Broadband moves to political forefront with AOL Time Warner

By requiring America Online and Time Warner to open their cable network to competing Internet service providers as a condition of their merger approval Thursday, the so-called open-access issue has new life. There is an increased focus on how the issue is being addressed at the Federal Communications Commission and on Capitol Hill.

The open-access conditions imposed on AOL Time Warner are unique to that company, imposed in a high-profile merger review. Partisans on both sides of the debate agree that the open-access fight will be tougher when all broadband providers are possible subjects of regulation.

A Bush FCC is expected to be more market-focused than before, "more hands-off, letting competition dictate as opposed to over-regulation," said Arthur Andersen analyst Carl Geppert.

But there's no clear consensus this change will slow the pressure for open access, despite the deregulatory leanings of President-elect George W. Bush.

Cable operators tend to offer their high-speed Internet customers only one ISP: the one affiliated with the cable company. Open-access advocates have fought for three years to give consumers a choice and are calling on the federal government to force cable operators to allow other ISPs to operate on their networks. This is considered critical in areas where cable may be the only high-speed Internet option, and the FCC is conducting an inquiry into the issue.

For the first time in decades the Republican Party will control the White House and both houses of Congress. The FCC also will have a Republican chairman and a majority of commissioner votes. Speculation continues that FCC commissioner Michael Powell, son of Colin Powell, will be chairman, although Texas Public Utilities Commission chairman Pat Wood also remains a strong candidate.

One possibility is that a Bush-appointed FCC might be more reticent to act. Still, the growing pressure on access could force a Bush FCC to begin a process for writing open-access rules, some said.

"It wouldn't surprise me at all if they did open a proceeding," Geppert said, if the FCC is slow to address the problem.

But others are more skeptical. "I'm not sure the (FCC and FTC) under a Bush administration are going to be inclined" to pass new rules, said Vince Sampson, vice president at the Association for Competitive Technology. "They may want to see what Congress does first."

Rep. Bob Goodlatte, R-Va., said he hopes Bush's appointees at the FCC will be "people who move toward a more deregulatory approach, which is what was intended by the Telecom Act."

"We've got to encourage deployment of broadband, and the best way to do that is for government to get out of the way," he said, such as with the FCC's regulation of data transport by Baby Bells.

The broadband battle
Along with the FCC's review of the AOL-Time Warner merger and its separate open-access inquiry, open-access legislation will be coming in Congress.

The FTC condition on AOL Time Warner "is by itself certainly not sufficient," Goodlatte said. He and his colleague Rep. Rick Boucher , D-Va., will reintroduce their bill requiring open access in the next Congress.

"We want this bill to be an industry standard for access on all platforms--cable, satellite and wireless," Goodlatte said.

Some said the representatives may face a tough challenge, however.

"Goodlatte-Boucher did not gain momentum or widespread support" in this Congress, said Robert Sachs, president of the National Cable TV Association. He said increased competition in broadband will prevent any growth in its support in the next Congress.

Jeff Chester, president of the Center for Media Education, said he and his allies will spend the next days and weeks pressuring the FCC to "fine-tune" the AOL Time Warner conditions in its own merger review to make it easier for small ISPs to negotiate access. But open access opponents say further concessions to small ISPs could be dangerous.

"When the government is telling you to change your revenue model," said Sampson, referring to possible mandates on AOL Time Warner on how it can share revenues with ISPs, "it slows down broadband deployment." He said government action would discourage cable operators from investing in new systems.

But Chester sees a larger fight ahead. The AOL Time Warner conditions "saved just a few pristine digital acres," he said. Chester and his allies seek to ensure "meaningful and open access through all broadband delivery systems, including cable and wireless."

"The battle over the heart and soul of the Internet is just beginning," he said. And while the Bush camp has not taken a formal position on the issue, all agree it will play a central role in the debate.