In a letter sent to the Federal Communications Commission on behalf of telecommunications giant AT&T, two economics professors argued that the firm does not hold a monopoly in high-speed Net access and thus shouldn't be subject to new federal regulations.
Their argument runs contrary to assertions by critics, including Internet service providers (ISPs) like America Online, which claim the firm is locking them out from the lucrative high-speed Net market by not allowing access to cable networks.
Although the legal arguments aren't new, the documents are just the latest in a year-long series of court cases, legal briefs, and press conferences aimed at swaying policy makers and the public's perception of high-speed Internet access. With billions of dollars in subscription fees and e-commerce revenue at stake, both the cable industry and independent ISPs have much to lose.
The heated national debate has continued despite AT&T's recent agreement with MindSpring Enterprises to offer high-speed Net access after AT&T's exclusive contracts with Net-over-cable firm Excite@Home expire in 2002.
Last week's "ex parte" filings by Robert Willig and Janusz Ordover refute previously filed documents written by fellow professors Mark Lemley and Lawrence Lessig.
Lemley and Lessig called on the FCC to impose "open access" requirements as a condition of approving AT&T's acquisition of MediaOne Group. They believe the merger could lead to decreased competition and innovation in the nascent high-speed, or "broadband," Net access industry.
Willig and Ordover wrote that "because it is clear from application of the standard analytic framework to the facts that AT&T has no 'natural monopoly,' 'certified' or otherwise (or any power in any relevant market), the resulting 'analysis' of Lemley and Lessig is entirely irrelevant to actual policy decision-making."
AT&T executives echoed similar sentiments on a conference call today. "What I'm concerned with is Professor Lessig's argument that somehow a monopoly exists where clearly one does not," AT&T lawyer Jim Cicconi said.
Yet consumer groups still maintain that AT&T has an unfair advantage in the high-speed Net market. The Consumer Federation of America said the MindSpring agreement does little to quiet its concerns about competition.
"Public policy action is even more necessary as a result of the failure of private negotiations to produce a meaningful definition of open access," CFA representatives wrote in a recent news release.
The proposed AT&T-MediaOne merger has opened the door for a new round of local fights over whether new regulations or market deals should determine the path of cable access. ISPs support federal rules, while cable operators want to carve their own agreements with ISP partners.
More than 90 percent of the local MediaOne franchises licenses have been transferred to AT&T without "open access" conditions, AT&T executives said at a recent cable industry conference.
The federal courts may be the final arbiters, despite the recent FCC filings and lobbying efforts. A federal appellate court ruling in Oregon is expected next year and could come as early as January, legal experts have said.