Access Champ Blasts FCC Broadband Report

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A leading proponent of open access declared the Federal
Communications Commission's recent Broadband Monitoring Report "intellectually
bankrupt" last week.

David Olson, director of franchising for Portland, Ore.,
said the report was skewed in favor of a cable industry that wants to keep
Internet-service providers off its broadband networks.

Olson, who also heads the Mt. Hood Cable Regulatory
Commission, accused the FCC's Cable Services Bureau of ignoring material detrimental
to the argument that open access would delay investment and deployment of broadband
technology.

It was the MHCRC -- a group that advises Oregon's
Portland and Multnomah counties on cable-related issues -- that triggered the unbundling
debate last year by urging the two jurisdictions to demand open access in exchange for
transferring their Tele-Communications Inc. franchises to AT&T Corp.

Among the material overlooked by the FCC were Wall Street
reports from Merrill Lynch & Co. and Goldman, Sachs & Co. determining that cable
operators "will actually make more money, and not less, as a result of open
access," Olson said.

"But not a word was mentioned [in the FCC report]
about this material," he added. "You would never know that it ever existed.
Instead, the citations were apparently designed to support a pre-existing
conclusion."

Olson said the report also does not identify local
franchising authorities, or participants in a series of "invitation-only" focus
groups, who presumably contributed to the document's conclusions. "They're
basing their conclusions on evidence we can't check," he added.

The National Cable Television Association said the report
was proof that "competition among telephone, cable, satellite and wireless-broadband
providers is speeding broadband deployment."

NCTA officials noted that for every city that embraces open
access, hundreds have voted to reject it. Moreover, while some municipal groups lobby in
favor of the concept, the National Governors Association and County Executives of America
have panned the idea.

FCC chairman William Kennard defended the report as an
"objective and detailed snapshot" of a developing industry where
"regulatory restraint continues to be warranted at this time."

Kennard added, "I'm sure the report will prove to
be a valuable resource to those seeking to understand the many competing issues and
interests that must be balanced to ensure that American consumers soon will be able to
receive advanced services at competitive prices."

The report found that despite having just 3 percent of the
market for Internet access, cable-modem service is already encouraging deployment of
asymmetrical-digital-subscriber-line services by the regional Bell operating companies.

It also concluded that market forces will ultimately force
cable operators to negotiate access deals with unaffiliated ISPs, thereby reducing the
threat of a monopoly over the Internet.

But that's the rub, according to some local
regulators.

Jane Lawton, cable administrator in Montgomery County, Md.,
said the FCC seemingly hopes that "not too much damage will be done" before
operators open their networks.

"That's craziness," she said. "[The FCC
is] not giving us any reassurance that they're looking at this issue below the
surface."

Lawton, former president of the National Association of
Telecommunications Officers and Advisors, said she was "disappointed" that the
FCC report failed to break new ground at a time when calls for open access are gaining
momentum.

In Montgomery County, for example, local officials and area
residents have begun asking staffers "where we stand on this issue," she added.

That could be bad news for cable. The county is part of the
Washington, D.C., region, where 60 percent of all adults are already hooked up to the
Internet, making the area the top spot in the nation for online services.

Meanwhile, NATOA board member Brenda Trainor questioned the
timing of the report's release, noting that the FCC characterized the document as
"preliminary."

"If it's 'preliminary,' and they
haven't gotten both sides, why are we releasing it now?" she asked. "Local
franchising authorities, as far as I know, haven't been interviewed for this. I think
it's another case of local governments being shut out of the process."

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