AT&T-MindSpring Pact Worries Dingell

1/02/2000 7:00 PM Eastern

Washington -- AT&T Corp.'s open-access agreement
with MindSpring Enterprises Inc. appears to be costing the cable industry the support of a
key House Democrat: Rep. John Dingell of Michigan.

Dingell outlined his concerns about the agreement in a pair
of letters sent Dec. 17 to Federal Communications Commission chairman William Kennard and
AT&T chairman C. Michael Armstrong.

AT&T replied last week, requesting a chance to explain
the plan in person, "and we have no problem with" scheduling a briefing, a
Dingell spokesman said. He added that AT&T's letter "didn't address the
questions in detail."

Kennard also replied, but the House Commerce Committee
spokesman said there would be follow-up conversations seeking more detail.

Dingell is sponsoring a bill (H.R. 2420) with Rep. Billy
Tauzin (R-La.) that would deregulate Baby Bells' provision of Internet access while
refraining from imposing Internet open-access conditions on cable.

But Dingell suggested that it was time to reconsider that
approach after the AT&T-MindSpring agreement because in that agreement, the cable
industry no longer claims it is unable to accommodate more than one Internet-service

"AT&T is essentially abandoning that claim, as
well as other technical and economic arguments against open access," Dingell said in
his two-page letter to Kennard.

Dingell, a feared past House Commerce Committee chairman,
is currently the panel's ranking member. He could retake the gavel next year if House
Democrats pick up five seats in the November elections.

Tauzin, chairman of the House Telecommunications
Subcommittee and possibly chairman of the full committee next year, has said often that he
believes promoting Baby Bell-cable competition in data markets was preferable to imposing
common-carrier regulation on cable.

In his letter to Kennard, Dingell urged the FCC to use
AT&T's apparent about-face on technology restrictions as the basis for
re-evaluating the FCC's stance of not interfering in the cable-access debate.

"Whatever your hesitation to commence such an open and
public process might have been before [the AT&T-MindSpring agreement], surely,
AT&T's abandonment of the technology argument requires a fresh examination of
your premises," Dingell said.

Dingell added that the FCC should wrap up the review by
March 30 to give Congress time to enact new legislation, if necessary.

In his letter to Armstrong, Dingell raised several
questions about the competitive impact of the AT&T-MindSpring agreement on other ISPs
seeking to hook into cable facilities.

For example, Dingell said, the agreement calls for cable
access for multiple ISPs only as a result of talks between AT&T and the other ISPs.
Dingell indicated that cable access for ISPs should be automatic, just as it is for ISPs
that seek to use local phone facilities under FCC-required open-access rules.

"What requirements might AT&T seek to impose on an
ISP desiring to reach a customer through a cable connection that an incumbent
local-exchange carrier would be prohibited from seeking or imposing on the same ISP for a
DSL [digital subscriber line] connection? With the technological impediments to
multiple-ISP access no longer a factor, what is the public-policy basis for allowing such
disparate regulatory treatment?" Dingell asked.

He also questioned the need to postpone the effective date
of the AT&T-MindSpring deal until after exclusivity between AT&T and Excite@Home
Corp. expires in June 2002. He suggested that AT&T and Excite@Home could use the delay
to build a customer base that would be unwilling to migrate to another ISP after the
sunset on exclusivity.

"What explains this delay in open access when AT&T
[or the FCC, in the MediaOne Group Inc. merger case] presumably could override these
exclusivity arrangements with the stroke of a pen?" Dingell asked.

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