Broadband Briefings


Published by NetAction Issue No. 7 February 7, 2000
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IN THIS ISSUE:

GTE Doesn't Practice What It Preaches
About Broadband Briefings

GTE Doesn't Practice What It Preaches

Before America Online announced last month that it was buying Time Warner, AOL played the most visible role in OpenNet's advocacy of regulating access to Internet service over cable broadband networks. But GTE has really been the main proponent of "open" access all along. It's not surprising when you consider that GTE lags far behind the Bells in upgrades to its phone network. So anything that delays the deployment of competitive broadband networks works to GTE's advantage since it gives the company time to catch up.

(GTE isn't alone in its failure to prepare for competition. None of the Bells have a very good track record. New Networks Institute has documented in detail the Bells' abysmal track record on broadband deployment. NNI's reports are online at http://www.newnetworks.com/.)

To buy the time it needs to catch up with its broadband competitors, GTE has sent its lobbyists out to lurk around the nation's City Halls, complaining that consumers will have to "pay twice" to get access to a content provider like America Online if they subscribe to AT&T's cable Internet service. But these lobbyists never mention that GTE's own cable modem service is bundled with an ISP, so GTE customers who want access to an alternative ISP or content provider also pay separately for the additional service.

We don't think it's unreasonable to expect consumers to pay two bills for two separate services. Consumers with more than one dial-up Internet account pay separately for each service. If a consumer wanted a dial-up account in addition to a broadband account, that would also require two payments.

What does concern us is GTE's audacious hypocrisy. GTE has been at the forefront of a national crusade - largely unsuccessful - to convince local officials to regulate Internet access. Yet GTE has been pointing its finger at a competitor for offering service under the very same terms its own customers are offered. It's too bad Congress didn't include a provision in the Telecommunications Act of 1996 that required phone companies to practice what they preach.

NetAction has written to the Federal Communications Commission to call this glaring discrepancy to the Commission's attention. A copy of our letter is included below:


February 2, 2000

The Honorable William E. Kennard
Chairman
Federal Communications Commission
455 Twelfth Street, SW
Washington, D.C. 20554

Re: Ex Parte Presentation

Transfer of Control of Licenses from Media One Group, Inc. to AT&T Corp.
CS Docket NO. 99-251

Merger of Bell Atlantic and GTE
CC Docket No. 98-184

Dear Chairman Kennard:

NetAction[1] wishes to call the Commission's attention to a glaring discrepancy between the cable Internet access policy that GTE seeks to impose on its cable competitors and the policy it actually applies to its own cable customers. We believe this discrepancy underscores the hypocrisy of GTE's position on forced access and reinforces questions (already raised by GTE's vigorous resistance to the market-opening mandate of the Telecommunications Act of 1996) about GTE's willingness to comply with any public interest commitments and conditions the Commission might impose in connection with its merger with Bell Atlantic. We respectfully urge you to pursue this matter with GTE at the Public Forum regarding the AT&T/Media One merger scheduled for this Friday, and also in your consideration of the Bell Atlantic/GTE merger.

As the Commission is no doubt aware, GTE has been an ardent proponent of government regulation of the terms under which Internet service providers obtain access to broadband cable networks. In the context of the AT&T/MediaOne merger, GTE has urged the Commission to impose "forced access" as a condition for its approval of the merger.[2] In its Petition to Deny filed in the AT&T/MediaOne merger proceeding, GTE specifically criticizes AT&T and MediaOne for purportedly preventing its cable broadband customers from reaching "the ISP of their choice," and urges the Commission to mandate access as a condition of approval of the merger.[3]

Moreover, in its antitrust suit brought against the cable systems acquired by AT&T from TCI, GTE excoriates cable operators for allegedly requiring customers who wish to use an alternate ISP service to "pay twice -- once for the package that includes the unwanted At Home ISP service, and a second time for the service provided by the ISP of their choosing . . ."[4] GTE expressly characterizes this practice as "an unlawful tie."[5]

