Cable Eyeing AOLs High-Speed Web Efforts

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Newport, R.I. -- The cable industry is monitoring America
Online Inc.'s efforts to require cable operators to provide equal access to
Internet-service providers.

Under AOL's plan, cable's high-speed Internet
services would have to be configured so that subscribers could choose among @Home Network,
Road Runner and AOL as their ISP, according to sources familiar with AOL's lobbying
efforts at the Federal Communications Commission.

The proposal, according to cable sources, would allow AOL
to siphon Internet-access revenue from ISPs that are affiliated with cable operators.

"That's what it's all about," said
James Robbins, president and CEO of Cox Communications Inc., after speaking at the New
England Cable Television Association's annual conference here last week.

Several cable sources referred to AOL's proposal --
which AOL chairman Steve Case personally presented to FCC chairman William Kennard --
saying that it would require cable operators to "unbundle" their networks,
offering pieces for resale under the kinds of mandates that apply to phone networks.

"Making the subelements of the overall network
available for resale is what they want to do," said Ron Cooper, MediaOne's
executive vice president of operations.

Phone companies are common carriers, which are generally
prohibited from controlling access to their networks. Cable systems, in contrast, are not
common carriers, so they can generally block access to their networks.

John Sie, chairman and CEO of Encore Media Group, said he
was concerned that AT&T Corp. might be forced to treat Tele-Communications Inc.'s
cable systems as common carriers as a condition for gaining regulatory approval of the $48
billion merger.

"The question of network unbundling is a critical
factor," Sie said. "I think that it would be a very chilling effect if, in order
to get the AT&T-TCI merger, you've got to become a pseudo-common carrier on the
platform. That would be a death knell for any investment, any innovation ."

Sie said that because cable networks were built with risk
capital, rather than with phone-ratepayer money, they should not be pried open for resale
by federal regulators.

Cooper said that although he was unaware of AOL's
specific demands to federal regulators, "network unbundling is a key issue that
we're keeping a close eye on in Washington."

Cooper said MediaOne has been spending $1 billion per year
on its network, in part to offer high-speed Internet access.

"That investment can't be done in an environment
where there is a significant threat of common-carrier status or network unbundling,"
he said.

AOL's corporate-communications department declined to
discuss the issue.

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