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Forum: Let's not play monopoly The city must force AT&T to offer other Internet service providers space on its cable lines, says Marcus Ruscitto of Stargate, or consumers will suffer Sunday, October 24, 1999
Remember the rotary dial, two-piece telephone? It was a fixture in American homes and businesses for decades. Constant and boring. Order it in any color you want, as long as it's black.
Stargate Industries.
That's what you get without competition. Dreary functionality with no innovation, no reason to develop. Are we prepared to doom the next wave of Internet access to the same stunted development that the lack of competition inevitably produces?
Government bodies from the FCC to local municipal authorities, including Pittsburgh City Council, are facing an issue that will have lasting impact on how consumers can use the Internet. The issue is termed "open access."
An emerging alternative to the traditional telephone dial-up connection to the Internet is access through cable television lines. Internet cable connection can be convenient (where the upgraded lines are already in place) and fast (up to 100 times faster than dial-up, modem connections).
What the giant cable companies want is to provide the Internet connection for the majority of American homes. Sounds reasonable - but there's a catch. Cable operators want to force consumers who choose a cable connection to also purchase the services of their own, affiliated Internet Service Provider (ISP).
In essence, there are two "products" necessary to travel the Internet. The first is connection, phone lines and cable lines are the most prevalent and represent the hard facilities necessary to get "on line." The second product is access, a point or service portal through which all Internet users must travel to email, search, purchase, chat or surf on the Internet.
Access is provided by ISPs, America Online being the most recognizable due to its nearly 18 million customers. Stargate is the largest Pittsburgh-based ISP with more than 60,000 business and residential subscribers. Nationally, there are nearly 6,000 ISPs of various sizes, and, along with access, these companies typically provide the technical support to help users perform Internet-related functions.
If connectivity to the Internet via cable modem proves to be an attractive technology, the restrictive policies of the cable companies will threaten the overwhelming majority of ISPs. Cable companies, exercising their monopolistic muscles, currently "bundle" the two products, connection and access. You can't buy one without buying the other.
Cable contracts with municipalities make sense. However, this connection cartel should not be extended to connection and Internet access.
In the world of Internet access, the demons of anti-competitive practices - escalating prices, abysmal service and stunted innovation - are compounded by preferential treatment. What is only a cable-affiliated site would download quickly and receive premium exposure during initial connections.
I don't believe anyone wants their cable company serving as the "gatekeeper" for Internet products and information access.
Furthermore, there is abundant space on the standard cable system for competing ISPs. Today's technology makes consumer choice both feasible and affordable.
ISPs not affiliated with a cable operator are not asking for a free ride. We understand that there's a capital investment by cable operators to consider. All ISPs want is a level playing field. Cable companies should provide access through cable lines at a fair price, essentially the same price the cable company's affiliated ISP pays.
The current structure requires consumers to pay twice for the privilege of selecting their preferred ISP. Even though a consumer may not want the cable operator's affiliated ISP - tough. Pay for it anyway.
In Pittsburgh, AT&T Cable Services (formerly TCI) provides cable service, and its affiliated ISP is excite@@Home. The cable franchise agreement with the city is up for renewal, and AT&T is digging in its heels to reject an open access mandate suggested by Councilman Dan Cohen.
The renewal agreement must consider advancements in telecommunications and prevent the spread of monopolistic practices beyond practical and reasonable boundaries.
Competition and unbridled creativity have been hallmarks in the development and exploding popularity of the Internet. Big business should not be allowed to turn back the clock.
How important is this issue to AT&T on a national scale? Consider information released in a Sept. 6 Time magazine article on "soft money" political donations. In a list of top five donors to either the Republican or Democratic parties, AT&T was the only company that made the top five for both parties. The comments for justifying AT&T's political generosity were: "Wants support in its fight over access to high-speed cable lines" and "Is contributing to both parties for help on contentious telecom issues."
The open access battleground is national, and the next fight is right here in Pittsburgh. It's important for Pittsburghers to let City Council know how we feel: We are not interested in extending monopolies beyond their original intent. Competition and consumer choice should reign supreme for Internet access. Consumers should not have to pay for a service they don't want. And it's up to elected officials to take action that is in the best interest of their constituents.
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