A decision by San Francisco's Board of Supervisors has ratcheted up pressure in a national fight over which companies will bring high-speed Internet access to Americans.
The vote late Monday by the governing body of the city set back efforts to force AT&T Corp., which owns the local cable franchise, to open its coming network of cable modems to other Internet service providers.
The fight is proceeding in localities across the country, with the city and county of Portland, Ore., recently winning a federal court decision upholding their demand for open access, and a vote by Broward County, Fla., demanding open access as well.
AT&T, however, has won other local fights, and it argues that requiring open access would give it no incentive to spend billions of dollars to upgrade cable networks for Internet access.
The fight over high-speed, or "broadband," access to the Internet involves some of the biggest companies in the world of communications. It pits AT&T against other telephone companies, which don't want to see it rise as an Internet power.
It also involves Internet service providers such as America Online Inc., which say they will be effectively shut out of much of the broadband world if cable operators are allowed to monopolize cable-modem access. In the weeks leading up to the vote, San Francisco was the scene of a bare-knuckle, multimillion-dollar lobbying and advertising campaign.
Although San Francisco gave AT&T what it wanted most--permission to officially take over the cable franchise it acquired in its acquisition of cable company Tele-Communications Inc.--the city took pains to state that its heart was on the other side of fight.
It stated its support for open access to the Internet, announced that it would file a brief in support of Portland at the appeals court and stated that it would take up the open-access issue once more in December, when AT&T's license renewal comes up for review.
Essentially, AT&T argued successfully that the city did not have the power to change the terms of a license when deciding whether a transfer was legal.
The Federal Communications Commission has consistently declined to intervene in the fight over cable modems, arguing that market forces will do a better job of bringing high-speed Internet access to the American people than regulation.
An AT&T executive applauded the decision yesterday, saying the company was "extremely pleased" with the vote. AT&T General Counsel Jim Cicconi told reporters yesterday: "I don't expect that the opposition is going to fold their tent and go away," but he added that AT&T expected to win. The companies arrayed against it have had "extremely limited success at the local level" and "no success at the national level," Cicconi said: "While there's some hue and cry out there, in the end I feel the law is clear."
In a statement, AT&T's president of western regional consumer services called the decision "a real win" for San Francisco residents.
AT&T's opponents took consolation yesterday in San Francisco's moral support on the open-access issue.
"If David fights Goliath and David walks away to fight another day, then David won," said Greg Simon, a former domestic policy adviser to Vice President Gore who now serves as co-director of the OpenNet coalition, which represents online companies in the fight against AT&T.
A member of Congress who has introduced legislation requiring open access to broadband networks noted yesterday that federal law already requires that kind of openness with standard phone service.
"We shouldn't have different regulations apply to a telephone company and a cable company when they are providing the same service," said Rep. Rick Boucher (D-Va.).
He also said "I honestly do not understand" the FCC's hands-off stance on cable modems in light of the agency's extensive attempts to regulate the entry of the former Baby Bells into long-distance phone service.
The fight against AT&T has also been joined by consumer groups. Jeff Chester of the Center for Media Education, which has joined such groups as Consumer Federation of America and Consumers Union in calling for open access, said yesterday, "AT&T can act as gleeful as it wants, but more and more cities are standing up here."