Richard Riordan is not known as an Internet junkie.
Yet L.A.’s mayor has helped shape the debate over broadband access and brought national attention to an issue that otherwise might have been a local footnote.
Riordan’s position in favor of a closed-access system made headlines in June when three of his appointees to the Information Technology Commission resigned, leaving the five-member commission without a quorum. After the stir those resignations created, Riordan seemed to retreat slightly from his position, saying he was still learning about the issue.
Then late last month came the announcement that he was recusing himself from lobbying on the issue because of his wife’s investments in America Online, which has been pushing for an open-access system. Yet Riordan said he would continue to speak out in favor of a closed- or limited-access system. The lobbying ban does not extend to Riordan’s aides.
“It all seems rather bizarre,” said one lobbyist, who, like many reached on this issue, spoke only on condition that he not be identified. “First, he jumps to a position early on in the process, before all the reports and facts are in. Then he seems to back away from it when it starts backfiring. And then, most suspicious of all, he recuses himself from lobbying on the issue, but not his staff.”
Riordan and his aides maintain that the mayor has not shifted his position; he still favors a system in which AT & T; Corp. and other cable operators have exclusive rights to the cable broadband systems they have built. Riordan believes that by allowing cable operators exclusive use of their pipelines, they will be more willing to invest the millions of dollars needed to complete the rollout of broadband in the L.A. area.
“It’s not about open access, it’s not about forced access,” Riordan said last week. “It’s about what is the best way to get everybody connected to the broadband. And in that regard, I’m still leaning toward not having forced access (forcing cable operators to open their systems to Internet service providers).”
Information Technology Commissioner Rohit Shukla, who heads the Los Angeles Regional Technology Alliance, agreed that Riordan has not shifted position.
“What has happened is that a lot of information has been brought to bear on the issue,” Shukla said. “He still believes it is not the role of government to dictate a standard where the industry is still emerging, which forcing open access would do.”
Riordan’s “closed-access” stance can be traced to the beginning of the year, when the issue first arose in connection with the transfer of the cable franchise held by Tele-Communications Inc. to AT & T; (which purchased TCI last year). That’s when Riordan was approached by AT & T; Chairman Mike Armstrong and, according to various accounts, was convinced to adopt the exclusive franchise approach.
“Early on, the AT & T; folks got to his ear with a strong and persuasive argument that if the city were to weigh in on the open-access side, it would slow down the broadband rollout,” one industry observer said.
Riordan himself declined to comment on the impact that early AT & T; lobbying had on him. He said he got involved because his staff convinced him that it was a crucial issue for the city’s future. “If I knew then what I know now, perhaps I would have waited a bit,” Riordan said last week.
Right from the outset, Riordan’s stance put him at odds with the City Council. On Feb. 2, the council approved the transfer of the TCI franchise to AT & T.; But it also ordered the Information Technology Agency, along with Chief Legislative Analyst Ron Deaton, to develop a plan for open access and report back to the council within 90 days.
In response, Riordan sent a letter to the council on Feb. 16, approving the transfer but disagreeing with the council’s stance on the broadband access issue.
“I cannot support the ‘open access’ method as a policy at this early stage without further study,” Riordan wrote. “Open access to cable television systems by multiple providers of Internet access is one potential way to encourage a competitive market environment to consumers, but it has not been determined to be the best method. The arbitrary selection of a policy of ‘open access’ without thorough research and evaluation is premature and inappropriate.”
The focus then shifted to the Information Technology Agency, which was developing a report on broadband access. According to several sources, Riordan and his aides, particularly Chief of Staff Kelly Martin, repeatedly tried to lobby the five commissioners not to adopt an open-access policy as the council had directed them to do.
According to one of the former commissioners, Riordan or his aides called up commission members repeatedly, starting in January.
“He let it be known where he stood,” the commissioner said.
Those on both sides described the lobbying as “heavy-handed,” or “strong-arming.”
“He tried to dictate to people who had spent a whole lot more time on the issue what he wanted,” one lobbyist said. “And he was completely against where they were going.”
Then, just before release of the commission report, three commissioners resigned. Alan Arkatov and Joyce Emerson cited personal reasons, but Bob Duggan said he was resigning because he favored open access and Riordan did not.
Riordan came under immediate fire from the AOL and local phone companies, which claimed he had adopted an anti-consumer stance.
With the three resignations drawing headlines, Riordan’s first public statements on the issue indicated a willingness to back off the strictly closed-access view.
“There has to be some sort of open access,” Riordan said on KFWB-AM 980 the week following the resignations. “The question is whether it should be the marketplace where people negotiate for open access, or whether the federal government not the local government passes a national policy doing things similar to the way utilities are regulated.”
Riordan continued to make similar statements in public until July 29, when he suddenly announced that he was recusing himself from lobbying on the issue because his wife, Nancy Daly Riordan, holds shares of AOL. She also owns shares of TCI, which has since been purchased by AT & T.;
The disclosure struck many at City Hall as questionable.
“Look,” one lobbyist said, “there is no way that in all these months he or his staff didn’t know about his wife’s investments. It was not a problem in January, nor was it a problem when the showdown at the ITA came in May and June. Only when it became clear that he was not going to get the council on board did he make the announcement. It is a convenient way out of an issue he was losing.”
Riordan’s recusal did not preclude him from speaking out on the issue, which he has continued to do. In a recent Los Angeles Times interview, Riordan said he was “still inclined to be against open access.
“The main reason to be against open access is that cable companies will not put the hundreds of millions of dollars needed to connect homes and businesses to broadband Internet service without assurance that they can earn a return on that investment,” Riordan said.
Ironically, the marketplace may be about to offer Riordan a way out. Last week, The New York Times reported that AOL and AT & T; had entered into talks about granting AOL access to AT & T;’s broadband network. If an agreement is reached, much of the open-access/closed-access debate could be rendered moot.
