[Oregonian] The War to Open Cable Networks.

I Find Karma (adam@cs.caltech.edu)
Fri, 18 Dec 1998 12:41:07 -0800 (PST)

You gotta love the city of Portland, who may be directly responsible for
jeopardizing a $48 billion merger:


There's a huge legal battle brewing in the high-speed Internet access

> Agencies insist on open cable network
> AT&T and TCI must open cable network to rival Internet companies if they
> want to offer Internet access, Portland and Multnomah County say
> Friday, December 18 1998
> By Su-jin Yim of The Oregonian staff
> Portland and Multnomah County scored two big wins Thursday in a closely
> watched clash over access to a potentially lucrative high-speed Internet
> gateway: the cable network.
> Both the Portland City Council and the Multnomah Board of County
> Commissioners told communications titans AT&T Corp. and
> Tele-Communications Inc. that they must open their cable network to
> rival Internet companies if they want to offer Internet access in
> Portland and other Multnomah County cities.
> The companies, which have spent the past two months fighting the
> requirement, criticized the decision, saying it could jeopardize their
> planned $48 billion merger.
> "What Portland is saying to the business community is when you build
> that better mousetrap, we'll give that technology over to your
> competitors," said Steve Kipp of TCI.
> Thursday's votes pushed Portland and Multnomah County to the leading
> edge of a nationwide debate over opening the cable network -- as hopes
> fade for true competition in the telecommunications industry and
> questions arise about local jurisdiction in an increasingly nonlocal
> business marketplace. The discussion may continue in city halls across
> the country as local commissioners consider whether to approve the
> transfer of cable franchise agreements.
> The issue centers on high-speed Internet access to the home. AT&T and
> TCI, which announced their merger in June, have said they want to use
> the cable network to sell local and long-distance phone, Internet, data
> and cable services. If successful, it could finally bring local phone
> competition to consumers as well as Internet speeds, via cable modems,
> as much as 100 times faster than 28.8k modems.
> But under the plan proposed by AT&T, consumers would have to pay twice
> to use an alternate Internet provider over the cable network -- once to
> TCI and once to their Internet provider.
> TCI and AT&T have consistently argued that federal regulators, not local
> councils and commissions should decide the access issue. The Federal
> Communications Commission is studying the proposed merger, but it's
> unlikely to act on the access issue any time soon.
> "We have no idea when the FCC will rule," said Portland city
> Commissioner Erik Sten. "We hope they will address this soon. Maybe our
> action will help encourage their consideration. If not, then it is all
> the more important that we address this ourselves."
> The issue came before local jurisdictions only because AT&T must take
> control of TCI's thousands of cable franchise agreements if it is to
> capitalize on its extensive cable operations.
> The Mt. Hood Cable Regulatory Commission, a volunteer group of eight
> citizens, made national news last month when it voted to recommend to
> the city and county that access be required as a condition of the
> franchise transfer. The group, which oversees cable services in
> Portland, Multnomah County, Wood Village, Fairview, Troutdale and
> Gresham, defied the wishes of the merger partners, which, when combined,
> would have revenue of $58 billion and a work force of 160,000.
> Both the City Council and county commission Thursday decided to follow
> the cable commission's recommendation, saying consumer choice is vitally
> important.
> The vote sets the stage for an expensive legal battle. Kipp said the
> companies will not accept the open-access condition, and that they have
> exhausted negotiation.
> TCI and AT&T aren't the only ones with big stakes. US West, America
> Online and local Internet service companies have fought for open access.
> Richard Horswell, president of Oregon's trade group for Internet service
> providers, held out hope that the local Internet companies would be able
> to negotiate further with TCI and AT&T.
> "In the end, the company will give on this," Horswell said. "That's the
> bottom line."
> Under local requirements, TCI and AT&T have 12 days to accept the terms
> of the franchise transfer.
> If they don't accept, the transfer is automatically denied. It's unclear
> what will happen next, but TCI will not cut off cable service, even if
> there is a protracted legal fight, said Debbie Luppold, executive
> director of franchising and local government affairs for TCI's Northwest
> division.
> Luppold said the decisions might threaten the rollout of its cable modem
> Internet service in much of Multnomah County. It's already available in
> limited areas in Washington County.
> "What we choose to do with our plant and the investment we choose to
> make in this market is dramatically impacted," Luppold said.


If we have a fantastic Internet and Java platform that also happens to
run core productivity applications like Microsoft Office, we've got
something pretty interesting.
-- Steve Jobs to Fortune magazine, 11/98