Ma Bell, for years the leading long distance telephone company, is a powerful newcomer to the clubby world of cable television operators. Now AT&T is bringing its brand of no-holds-barred political tactics, honed from years of fighting federal regulation and fending off feisty long distance competitors, to the battle over so-called open access.
Open access--or "forced access," as the cable camp prefers to call it--is quickly shaping up to be the largest regulatory fight the Internet industry, and perhaps the oft-scrutinized communications market, has seen in years. Proposed open-access laws, which so far have gained traction only in Oregon, would require cable operators to allow unaffiliated Internet service providers such as America Online to use their proprietary high-speed networks.
The mandate, if it were implemented nationally, would effectively nullify cable companies' exclusive agreements with cable-modem services such as Excite@Home and Road Runner. Despite the potential ramifications for the industry, so far only Excite@Home and its largest shareholder, AT&T, are voicing their opposition in a very visible way.
Other cable operators, and Net-over-cable services, which stand to be equally affected, have yet to make much noise.
"We don't have the same resources," said Matt Zinn, senior attorney overseeing broadband issues for MediaOne, the No. 4 cable operator. "We have been talking to our community, our users, and our congresspeople rather than spending money on advertising."
AT&T also has been placed under the microscope by specific communities such as Portland, Oregon.
Going public with their cause
An AT&T-backed coalition has begun airing television commercials to raise awareness for their cause, while Excite@Home placed advertisements in several California newspapers last week.
The tactics are aggressive given the embryonic nature of the debate: Despite the open-access push in Oregon and a handful of proposed federal and state laws, federal regulators appear satisfied with the state of competition in the cable Internet access arena. But the vigor with which AT&T and Excite@Home are opposing "forced access" emphasizes the companies' concern.
Some say AT&T's entry into the cable industry has inadvertently proved to be an effective villain for America Online and the other ISP groups.
"It's easy to personify AT&T," Zinn said. "Everybody's afraid of Ma Bell or Ma Cable taking over the world. These are buzzwords that resonate with consumers."
But even as AT&T and Excite@Home beat the drum in opposition to "forced access," other cable players are helping the cause in their own ways.
"This is a massive political-persuasion machine that's going on," said David Pine, general counsel for Excite@Home. "But you're only seeing the tip of the iceberg. Much of the action is going on in a much more quiet way."
Pine said other cable operators are actively lobbying Congress, federal regulators, and local governments in a much quieter way.
Time Warner Cable executives have testified at Washington hearings on the issue, and the company submitted a white paper detailing its position to Los Angeles officials in advance of the city's five-month report on open access.
"Fundamentally, all of the players agree about the general principles, but we all have sort of enunciated them in different ways," said Mike Luftman, a spokesman for Time Warner Cable. "We're involved where we think we can have an appropriate presence and will continue to do so."
The Portland, Oregon, case directly affects only AT&T, which explains the company's vocal opposition while other operators hang back in the public-relations shadows.
"AT&T has had to take the lead, because they're being forced to by the case in Portland and their merger with MediaOne. So it's understandable that they'd be out in front," Luftman said.
Because other operators have not taken out paid advertisements does not mean they don't support AT&T or oppose "forced access," Luftman added.
Different strokes, different folks
To a certain extent, the various levels of visibility underscore the cultural differences emerging in the cable industry. Recent entrant AT&T and Excite@Home--which as the leading cable modem service and a publicly traded company has become what Pine calls "the poster child for cable Internet access"--bring a certain swagger to the high-stakes debate. However, privately held Road Runner, a joint venture between five separate companies, has traditionally been much more low-key.
AT&T, unique among the major cable companies, has a long history in public-persuasion campaigns.
The company is a veteran of public-opinion battles over long distance and local telephone regulatory battles, where it has gone toe-to-toe with the big local phone companies in Congress, the Federal Communications Commission, and in state legislatures and regulatory agencies. These fights, often over obscure regulatory details, have spilled over into television commercials, print ads, community "coalitions," and public-relations events.
Most recently, the mergers of SBC Communications with Ameritech and Bell Atlantic with GTE have prompted well-funded and well-publicized opposition from AT&T-backed "consumer" groups in those states with the legal power to slow or stop the mergers.
This experience has primed the newcomer to the cable market to take its brand of well-seeded "grassroots" lobbying--or Astroturf, as some have called it--into the open-access debate.
But the opponents agree that the debate is still in its early stages, even with the full-court media press now under way in San Francisco, Los Angeles, and a few other cities around the country.
"I think the public is only beginning to think about this issue," said George Vradenberg, America Online's general counsel. "In terms of public impression, it's just beginning to get out there."