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Cable World Staff
After weeks of being pummeled in the open access war raging across the U.S., cable operators last week got a break, as a series of events appeared to strengthen their position.
A key factor toward leveling the Internet open access playing field: The FCC filed its long-awaited "amicus" or friend-of-the-court brief last week in the Ninth Circuit Court of Appeals in San Francisco supporting AT&T Broadband and Internet Services. The company has been struggling against America Online Inc. and other Internet service providers (ISPs) which are seeking access to AT&T's networks.
The FCC's lengthy brief largely supported AT&T's challenge, but stopped short of asking the court to completely overturn a lower court's ruling favoring the city of Portland. The commission asked the court to rule "in a narrow fashion." The NCTA also filed comments on the case and reiterated its case opinion that cable companies shouldn't be required to open their networks to other competing ISPs.
Separately, NCTA president Robert Sachs said the commission's brief, "sends a strong signal that 30,000 city councils should not set Internet policy."
In a broader context, at least one observer said last week that the open access debate has become mired in rhetoric and the general public isn't getting a clear picture of the debate.
The commission's brief stated that the real issue before the court is whether "local governments have the authority to impose local restrictions in broadband technology, particularly in light of the FCC's finding that it should not regulate the broadband market at this time." But the commission noted, "AT&T has put this court in an awkward position" by bringing the case to court rather than "seeking relief" at the FCC.
The FCC suggested there might be some error in characterizing broadband service as "cable." However, the commission avoided that particular debate, purposely dodging whether broadband should be classified as "cable," "telecommunications" or "information." Each has the potential to be regulated under different sets of rules.
In AT&T Broadband & Internet Services' backyard, it looked like the company will get a reprieve from having to fight the open access issue at the most basic level - with the voters. A group led by RMI.NET Inc., and U S West Communications Inc. submitted more than enough signatures to get the open access issue on the upcoming November ballot.
But it appears they didn't get the petition submitted in time for the petition to work its way through the bureaucratic process. At the same time, the ballot initiative renewing AT&T's franchise for at least another 10 years will be on the upcoming ballot. Denver city attorney Stan Sharoff said last week the ISP group can try to get voters to address the issue during a special election in February.
This development could be important because many other ISPs around the country are considering similar measures and are closely watching what happens in Denver. Some observers said last week that the delay could prompt other ISPs to postpone any petitions they may have brewing.
Other events that helped AT&T's stance included:
* America Online Inc. COO Robert Pittman sounded a conciliatory note at a Kagan Seminars Inc. speech in New York last week saying he's "very optimistic," a business solution will be worked out on the open access issue. "All of us are trying to figure out where we'll all end up," he said. "It's always tough to get from point A to point B. But economics always wins."
* Cable stocks, which have been tumbling significantly since June when AT&T Corp. lost its lawsuit against Portland, Ore., rebounded a bit last week. The Kagan Cable MSO Average rose 4% from the previous week to 4,767.49 Aug. 18.
Meanwhile, Pittman may have sounded harmonious during the Kagan conference, but Excite CEO Tom Jermoluk stood his ground, which was squarely behind the judicial process.
"Nothing is going to happen on mandated access until the Portland decision," he said. "This issue is to be decided on the federal level. We feel 100% confident that the state rights issue will be overturned. The FCC has far more experts than Portland or Broward County. It's not something we worry about on a daily basis."
On the business side, Excite isn't willing to risk loss of business to AOL. The company signed a non-exclusive deal with AT&T to provide interactive technology and services to advanced digital set-tops, getting the jump on any possible AOL TV deal the online service might offer to cable operators.
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