Given GTE's vociferous support of forced access for cable operators and its view that AT&T's "bundling of . . . high-speed data transport services with . . . ISP service is an unlawful tie," it may surprise you to learn that GTE's own customers are subject to these very same conditions. GTE provides cable television service and WorldWind broadband Internet access in the Ventura County, California area. GTE cable subscribers pay $39.95 per month for the WorldWind broadband service, which includes Internet access via GTE.NET, the company's own Internet Service Provider. If GTE's customers prefer to access the Internet via another ISP, they must pay additional charges, as explained on the company's web site:

Q. What if I already have Internet access through a commercial provider or through another Internet Service Provider?

A. GTE WorldWind service includes unlimited monthly access to the Internet via GTE.NET, GTE's own Internet Service Provider, plus a full-featured edition of Netscape Navigator or Microsoft Internet Explorer. A commercial provider or another Internet Service Provider can be accessed via GTE's high-speed cable modem service. However, you will have to pay their current established monthly charge.[6]

In short, as an operator of cable systems in California, GTE engages in the exact same business practice which it decries as unfair, discriminatory, contrary to the public interest and "unlawful."

GTE's hypocritical refusal to practice what it preaches underscores NetAction's view that the company's position is a ruse intended to slow the deployment of broadband services by its cable competitors and stifle the emergence of competitive local phone service. Upgraded cable networks that have the capability of delivering video, data, and IP telephony represent the best hope for meaningful competition. For seniors and low incomes consumers, small businesses, and others whose local telephone service rates have gone through the roof in recent years, cable may be a welcome alternative. In California, cable operators' investments in upgraded networks are already yielding new competitive choices for consumers and spurring the local monopoly phone companies to make their own investments and restrain price increases. Once broadband cable is widely deployed, consumers will finally have choice in all their communication services.

NetAction believes that the vigor with which GTE has advocated forced access is an indication of how much competition they anticipate from upgraded cable networks. Serious competition may not be in GTE's parochial interest, but it most certainly is in the public interest. GTE's fervent efforts to impose forced access on cable operators is nothing more than an attempt to use regulatory and legal proceedings to tie the hands of its most viable and potent competitors.

NetAction strongly urges you and the other Commissioners to question GTE about the yawning gap between the policy it has been pushing the FCC to adopt and the policy it imposes on its customers. In light of GTE's assertion to a Federal court that the bundling of broadband Internet transmission capacity with an affiliated ISP service constitutes an "unlawful tie," we believe that this issue should be raised in the context of GTE's merger with Bell Atlantic. Indeed, not only is GTE engaging in conduct which it has repeatedly characterized to the FCC as being unfair and contrary to the public interest, but it also is engaging in conduct which it has characterized in Federal court as being "illegal" and "unlawful."[7] This gap between GTE's words and its deeds should raise concerns about the steadfastness with which it will abide by any commitments it makes -- or requirements imposed upon it -- as a condition of obtaining approval of its merger with Bell Atlantic.

We appreciate your attention to the issues raised in this letter. In accordance with the Commission's rules, two copies of this letter are being filed with the Secretary's office.

Sincerely,

Audrie Krause
Executive Director

  1. NetAction is a national nonprofit organization based in San Francisco, California that is dedicated to promoting use of the Internet for effective grassroots citizen action campaigns and to educating the public, policy makers, and the media about technology policy issues.
  2. See In the Matter of Application for Consent to the Transfer of Control of Licenses Media One Group, Inc., Transferor to AT&T Corp., Transferee, CS Docket No. 99-251, Petition of GTE Service Corporation, GTE Internetworking, and GTE Media Ventures, Inc. to Deny Application, or in the Alternative, to Condition the Merger on Open Access Requirements, August 23, 1999.
  3. Id. at 49, 58.
  4. GTE Internetworking Incorporated and GTE Intelligent Network Services Incorporated v. Telecommunication, Inc., Comcast Corporation and At Home Corporation, Case No. ___, W.D. Pa., complaint filed October 26, 1999, at 2 ("GTE Antitrust Complaint") (attached as Exhibit 1).
  5. Id. at 3.
  6. See "GTE WorldWind: Cable Modem Frequently Asked Questions," (visited Feb. 1, 2000) and "Open Access Key Facts, Consumers Will Pay Twice to Preserve Their Choice," (visited Feb. 1, 2000) (attached as Exhibit 2).
  7. See GTE Antitrust Complaint at 2-3.

About Broadband Briefings

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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