Transatlantic Cable: Cable Wars - The Phantom Lawsuit

There's a battle for control going on in the US: the battle for who gets to offer high-speed Internet access over cable TV connections. Silicon.com's US correspondent Richard Baguley reports from no man's land...

On 27 July, the San Francisco board of supervisors (the equivalent of the town council) had one of its best-attended meetings in years. Several hundred members of the public packed the hall and when they were invited to comment, proceedings were halted for some time. The issue that had brought these people out was who is allowed to offer Internet services over cable TV connections. It seems like an odd issue to make people want to sit through a four-hour meeting, but what's at stake is fundamental to the future of the Internet in the US. A quick history lesson: in 1998, AT&T bought out TCI, the largest cable TV company in the US. Because this effectively involved transferring the TCI's licence to provide cable TV services in San Francisco over to AT&T, it had to be approved by the Board of Supervisors. Meanwhile, similar meetings in other towns had resulted in the town councils adding a new condition to the licence: AT&T would have to allow other Internet service providers (ISPs) access to its cable TV network so they in turn could offer high-speed Internet services. The town council in Portland, Oregon, added that condition to the licence and are currently being taken to court by AT&T, which claims it didn't have the authority to add this. The arguments run something like this: AT&T claims that being forced to allow others access to its network will cost them a fortune. So much so it might not be updating its cable infrastructure if it was forced to allow other ISPs to sell services on its network. It (and others) funded a lobbying group called Hands Off The Internet (at http://www.handsofftheinternet.org ) which ran an expensive series of TV and newspaper adverts claiming that government had no right or role in saying what AT&T could or couldn't do. On the other side is the Bay Area Open Access Coalition (BOAC) (at http://www.boac.net ), which claims AT&T will effectively have a monopoly if its @home subsidiary is the only means users can get Internet access via the TV connection. Unless other ISPs are allowed onto AT&T's network Web users will be denied the ability to chose who they want to provide their access. Frankly, it's rather difficult to work out which side is deeper in the garbage pile here. I find it rather hard to swallow the arguments of either side. AT&T's claims that it was technically impossible to share its network were obviously somewhat economical with the truth. It's not that difficult to build an open access system - AT&T just don't want to do it. On the other side, the arguments of the BOAC that AT&T will get a virtual monopoly in Internet access seem rather hard to believe in a country where you can get a 384Kbps DSL connection for only $49.99 a month. Interestingly enough, AOL (one of the funders of BOAC) has just announced a partnership with GTE in which it is planning to offer a DSL service in some areas for a cost of around $40 a month. But what's really odd is the language both sides have used to further their arguments. Both have declared that it's a fight for the freedom of the Internet. Of course, it has very little to do with this, and a lot to do with money. Despite the names of the lobbying organisations, what we are basically dealing with here is a fight between big businesses. It has little to do with the freedom of the Internet or getting access to the people: it's really about who can make a profit out of the Internet. That isn't necessarily a problem in itself, but why have both sides decided to try and claim that they are fighting for freedom when it's all to do with the ability to turn over a few dollars? AT&T had been hoping that a combination of sweeteners - free Internet services for charities and a $250,000 grant to wire government buildings - and threats - to not invest in upgrading San Francisco's ageing cable TV infrastructure - would force the board to give it the licence without conditions. In the end, the Board of Supervisors passed a motion that sits squarely on the fence: it will pass the licence to AT&T, but will review the issue of open access again in December. It will also file a supporting brief in the case between the City of Portland and Oregon and hope that the court finds in favour of Portland. This is just the first step in a process that is likely to go on for some time to come - both sides have already indicated that they have deep pockets and are willing to spend big money on publicity, legal and generally dragging the process out. Although this was the first skirmish, the battle for access to cable TV Internet connections has only just been joined... * Richard Baguley is Silicon.com's US correspondent, located in Silicon Valley. He is the former deputy editor of Internet Magazine, the former editor of Internet Today and Amiga Shopper Magazine. He has also written for magazines like Mac Format, .Net and online services such as Wired News. He can be contacted at baggers@baggers.com