For Want of Care, Access Wars Arose


Three votes: If the cable provider in Portland, Ore., had a better relationship with three regulators there in 1998, attorneys and government-relations troubleshooters for cable companies might not be scrambling all over the nation to stamp out flare-ups related to the open-access issue.

Three votes would have given cable a simple majority.

After all, cable lawyers stated, "The law is on our side." Transfer proceedings can only address three specific performance areas, and open access is not within them.

Then why the continued fights?

A closer, more cordial relationship with regulators-not just in Portland, but elsewhere-and this issue might not have taken root.

A year-and-a-half into the fight, some operators are reviewing their strategies and stating flatly that relations must change at the local contact level.

Indeed, some strategies have changed, based on some of the victories cable is now experiencing in political battles to convince state and local legislators that Internet regulation is not in the communities' best interest.

But for some companies, it took this mallet to the head to realize that they had a role model right in their hometown: the local telephone guy. They know that guy now. He (or she) is the one showing up even in 10,000-subscriber towns to argue open access, and the council members all know him. The cable guy, on the other hand, might be a regional official or a local guy new to the area assigned by the latest corporate parent.

Joe Camicia, vice president of government relations for Charter Communications Inc.'s Western region, has been both lobbyist and lobbied. In the 1980s, he was a city councilman in Alameda, Calif.

Camicia recently recalled how he would receive notes from a local voter, commenting, for example, on the way he had handled a hot local issue. Then one day, the constituent appeared at the council meeting. She was the rep for the local phone company.

"How could I vote against her? She was my fan," Camicia joked. But he added that she had made her point: She was part of the community, and she cared. And she made that point before she ever approached the council.

Current city officials confirmed that part of cable's problem in the open-access debate is the result of years of a "nonexistent" relationship.

"We had one telephone representative whom we called an unofficial city official,'" one source said. "The flip side was our cable operator, which didn't spend the time or a dime developing a relationship with elected officials, except when there was a crisis."

When the open-access controversy surfaced, cable often had no reservoir of goodwill to fall back on when it approached local mayors and councilmen.

As a result, cable's arguments to city and county officials that open access would undermine the deployment of broadband service, that it would not work technically or that it would be illegal ran headfirst into a "credibility problem."

Even when the local cable contact had a relationship with local government, it was sometimes soured by a company's corporate mentality.

In Portland, for example-where the first shots in the access wars were fired when the city ordered AT & T Broadband to unbundle its network-officials said they'd always enjoyed a good working relationship with their previous operator, Tele-Communications Inc.

That began to change after AT & T Corp. assumed control of the MSO in late 1998. The first indication of trouble came when the city informed AT & T that it was looking at the open-access issue as part of a transfer of TCI's franchise. AT & T responded immediately with a letter in which it declared that the city had no authority to impose such a condition.

The situation began to worsen when it became apparent that, unlike officials with TCI, AT & T representatives in Portland did not have the authority to make decisions, commissioner Erik Sten said.

"We had good relations with the TCI people," Sten said. "But all that changed when AT & T took over. You got the sense that the AT & T people were told to go in there and sell the no-open-access line. But they had no authority to negotiate. When you talked to them, they would take notes, and then have to go off and call [headquarters in] New Jersey."

Educating a city council on its powers is a bad strategy, agreed Lynwood Evans, regional corporate counsel for MediaOne Group Inc. The company recovered on the open-access issue in some Southern and Eastern cities with a good reactive strategy.

Speaking from experience, he joked to a recent meeting of cable professionals, "Keep your lawyers quiet. When you get to the point where you're arguing legislative capabilities, you've lost it."

Evans fought access requirements in Richmond, Va., where the company lost, and in Henrico County, Va., where it won.

He outlined the factors that worked for and against the company in those places.

Richmond is ruled by a council with four lawyers on it. So arguments tailored to highlight the legal ambiguities of regulating the high-speed-data platform were compelling to them. The legislative process there also gave the operator more time to develop a fight plan.

The company gave 80 hours of demonstrations to key decision-makers. Also, few local Internet-service providers showed interest in the issue.

What local contact they hadn't made, they bought. MediaOne contracted with a local state Senate veteran as a lead consultant. And the MSO gained the support of key staff members in Richmond.

By contrast, local ISPs marched in to voice their concerns in Henrico County, where staff members were "lukewarm" to cable's concerns. The chair of the county council, Pat S. O'Bannon, was advised by Washington law firm Miller & Van Eaton, and she was committed to access, Evans said.

But perhaps most fatal, the operator didn't know the regulator's modus operandi, Evans added. The board there is used to "closed-door politics," but MediaOne took every opportunity it had to discuss and create pressure about the issue. The officials made it clear that they did not appreciate the tactic, he said.

The county board approved the transfer of MediaOne to AT & T with the proviso that open access be offered by the end of the year.

The trend toward industry consolidation may also have hurt MediaOne in Henrico, O'Bannon indicated. She believes "bigger isn't necessarily better." Years ago, she said, Continental Cablevision Inc. ran the local system and made customer service the cornerstone of its local operations. But after Continental sold out to MediaOne, the billing operations were moved out-of-state. "Now, when there's a customer concern, people have to call Oklahoma," O'Bannon added. "They feel disconnected."

