open access requirement is expressly preempted by Section 624(e). Section 624(e) prohibits local franchising authorities from "prohibiting, conditioning, or restricting a cable system's use of any type of subscriber equipment or any transmission technology." 47 U.S.C. § 544(e). At oral argument, plaintiffs contended that the open access provisions "condition" a "transmission technology" by requiring "modifications" to the ATT/TCI cable system. The open access condition, however, is not the sort of requirement that is prohibited by Section 624(e). The FCC has recently interpreted that provision. In doing so, it explained that Section 624(e) only applies, for example, to efforts to control "whether a cable operator uses digital or analog transmissions [or to] determine whether its transmission plant is composed of coaxial cable, fiber optic cable or microwave radio facilities ..….. The mere fact that the open access condition may require modifications to plaintiffs' system is not significant. " Again, Portland has clearly stated that it is the arbitrator and Portland will decide what is right when there is a argument. This means that Portland has taken the authority to demand changes to ATT plant and equipment. T argues that Section 624(e) prohibits local franchising authorities from "prohibiting, conditioning, or restricting a cable system's use of any type of subscriber equipment or any transmission technology.". Portland argues the law doesn't really mean the type of restructuring they want to enforce. T says it does. At least we agree that the FCC should say something. Of course everything comes from one statement: Section 636, 47 U.S.C. §556(a)-(b); Section 624(a), 47 U.S.C. §544(a). Section 636 allows local authorities to regulate as long as regulations adopted are not "inconsistent" with the Cable Act. In other words, this whole cable act is so fuzzy let's just step in here and make our own rules. If the FCC doesn't like it, they will say so. ********************** You and I will disagree forever on whether there is more money in delivering content (ads) or being a utility. I think it is all headed towards content. The next time you watch TV ask yourself who is making more money. The utility supplying electricity to your TV or the people broadcasting ads. If it is the utility, then why are taxpayers supporting it. Content is where we are headed and I think most people agree with me.