Broadband access has been one of the hottest issues at City Hall this year, with the major telecom players spending more than half a million dollars in lobbying fees.
And that’s just for the preliminary rounds. The real battles lie ahead or do they? A recent agreement between two of the major opponents could render the issue moot.
As the nation’s second largest market and by far the largest one to debate the issue of broadband access, L.A. has become the center of national attention. On one side are the cable companies led by AT & T; Corp. that want to maintain exclusive access to the cable broadband networks they are now spending billions of dollars to build out. On the other side are Internet service providers, led by America Online Inc. and local phone companies, that want access to the broadband cable lines, which have emerged as a preferred mode for high-speed access to the Internet.
“Cable is no longer just in the business of providing television to consumers. It’s now branching into voice and data,” said Jesse Juarros, assistant general manager for the city’s Information Technology Agency. “And when it comes to accessing these broadband services, L.A. is the eye of the storm, absolutely.”
Most of the lobbying has focused on two precursor events: the transfer of Tele-Communications Inc.’s cable franchise to AT & T; (which bought TCI last year) and a report on broadband access policy issued in June by the city’s Information Technology Commission. That report recommends against opening up broadband cable lines to non-cable providers.
The next step is the City Council. By now, hearings would normally have begun in the Information Technology Committee, but in a surprise move last month, L.A. City Council President John Ferraro stripped Councilman Mark Ridley-Thomas of the chairmanship of that committee, bringing in newly elected Councilman Alex Padilla in his place. That has delayed the start of hearings at least a month or two.
That delay could turn out to be crucial. By the time the issue meanders its way to the floor of the L.A. City Council perhaps later this fall much of the conflict could be rendered moot. That’s because America Online, the nation’s largest ISP, reportedly is in talks with AT & T;, soon to be the nation’s largest cable provider. If AT & T; agrees to open up its cable networks to AOL, it could set the framework for a marketplace solution to the broadband access tussle.
“If AT & T; and AOL reach agreement, it will change some things dramatically,” said Richard Lichtenstein, a lobbyist who previously represented AOL but who now represents GTE Corp. “Some of the main issues would be taken off the table and many players would be taken out of the game. It would turn down the flame.”
Whether the access issue would go away entirely is another matter. It’s unclear whether the agreement with AT & T; would include other Internet service providers and such an agreement is also likely to leave local phone companies like Pacific Bell and GTE out in the cold.
“Open access does not mean slightly ajar,” said Pacific Bell spokesman Bill Mashek. “It should be open access for everyone, not just for those who form alliances with AT & T.; There are 600 Internet service providers in California including one that we operate. They should all get a shot at the cable lines and we’re going to continue the fight to make sure they all get that shot.”
