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The real threat to the high-speed Net

The CEO of the United States Telecom Association says America's cable TV monopolies--not the phone companies--are the ones dominating the high-speed Net market.


The real threat to the high-speed Net

In response to the May 23 column by Rep. John Conyers, "No special favors for telco monopolies":

Rep. John Conyers is correct when he says that there is a monopoly right now in the high-speed Internet access market. Except it isn't controlled by the local phone companies as he insists--it's controlled by America's cable television monopolies. In fact, cable monopolies like AT&T control nearly 75 percent of all high-speed Internet connections, while local phone companies, satellite providers and fixed-wireless companies combined have only the remaining 25 percent of the market.

Despite the demand and the impact on our economy, too many consumers have only one choice for high-speed Internet service or, even worse, no choice at all. As cable companies continue to control more of the market, they will no doubt use their leverage to increase prices and could even decide what Web sites consumers can and can't visit. One needs to look no further than the 33 percent increases in cable TV rates over the last five years--an increase three times the rate of inflation--to see what happens when the cable companies control things.

The news isn't all bleak for consumers, however. Some do have a choice of getting their high-speed Internet service from another provider. In many areas, local phone companies are offering a competing product known as digital subscriber line (DSL). Just like cable modem service, DSL supercharges the Internet.

But local phone companies have had difficulty bringing DSL to the vast majority of their customers because DSL service is being regulated like traditional voice phone service. In fact, while DSL has multiple state and federal regulatory requirements heaped on top of it, competing products like cable modems, satellite or fixed wireless have none at all. These different rules explain why cable companies like AT&T have been able to build their high-speed Internet monopolies--and why consumers are either paying more for high-speed Internet connections or can't get any service at all.

Congress is considering legislation that would put an end to the regulatory disparities between these fundamentally similar technologies. H.R. 1542, the Internet and Broadband Freedom Act of 2001 introduced by Reps. Billy Tauzin and John Dingell, would ensure that the same rules that apply to cable monopolies like AT&T also apply to DSL offered by local phone companies. The bill would ensure that consumers have a real choice, and that no company can have a monopoly on the high-speed Internet. It also would guarantee that small towns and inner cities would have access to high-speed Internet services.

The alternative is to cede control of the most important technological advancement of our age to the cable industry--an industry that has shown in the video market that it will raise rates at twice the rate of inflation while blocking competitors' access to crucial content and allowing consumers to watch only the channels that it chooses for them. That's the model in the cable industry today, and it's the model we can expect them to impose on the high-speed Internet if Congress doesn't allow real competition to take hold.

Gary R. Lytle
Interim president and CEO
United States Telecom Association