Cable firms go public with open-access fight

Thousands of Californians were introduced via advertisements over the holiday weekend to the highly charged political debate concerning the access rights of third-party Internet service providers (ISP) to cable television networks.

The newspaper and television ads are being funded by Excite@Home and an anti-regulation coalition called Hands Off the Internet, which is backed in part by AT&T. The media campaign underscores the importance being placed on the issue by Ma Bell, the AT&T-controlled cable-modem service Excite@Home, and their competitors.

The ad campaigns attempt to take the issue out of boardroom meetings and behind-the-scenes political discourse and appeal directly to potential users. Many of those users don't yet have access to broadband services such as cable modems or digital subscriber lines (DSL), the two leading high-speed consumer Internet access technologies.

At issue is whether unaffiliated ISPs should be allowed to directly access proprietary, high-speed cable-TV networks to provide Internet access. The debate is raging on both the local and federal levels, with the future of high-speed broadband data services hanging in the balance.

Open-access supporters claim that without regulation, AT&T, Excite@Home, and other cable companies will monopolize the nascent market.

But the cable camp contends that too much regulation will stifle investment in the capital-intensive market and that open-access supporters such as America Online, with about 18 million dial-up subscribers, are more dominant than Excite@Home. If regulators force Excite@Home's cable-operator partners to allow competing ISPs to access their wires, the leading Net-over-cable company stands to lose those partners, the ads contend.

The advertisements are the latest salvo in what has become a full-fledged battle, which already includes high-priced lobbyists and staged public-relations events. For example, Excite@Home held a demonstration on the steps of San Francisco's City Hall last week featuring a "human chess set" with people dressed as chess game pieces. The motto: "Don't be a pawn in AOL's game."

The Hands Off the Internet group began airing television commercials last weekend in San Francisco. The coalition was formed last week and includes AT&T, the Texas Consumers Association, and Americans for Tax Reform.

"We think there are lots of options for broadband access and we think that market forces ought to decide who goes where, and not have the government dictate that," said Chris Wolf, the group's president and a partner at the law firm of Proskauer Rose.

Hands Off the Internet will soon begin airing TV ads in Broward County, Florida, where county officials also are weighing open access, said a coalition spokesman. A vote could come in Florida later this month. The group also opposes other regulatory burdens on the Net such as taxation.

According to a spokesman, Excite@Home paid for the print ads in the San Francisco Chronicle and San Francisco Examiner newspapers Monday and Tuesday, opposing what the company calls "forced access." The company also took out an ad in the Los Angeles Times. In Los Angeles, the issue has resulted in county officials' resignations following a report recommending against imposing open access.

The San Francisco-area ads were timed in advance of a critical local-government meeting on the issue.

The San Francisco Board of Supervisors met in a closed-door session Tuesday to discuss the legal ramifications of certain requirements it could impose on AT&T, including open access. The city is in negotiations with AT&T concerning the company's takeover of the local cable franchise as part of its purchase of Tele-Communications Incorporated.

AT&T is expected to respond by Monday to some city officials' concerns about Internet competition, according to a city source. A vote on the issue could come at the board's July 26 meeting, the source said.

Separately, AT&T last week was granted an expedited review of its legal case against Portland, Oregon-area local governments.

Portland is so far the only city formally seeking open-access requirements. A federal judge upheld the city's right to impose open access on Ma Bell, but AT&T appealed to the 9th Circuit U.S. Court of Appeals. Court briefs are due in August and September and oral arguments are expected to begin in October, according to an AT&T spokeswoman.