Enron Mail

From:lisa.yoho@enron.com
To:scott.bolton@enron.com
Subject:Re: Bandwidth Trading Article
Cc:sue.nord@enron.com, susan.landwehr@enron.com, jeff.dasovich@enron.com,marchris.robinson@enron.com, aleck.dadson@enron.com, richard.shapiro@enron.com
Bcc:sue.nord@enron.com, susan.landwehr@enron.com, jeff.dasovich@enron.com,marchris.robinson@enron.com, aleck.dadson@enron.com, richard.shapiro@enron.com
Date:Tue, 9 Nov 1999 05:56:00 -0800 (PST)

Group --

Thought you might be interested in this article I picked up on "forced
access."

Lisa


< NET ADVANTAGE - [Pittsburgh Post Gazette Editorial] Washington should
< regulate access to the Web Monday, November 08, 1999 Pittsburgh
< Post-Gazette How will most of us access the Internet in 10 years? Via
< wireless technology? Satellites? Cable wire? DSL phone lines? Like most
< smart people humbled by the rate of technological change, Federal
< Communications Commission Chairman William Kennard does not know the
< answer to that question. As a result, the commission is wary of treating
< the cable industry, however promising its prospects, as the sole provider
< of high-speed, broadband Internet access and thus deserving of a whole new
< regulatory regime. Mr. Kennard knows how stifling that can be on a nascent
< technology. Better for the federal government to allow competing channels
< to the Internet to develop unimpaired, and intervene only when absolutely
< necessary to ensure competition. Unfortunately, local regulators across
< the country have been undermining this federal regulatory restraint by
< imposing Internet-related burdens on cable companies at the municipal
< level, egged on by a powerful lobbying alliance of regional phone
< companies and Internet service providers. Ongoing negotiations to renew
< the city's cable franchise agreement have made Pittsburgh the latest
< ground zero in this ferocious and important battle to determine the future
< of the nation's telecommunications policy. Pittsburgh City Council should
< resist the lure of notoriety, take a pass, and recognize that major shifts
< in national policy should be left to the Congress and to the Federal
< Communications Commission. Council members should desist from forcing
< AT&T to require "open access" to other Internet service providers as a
< condition to a new cable franchise agreement. Beyond the fact that such a
< move would be of dubious legality, it would also set Pittsburgh at a
< competitive disadvantage in terms of broadband access to the Internet, as
< AT&T would likely delay expanding service during a protracted legal
< struggle. Franchise agreements between municipalities and cable companies
< used to be fairly cut and dried. Within the parameters established by the
< Federal Communications Commission, each side would haggle over
< rights-of-way fees -- in Pittsburgh's case, some $3 million a year -- and
< then call it a day. But no more. Last December, as a condition for
< approving the transfer of the local cable franchise, Portland, Oregon
< required AT&T to open its cable lines to rival Internet service-providers
< (instead of necessarily bundling its own affiliate @Home with the
< service). They did so under the banner of "open access," and each
< subsequent franchise negotiation has been a major battle. A federal
< appeals court is now determining whether Portland had the power to do so.
< AT&T is betting heavily on cable as the Internet's future, having spent
< more than $100 billion on cable companies, and billions more to update
< their systems. It was through its $54 billion acquisition of TCI Inc.
< early this year that AT&T picked up the cable franchise in Pittsburgh, as
< well as its controlling stake in, and exclusive contract with, @Home.
< Relatively few Americans now access the Internet via cable, but more and
< more will be making the switch as AT&T and other cable players complete
< the necessary investment. Cable access is dozens of times quicker than
< your traditional phone dial-up service. Though America Online now has 20
< times more members than @Home, it and other established Internet providers
< fear the potential of an AT&T monopoly as people flock over to cable.
< America Online does not want its members to have to choose between it and
< greater speed; it wants to keep its members, whether they opt to dial in
< via Bell Atlantic's phone line, satellite, or AT&T's cable line. The
< "open access" proponents argue that it undercuts consumer choice and
< desirable competition to have @Home as the sole cable-based portal to the
< Web. They point to the long-distance telephone market as a regulatory
< model, in which one company controls the wire into consumers' homes, but
< consumers are still able to choose service providers, which in turn pay
< the wire owner for their traffic. This is a compelling vision, and may
< in time become the desirable model for federal policy. But the
< Post-Gazette believes that it is premature to rush to such a judgment.
< AT&T may yet conclude that it is best served by opening up its wires to
< all players as a means of hastening Internet consumers' migration to
< cable. There have been reports of talks between AT&T and AOL about such a
< possibility, and AT&T management has made no secret of its mixed feelings
< about being tied to @Home. Second, it may be too early to discount faster
< DSL phone lines, satellite and wireless technologies as viable
< alternatives to access the Net. But even if one ascribes to the view that
< a forced "open access" is needed now, the fight should be taken up in
< Congress and at the FCC. It is absurd to believe that policy crucial to
< the Information Age's nervous system can be cobbled together
< municipality-by-municipality. Pittsburgh should join such cities as
< Seattle and Los Angeles that have declined to throw up roadblocks to the
< timely rollout of what potentially will be one of many faster roads
< online.