Congress and state regulators three years ago granted small phone companies access to the Baby Bells' local telephone network lines. Yet competitive players like Northpoint Communications, Rhythms NetConnections, and Covad Communications still provide limited service to the consumer market.
In its fight for cable open access, AOL would be wise to take a lesson from these frustrated firms. They say even though they have the right to access networks, the big telephone companies have erected a series of financial and technical barriers, making it difficult to compete with DSL offerings from local giants like US West and Pacific Bell.
The same kind of legal and technical stalling could come from cable companies like AT&T if they are forced to open their networks to rivals like AOL, some analysts say.
"A cable company that didn't want to share its network could come up with as many potential roadblocks as a telephone company, if not more," said Joe Lazlo, a broadband analyst with Jupiter Communications.
Open access again
America Online and other ISPs have asked the courts, Congress, federal regulators, and local governments to grant them access to cable networks. Today, most cable companies require their Net customers to sign up for an affiliated ISP like Excite@Home or Road Runner before they can use another ISP service.
On the other side of the access fence, small phone companies have had the ability to connect directly to telephone companies' high-speed digital subscriber line (DSL) networks since the passage of the 1996 Telecommunications Act.
Over the past three years, small phone companies have filed a number of lawsuits, claiming the Baby Bells have put up constant legal and technical hurdles to prevent them from offering their own DSL or local voice services.
The results have been little in the way of competition in the consumer market.
"When they're charging $29.95, and our costs start at $40, you can see why it would be difficult for us to enter the consumer market," said Jim Monroe, a spokesman for Northpoint Communications.
A glimpse of the battles that Internet service providers may face on a large scale can be seen in a recent ruling in Portland, Oregon. A federal judge recently ruled in favor of ISPs and legally granted them the right to use AT&T's high-speed cable pipes. AT&T, however, has appealed the Portland ruling, setting up a protracted legal battle.
Meanwhile, AT&T still maintains that it can't technically comply with the order to open its networks, and has said it won't upgrade its cables as long as it is required to allow competing ISPs on its network.
The first, most public round of the open access battle has yet to play itself out, however. Local governments and federal regulators are fighting over who has the ability to control the industry, even as the companies involved are taking their arguments to individual city councils around the country.
The next round in the debate comes on Monday, when the San Francisco Board of Supervisors is scheduled to vote on whether AT&T should open its cable lines in that city.