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VOICES

Beware the Man Who Wants to Own the Internet

By Roy Ulrich

Date: 07-26-99

Internet access is a hot topic in a number of cities these days. One major player turns out to be none other than AT&T, now the nation's largest cable company, driving hard under its present chief. PNS commentator Roy Ulrich thinks this represents a real danger to the public. Ulrich is president and founder of the Institute for the Study of the Public Sector, a Washington-based think tank. He recommends visiting http://www.nogatekeepers.org for more information on this topic. One of two articles presenting opposing views on this question.

There is a figure on the horizon ready to compete with Bill Gates as America's premier monopolist. His name is C. Michael Armstrong, and since November of 1997, he has been at the helm of AT&T.

In a span of just 18 months, he has acquired MediaOne (the fourth largest cable operator) for $60 billion and TCI (number two on the same list) for $55 billion.

With these two purchases, "Ma Bell" has redefined itself as the country's largest cable company, with systems reaching 60 percent of American households.

What makes Armstrong dangerous is that he wants to control your access to the Internet in the same way Bill Gates controls the programs on your computer. And cable companies are uniquely situated to become the dominant provider for Internet access, because cable is faster than any telephone connection and uses the wire already connected to your television set.

Imagine if we had allowed a single company to own the electrical sockets in our homes when they first appeared almost a century ago. GE, Maytag and others would have had to pay a fee to have one of their appliances plugged in. That cost, in turn, would be passed to the consumer. Instead, we got a lot of innovation and competition in the electrical appliance business.

Technically speaking, AT&T is focusing our attention on whether broadband Internet access will be "open" or "closed." Simply put, Armstrong wants AT&T to become the gatekeeper of a very closed proprietary system that would force consumers to use the Internet service provider (ISP) of AT&T's choice. The only way to continue using your current ISP (so you can keep your current e-mail address and bookmarks, for example) would be to pay twice: once for the cable ISP and once for the ISP you already use.

But that's not all. Public interest groups such as Consumers Union, Consumer Federation of America, the Center for Media Education and the Media Access Project are all lined up in opposition to the closed system because a gatekeeper can control the speed and content of what you see on your screen. And that is precisely what Armstrong has in mind.

A closed system would mean that high-speed access would be available only to those content providers able to pay a separate charge to AT&T. So commercial shopping, entertainment, and search engine sites would be readily accessible at high speeds, and Internet users would be steered to sites that have a commercial relationship with AT&T.

But non-commercial providers unable to pay the "freight charge" would find their sites not available at the faster speed or not available at all. And small, local service providers and community networks may be unable to offer affordable broadband access because of similar financial constraints. In essence, Armstrong wants to be toll taker as well as a gatekeeper.

Those hoping for a challenge by the Federal Communications Commission have to date been disappointed. Armstrong and his allies threaten to pull the plug on cable Internet access unless the system is closed. And William Kennard, the FCC Chair, has apparently caved under this threat. So far, he has toed the cable industry line, repeating the Clinton mantra, "Let the markets do their thing."

In the end it may be up to local communities which franchise cable operators to act. The issue of closed vs. open broadband access is on the front burner in cities such as New York, San Francisco, and Los Angeles. Community activists in these cities were heartened by a recent federal court ruling in Portland, Ore., upholding the city's right to condition approval of the transfer of cable operations from TCI to AT&T on the latter providing "open" access. AT&T is appealing that ruling.

In 1974, the Nixon Administration did not hesitate to file an antitrust action against AT&T, a lawsuit that ultimately led to a 1984 decree which forced AT&T to divest itself of the regional Bell companies.

But in the 15 years since that ruling, this telecommunications behemoth has been able to reinvent itself as the country's dominant cable provider -- with no one appearing on the horizon willing to take on this threat directly.

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