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Oregon official champions cable access fight

David Olson, Portland's cable director since 1983, is the catalyst for one of the most controversial telecommunications policy fights in years.

PORTLAND, Oregon--The start of the cable access controversy can be traced to a man who claims the "Force" is with him in his high-speed cable fight.

David Olson, Portland's cable director since 1983, was the catalyst for one of the most controversial telecommunications policy issues in years. At stake, analysts and industry observers say, is the future of cable access and the nation's high-speed Internet.

see related story: The fate of fast Net
access AT&T appealed a ruling last year that essentially gave Portland officials the authority to require the telecommunications giant to open its high-speed data networks to competing Internet service providers.

When the 9th U.S. Circuit Court of Appeals convened here yesterday to hear oral arguments, Olson, 47, made quite an entrance. To compliment his black, doubled-breasted suit and black tennis shoes--and perhaps to set the mood of the occasion--Olson sported a bright-blue tie emblazoned with the image of the infamous Darth Vader, the lord of the "dark side" in the movie Star Wars.

"I like to be reminded that there is a light side and a dark side to this issue," Olson said. "I like to think the Force is with me on my side."

Although a seemingly unassuming man, Olson and his colleagues didn't back down from their stance on open access when AT&T appealed their favorable court decision, asserting that the city doesn't have the jurisdiction to impose cable access mandates. Yet cities across the nation followed Portland's lead by establishing their own cable access regulations.

Following yesterday's historic hearing, Olson discussed cable access and his role in challenging AT&T in an interview with CNET News.com.

NEWS.COM: Did you have any idea a year ago that cable access would become a major national communications policy issue?
Babes in the woods as we are, it never occurred to us that this would be such a big deal. So to see this explode the way it has is kind of amazing to us, because we talked about it, worked on it, and discussed it all by our own dumb little selves. Nobody was paying us, or pushing us, or lobbying us. It was just common sense, if you approach this from the consumer level. What was so surprising to us is that anybody had a problem with this, since it seemed so obvious.

These two court cases have been handled by city attorneys, and there is the possibility this case will go to the Supreme Court. To what degree were Portland-area taxpayers' financial interests taken into account when adopting this policy?
The fact is, when we made the decision we knew there would be litigation. AT&T's only answer to the question on the merits, was 'We will sue you,' which does nothing to good red-blooded Oregonians but to infuriate them. They probably helped speed passage [of the issue] with that attitude. We expected there to be an initial round of litigation; yet nothing of this magnitude.

We have a $200,000 legal bill. We knew the moment we looked at a telecom issue it was six-figure litigation. Portland is a large enough city with about a $900,000 reserve fund every year for emergencies. Sure, we'd rather spend the money on something else. But everyone felt so strongly about it that we said, 'Sometimes you've got to do what you've got to do.'

Many local governments are starved for tax revenue. Is open access a necessary policy for some local governments to garner additional revenue from multiple ISPs? Was that a consideration in Portland?
No, in fact, odds are--or at least an argument can be made--that we will slightly reduce our franchise fee receipts under open access. Because we would make more money from our franchise fees by charging 5 percent of full retail Internet access.

High speed pipe dreams? We talked about franchise fees. We depend on them like a lot of cities. The fact is that the pie gets bigger. So in effect you have ISPs that were never there before. I would argue that at best it was a wash, maybe we'd lose a little. Franchise fees were never a driver. Some jurisdictions I know thought, 'My God, we're going to lose money, we can't support open access.' I think that's unfortunate, because I think it needs to be treated as a pure policy issue.

Would open access, if it were to become national policy, facilitate or stave off consolidation in the ISP market?
I haven't seen anything hold off consolidation in any industry, frankly, if you look at industries over the last 20 years. Particularly post-deregulation industries: airlines, trucks, trains, boats, planes. They all consolidate because of all of the issues we all know about. It's a global marketplace. I don't think open access one way or another is going to forestall, hasten, decelerate, or accelerate concentration that would happen among ISPs.

The cable industry is unique as it is regulated in large part by local franchise authorities. In your opinion, would the devolution of regulatory power to local bodies be appropriate in any way within the telecommunications, Internet, or computer industries?
I don't think any of these big sectors should be subject to an extensive scheme of local or state regulation in its classical sense. The traditional sense being filing tariffs, doing rates, looking at hierarchical structures, and otherwise really getting into the plumbing, pipes, and nodes inside a company.

I think in fact there is a role, and will be an increasing role, for local and state regulation, but the role is not the classic utility regulation. The role is balance in the marketplace. To make sure people are not prevented from entering, and to make sure people are not competing under unfair circumstances.