AT&T Corp. is crowing over its victory in getting the notorious Ninth Circuit Court of Appeals to overturn a lower court's ruling that Portland, Ore., could require AT&T to open up its cable network to other Internet providers. (If you want more details, click here to get the story.)
I won't comment on the specifics of the ruling -- except to note the Ninth Circuit has a reputation of being way out-of-step with the Supremes and frequently being overturned itself. Perhaps not this time, since local cable franchising authorities probably don't have the authority to do what Portland did.
Here's the real issue: People who bring a cable into your house should be required to allow anyone to use it under fair terms. This means dial tone, cable television, long-distance services, whatever. Just because AT&T is your cable provider shouldn't give them the right to control your Internet access, even over their own cable. The physical cable is a public utility and ought to be used for the public interest, convenience and necessity -- not just AT&T's.
We have come to accept this in telephony, where your telephone can be used with a long-distance provider of your choice. It can also call any Internet provider you choose. For example, the DSL line at my house connects to Pacific Bell as my ISP -- but if the company keeps screwing up, it will soon connect to someone else. And that's how it should be.
Does Pac Bell provide the physical connection? Yes. Should it be compensated for that? Of course. But does that give it the right to make my choices for me? Hell, no, it doesn't. AT&T should receive fair compensation for services it carries, but it should do so on an equal basis for everyone.
The issue is important because AT&T's Excite@Home service is based in part on controlling customers' Internet access and sending them preferentially to AT&T's partners. The architecture of the system brings broadband Internet services close to the customers' homes -- providing a quality multimedia platform for AT&T's partners. Competitors can be left in the cold.
This means companies AT&T doesn't cut deals with could be at a tremendous disadvantage in the broadband future. AT&T customers might get high-speed access only to AT&T partner sites but not to others. So an online movie might look good if it comes from an AT&T partner but slow, jerky and postage-stamp-size if it comes from anyone else.
AOL had been leading the fight for open access. Now that it has Time Warner's cable services to foist AOLTV on its customers, however, maybe Steve Case will be content just to split the spoils with AT&T. Only time will tell.
It wasn't so long ago that TCI seemed to be America's most-hated company. The AT&T acquisition has only rehabilitated the cable company a little. TCI was well-known for putting TV channels onto its limited-capacity cable systems because it had a financial stake in the channel, not because viewers really wanted it. This made it much more difficult for new cable networks to get started.
The only thing that has brought this force-feeding into check is DirecTV; direct satellite broadcasting gives customers the ability to tell the cable company to get lost.
Now AT&T seems to be continuing this dubious practice with its cable modems. And it's wrong. The cable leaving my house should connect to the products and services I desire -- not just the ones AT&T wants to sell me.