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February 23, 1999

Monopolizing the Internet

by Tracy Blair

Recent mergers between AT&T and leading cable television companies nationwide have many people wondering whether a new monopoly is being formed. In June 1998, AT&T announced its merger with TCI (Tele-Communications, Inc.). TCI's Liberty Media Group includes interests in Encore Media Group; Discovery Communications, Inc.; Time Warner, Inc.; QVC, Inc.; USA Networks, Inc.; and Fox/Liberty Networks. These leading cable television service providers would give AT&T seemingly exclusive access to the industry of Internet Service provided via broadband access lines, with services such as "RoadRunner."

This has many people shouting "Monopoly!" The OpenNet Coalition, a network of Internet Service Providers (ISPs) including AOL, MCI WorldCom, Prodigy, MindSpring, US West and many others, is trying to broach the issue on a Federal level. In a joint letter to the Federal Communications Commission (FCC) on January 20, 1999, members of the OpenNet Coalition urged the Commission to "pursue a pro-consumer choice, pro-investment in competitive broadband networks and spur the prompt and full realization of the profound benefits of broadband communications for our nation." This letter, signed by eighteen Internet Service Providers, states that this action is imperative to ensure that entrepreneurs and the public alike can reap the benefits in price and performance that a competitive environment creates. The letter quotes the Presidential Directive on Electronic Commerce, issued July 1, 1997, that called for a global policy "ensuring that service providers have nondiscriminatory access to customers worldwide."

In its "What's At Stake" section on-line, the OpenNet Coalition explains exactly why it feels that this merger may threaten consumer choice and competition. It states that cable operators are "now attempting to use control of broadband access lines to dominate Internet content," and that, "cable operators such as TCI in its proposed merger with AT&T are seeking to change the internet into a corporate 'Intranet' by controlling almost all facets of it from the local transmission network, to the ISP service, the portal, and even the Internet backbone."

MindSpring, an ISP involved in the OpenNet Coalition, has been one of the more vocal contenders in this issue. In an article by David Browermaster on, MindSpring's political and legal actions are noted. Both David Baker, vice president of legal and regulatory affairs, and Charles Brewer, chief executive officer, have been deeply involved. MindSpring helped to form the OpenNet Coalition, and has lead several of the challenges taken to the FCC. "For several weeks, Baker has been trying to persuade local governments to force cable giant TCI to open its networks so competitors can offer high-speed access over its lines."

"A person whose only means of broadband Internet access is cable shouldn't be precluded from using us," Baker argues. The ISP, and many like it, feel that consumers should be able to access any ISP whether over phone or cable lines. Greg Simon, co-director of the OpenNet Coalition and former chief domestic policy advisor to Vice President Al Gore, says, "the MindSprings of the world want to be able to do what they do best, which is to compete to provide the best Internet service out there."

As you might imagine, cable industry representatives along with representatives of AT&T argue that if consumers aren't happy with cable access ISPs, they will "still be able to choose from other high speed services such as DSL from the phone companies or satellite access." The FCC and Cable Telecommunications Association seem to be taking a similar stance. The FCC concluded in a recent report that "deployment of advanced telecommunications capability appears to be reasonable and timely," while the Cable Telecommunications Association refuses to accept that they are somehow bottlenecking high- speed access to the Internet.

Other politicians have also jumped into this political debate. Representative Ed Markey of Massachusetts recently wrote a letter to the chairman of the FCC stating "It is with growing concern that I note the emergence of broadband networks -- most notably in the cable industry -- that are designed to reintroduce bottlenecks to competition, choice and innovation." He goes on to say that the Commission should "move quickly to ensure that no gatekeeper channels for broadband access are being created."

In his closing argument, Markey summarizes the opinion of many ISPs and consumers alike: "By taking such action, the Commission will help to safeguard the open Internet platform the country enjoys today as the owners of telecommunications facilities upgrade to higher access speeds."

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