|Published by NetAction||Issue No. 12||June 7, 2000|
San Francisco's "open access" advocates don't let little things like facts get in the way of their slogans. In a city where Pacific Bell currently controls 90 percent of the consumer broadband market, three cable broadband networks are under development and testing starts this month on a high-speed satellite Internet system, an ad hoc coalition of media-arts organizations and consumer groups are calling AT&T an "Internet monopoly."
The slogan du jour is intended to rally support for San Francisco Supervisor Tom Ammiano's misguided proposal to regulate access to the cable broadband network that AT&T will be deploying in San Francisco over the next four years. Local activists have made AT&T the bogeyman because the company is honoring the exclusive contract with Excite@Home that it acquired when it purchased TCI's cable network. The contract will expire long before AT&T's broadband network is fully operational in San Francisco, and when it does AT&T has publicly committed to negotiating with other Internet content providers.
But that's not good enough for Ammiano's supporters, who have been busy rallying the troops around an "open access" campaign platform riddled with misinformation and distortions. If Ammaino's supporters are to be believed, local regulation of broadband access is going to keep cyberspace safe for God, motherhood, and apple pie.
But the facts say otherwise. Investment in cable broadband have increased competition and consumer choice, not diminished it.
For starters, consumers can get DSL today at competitive prices largely because of the cable industry's investment in broadband. Here in California, Pacific Bell and GTE were charging nearly $90 per month for DSL service until Excite@Home began offering cable broadband for half that price. Consumers might even see a substantial drop in the cost of phone service once competitive local service is widely available over cable.
But that won't happen if San Francisco's Board of Supervisors approves Ammiano's misguided proposal. Proponents of regulated access are unwittingly helping companies like Pacific Bell and GTE retain their existing monopolies. Local phone companies could have been providing broadband Internet access years ago, but they ignored the broadband market until cable began to make inroads. They initiated the "open access" campaign to stall competition while they played catch up. Fortunately, the vast majority of local officials have recognized this and rejected proposals for local access regulation.
Most of what San Francisco's "open access" proponents are saying about cable broadband service is distorted or incorrect. For example:
Proponents of regulated access claim local control of broadband access is necessary because cable will be the preferred broadband technology. But the market is so new that nobody can say for sure which technology consumers will prefer. Right now, only about 5 percent of Internet users subscribe to any broadband service. New technologies are constantly being introduced, and some industry analysts are predicting that DSL households will surpass those with cable Internet access within three years.
Proponents of regulated access claim AT&T wants exclusive use of its network even though the company has publicly committed to negotiating with multiple content providers as soon as it can. The fact is, it's in AT&T's financial interest to lease its network to multiple content providers.
Proponents of regulated access describe Excite@Home as AT&T's "handpicked" content provider, but Excite@Home's contract was negotiated with TCI. AT&T simply acquired it along with the TCI network.
Proponents of regulated access argue that government intervention is necessary to maintain the Internet as a democratic medium. But the Internet as we know it today would not even exist if it weren't for the competitive market. There was nothing democratic about the Internet when it was under government control; access was restricted to the military and academia.
Proponents of regulated access claim Excite@Home restricts uploads to limit competition, but it's actually because of bandwidth limitations associated with the existing technology. AT&T's major local competitor, Pacific Bell, actually exploits cable's technological disadvantage in its "web hog" commercials. Would Pacific Bell be spending money on prime time television commercials if it wasn't concerned about competition?
Local regulation of cable won't benefit consumers, but it will help companies like Pacific Bell and GTE retain monopoly control of the local phone network. It's the existing telephone monopoly that San Franciscans should be worried about.
Broadband Briefings is a free electronic newsletter, published by NetAction to promote policies that encourage rapid and widespread deployment of high-speed Internet access. NetAction is a California-based non-profit organization dedicated to promoting use of the Internet for grassroots citizen action, and to educating the public, policycmakers, and the media about technology policy issues.
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