Moreover, MediaOne didn't make any friends when it "dragged its feet" in advertising senior-citizen discounts, finally agreeing to send out a limited number of postcards. The lack of broad senior discounts "really came back to bite us," Evans said to the industry group.

Some city officials believe cable's intransigence concerning open access has at times wiped away generous amounts of goodwill generated by a jurisdiction's previous operator. Others said the industry hasn't helped by filing lawsuits or threatening to withhold promised rebuilds.

"It's that sense of arrogance that filters down to local officials," said Paul Trane, head of Telecommunications Insight Group in Somerville, Mass.

In Montgomery County, Md., for example, where open access remains very much alive, regulators said the industry squandered the high consumer-satisfaction levels enjoyed during the days when Hauser Communications owned the system.

Since then, however, the system was sold to SBC Communications Inc., which gave consumers endless rate hikes "with nothing to show for it," then to Prime Cable, which racked up 47,000 more consumer complaints during one six-month period than for the comparable period the year before, the local cable regulator said.

"We're drowning in complaints," county cable administrator Jane Lawton said. "It doesn't help [operators] to then go around telling people you're going to select their ISP for them."

Adding to cable's inability to sway regulators and elected officials is a history of skyrocketing monthly bills and a string of "broken promises." As a result, county officials had little reason to buy into cable's arguments about open access, Lawton said.

"It's not goodwill, but rather, can you trust what they say?" said Lawton, immediate past president of the National Association of Telecommunications Officers and Advisors. "If you trust people, it goes a long way when you're talking about a public-policy issue like open access. Otherwise, it's harder to believe that it's not possible and harder to believe the kind of impediments that [operators] are claiming are out there."

In Fairfax, Va., a wealthy suburb of Washington, D.C., city officials voted last year to transfer 5,600 Media General Inc. subscribers to Cox Communications Inc., but they amended the agreement to require Cox to unbundle its newly acquired network.

Spearheading the access debate has been councilman Scott Silverthorne, who believes Cox hasn't helped itself with its lack of community outreach since taking over the system.

"We always had a solid relationship with Media General, a partnership with the council," Silverthorne said. "With Cox, we have a cordial relationship, but I wouldn't say they've done a good job of reaching out to the community or to local officials. But even if it had been Media General, with all of their community outreach, open access would have still been the right policy."

In Somerville, Mass., a suburb of Boston, Mayor Dorothy Kelly Gay denied AT & T's request for a transfer of the franchise held by MediaOne, questioning the long-distance carrier's ability to assume "direct management of a cable system in the Commonwealth of Massachusetts, or elsewhere."

MediaOne responded by threatening not to upgrade its network in Somerville after Kelly Gay asked the Federal Communications Commission to decide whether the city

had the right to consider open access as part of its transfer review.

"The only time they're interested is if they want a renewal or a transfer," Trane said. "Otherwise you never see them. That certainly doesn't do anything for the relationship between the operator and the town."

But some segments of the cable industry indicated that they have finally been convinced to pick up the political gauntlet. State associations have put their tools to good use to shoot down the majority of bills that hit state legislatures this season.

The attack plan on access by the Virginia Cable Telecommunications Association offers a good template. The highlights, outlined by association president Kathryn Falk:

  • Start early. By close monitoring, her association got wind of an access bill a full year in advance.
  • Use available information, like investment and job-creation data, to show regulators what you mean to constituents.
  • Get the opponent's message.
  • Develop simple talking points.
  • Make sure everyone offers a consistent message.

She also recommended a "grass tops," as opposed to grassroots, lobbying effort. Find local and state officials friendly to your cause and get them to write to fellow legislators.

Because of the advance warning, Virginia operators were able to score a publicity coup as the legislature convened. The VCTA contracted with Virginia Business magazine for an insert extolling cable's products and impact, which hit the stands just as lawmakers took up the issue. The association also made up computer mouse pads with the image of Thomas Jefferson and his quote, "He who governs best, governs least," and had them distributed in the capital.

Falk touted e-mail as a great lobbying tool. You get your point across, and you "can't be grilled" in return, she said.

Political savvy also means knowing your market. The Florida Cable Telecommunications Association made good use of the large Cuban population when it was lobbying against open access in Miami's Dade County.

In its most effective ad, members said, a Hispanic couple was discussing the oppressive effects of access regulation. As a tag line, the wife asks the husband, "Isn't that why we left Cuba?"

Camicia said his division at Charter is beginning to use all of the weapons at its disposal. It regularly updates employees on industry issues. For the open-access debate, ad-sales reps collected endorsements from clients urging a "no" vote on the issue where it is raised. Further, employees are urged to call regulators and express their personal concerns, as voters and workers, about the impact of negative legislation.

Lobbying efforts are turning away from professional staff members and to the elected boards who make the final decisions. The operator has held fund-raisers for local candidates who support the cable industry. Voter-registration drives were held at work sites, and employees volunteered to work in political campaigns.

Some local officials have even been hired as consultants. City-cable interaction has become more divisive, even in cities where open access isn't an issue. Often, Camicia said, cities hire consultants to advise them, and the professional's first advice to council members is: "Don't talk to the cable guy."

But if an operator has a good relationship with a respected mayor or councilman in a neighboring city, that official can get to the city councilmen at regional boards on which they both serve.

"Government and community relations are what should be done before we ever enter the courtroom or the council chambers, or sit down at the negotiating table," Camicia said.