A public-interest law firm filed documents with federal regulators today to block the proposed acquisition of Tele-Communications Incorporated by AT&T, citing anti-competition ramifications for Internet access via cable.
The non-profit Media Access Project, a Washington-based law firm, filed a petition with the Federal Communications Commission that seeks to deny government approval of the transfer of licenses from TCI to AT&T, which essentially put the kibosh on the deal.
At the heart of the Media Access petition, filed on behalf of Consumers Union, the Consumer Federation of America, and other consumer groups, is concern that TCI--with the substantial financial resources of AT&T--will control how consumers obtain high-speed access to the Net.
TCI owns cable Net access provider @Home. Internet access via cable modem is increasingly seen as a more appealing option for high-speed surfing, especially in the residential market, where cable television already has a high penetration.
"If consumers want to get on the Internet and they're in TCI's region, they have to take @Home's content. They have no choice," said Media Access attorney Cheryl Leanza. "If one corporation controls all the wires to the Internet and controls what you have to see first, then that's going to undermine First Amendment values."
AT&T chief executive Michael Armstrong said today his company plans to continue allowing @Home customers to access other proprietary services such as America Online. AT&T also plans to standardize the way other Internet access providers interface with @Home in order to offer new services to @Home users, Armstrong said.
"We're a fully integrated Internet service that also gives you access to other services. A percentage of our users also access AOL through [an IP connection]," said @Home spokesman Matt Wolfrom.
"People want broadband and they want it as soon as possible. And so does the FCC, quite frankly. DSL is also rolling out. There are and will be choices," he said.
In all, 17 companies or groups filed documents with the FCC today, the deadline for public comment on the deal, according to International Transcription Service, a federal contractor that works with the FCC.
November 13 is the deadline for all parties involved to respond to today's petitions. AT&T expects to complete the TCI purchase by mid-1999.
Bloomberg contributed to this report.