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The Internet Access Tangle

July 25, 1999

As Los Angeles' elected officials debate the need for regulating high-speed Internet access through cable television lines, it's important for those officials to stay focused on engaging, educating and protecting the people whose interests they were elected to represent: the consumers.

To date, there has been scant evidence of focus. That is shocking, given that the rest of Southern California, as well as the nation, is watching Los Angeles to see what course it takes. At issue is a decision that will affect the way Angelenos communicate with each other and access a wide array of digital consumer services, including telephones and computers, in their homes for years to come.

The titans of the information age, from AT&T and AtHome to America Online and the Baby Bells, view Los Angeles as the preeminent local government battleground. They are spending millions of dollars on high-priced lawyers, lobbyists and experts to influence the city's decision.

On one side is AT&T, which has made massive acquisitions in the cable television industry in preparation for the rollout of high-speed, two-way cable Internet access and other services. On the other side are AOL, Pac Bell, GTE and others, which demand access to the cable lines the AT&T companies will install. AT&T, with the support of the Federal Communications Commission, contends that it should have exclusive use of the lines in order to most quickly wire Americans to vastly improved service. AOL and others contend such a decision would create a new AT&T monopoly that would inhibit competition, raise prices and even control content.

It's not even clear whether cities have the authority to regulate Internet access in this way. Portland, Ore., and Broward County, Fla., have directed cable companies to open their lines to competitors, but those orders have been challenged in the courts.

Mayor Richard Riordan favored letting AT&T have its way, then observing its operations for three years before making any decision on whether to open up the cable lines to competitors. But his hand-picked Information Technology Commission disagreed with the mayor and three of its five members resigned.

Last year, the City Council encouraged so-called "open access," letting cable competitors use the cable lines. Now, at the very time that the Council must demonstrate convincing leadership, Council President John Ferraro has kicked the Council's Information Technology Committee chairman, Mark Ridley-Thomas, off the panel and handed the critical role to a council newcomer, Alex Padilla. To Padilla's credit, the 26-year-old probably knows more about computers than most council veterans. He is a graduate of the Massachusetts Institute of Technology and a mechanical engineer, well-versed in computer-assisted design work and online databases. But he has to play catch-up at a most inopportune time and he knows it.

Both Padilla and Ridley-Thomas suggest that more time is needed to engage the public and to enlist the advice of impartial experts.

AT&T and the cable companies are hardly weaklings in this case. AT&T's acquisitions will give it control of more than half of the nation's cable television franchises and as much as 80% of the Los Angeles market. Perhaps more important, it will be capable of competing with the Baby Bells in local telephone services. AT&T and its subsidiaries claim they will not limit cable TV content, but at the same time, it reportedly has refused to air ads by "open access" backers on San Francisco cable stations.

But arguments for "open access" suggest that cable is the overwhelming medium for high-speed Internet access. If that is the case, why are competitors making heavy investments in other high-speed technologies? AOL, for example, recently made a $1.5 billion investment in satellite technology. Pacific Bell Internet Services is pushing DSL, high-speed digital subscriber lines. Microsoft has invested in Qwest, which runs a fiber optics network. The public needs to understand these distinctions, and soon. And city politicians must articulate their own reasoning. Los Angeles has shown is that, so far, it is not prepared to make an informed and persuasive decision.

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