Aki Namioka
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Negotiating Open Access with AT&T Aki Helen Namioka  is a member of the Seattle Citizen's Telecommunications and Technology Advisory Board and outgoing President of Computer Professionals for Social Responsibility.
 

Aki Helen Namioka

Cable provider TCI was recently acquired by ATT, which lays the groundwork to create the world's largest telecommunications monopoly. This acquisition means that many cities that had franchised cable service from TCI had to authorize the transfer of that franchise to ATT. This placed a number of cities around the country in the position of influencing this merger -- and put community based organizations in the position of influencing their city's decision-making process. Recently, the City of Seattle had two opportunities to negotiate with TCI cable over concessions in their current franchise agreement. The first opportunity: TCI failed to meet the date by which they had promised to build-out the entire Seattle service area with advanced infrastructure, per their franchise agreement signed three years ago.

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Aki Namioka and husband Erik Nilsson, a   long-time CPSR member, and CPSR Executive Director Duff Axsom during a break at the 1998 CPSR "One Planet - One Net" symposium and joint annual meeting held at MIT in Cambridge, MA. For more information on the conference, see www.ctcnet.org/confrev.htm
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During the CPSR business meeting last October, Coralee Whitcomb (incoming President in June '99), Jeff Chester from the Center for Media Education, and Awards Banquet keynoter Einar "Steff" Stefferud all helped to develop the national organizational policy agenda for the coming year.
The second opportunity: TCI and AT&T asked the City to approve the proposed buy-out of TCI by AT&T. Coincidentally, both events came to the attention of the City at the beginning of the year. Many local activists saw this as a joint opportunity to leverage even further concessions from TCI than were negotiated in the earlier franchise agreement. Unfortunately, this didn't happen.

On the top of the list of concessions was the desire to open AT&T's cable modem infrastructure in Seattle to all providers. The issue most important to activists was open and equal access to all Internet service providers (ISPs) ranging from small, local commercial ISPs to nonprofit organizations such as the Seattle Community Network. The City was already a test market for the @Home Internet offering via TCI's cable infrastructure. For high-bandwidth offerings such as DSL provided by the local phone companies, wire connection and ISP service are purchased separately. In contrast, TCI offered Internet service only through @Home, a company founded by a consortium of investors including TCI. When the franchise agreement was signed three years ago, the huge opportunities and popularity of high-bandwidth Internet access via cable was not anticipated. Therefore, at that time, accepting @Home as the only high-bandwidth service over the cable infrastructure didn't seem unreasonable.

However, the landscape had changed dramatically in three years. The importance of allowing fair, open, and equal access to the cable modem infrastructure was obvious to a wide range of concerned citizens and local ISPs. Constituents expressing concern included the City of Seattle's Citizen's Telecommunications and Technology Advisory Board (CTTAB). Members of CTTAB and other activists were aware of an earlier recommendation in Oregon issued by the Mt. Hood Cable Regulatory Commission (MHCRC) which stipulated open and equal access to the cable infrastructure as a requirement for transfer of control from TCI to ATT. The Portland City Council passed this recommendation. Spurred on by the bold move of MHCRC and the City of Portland, Seattle citizens approached the city with a similar proposal. However, AT&T and TCI soon made it clear that the Portland decision was unacceptable and they subsequently sued the City of Portland claiming they had no right to put such a requirement in the transfer agreement.

Unfortunately, the Seattle City Council got cold feet. Portland appeared to be headed towards a legal disaster with AT&T's suit, so the Seattle City Council decided to try and negotiate an agreement that would not precipitate a similar lawsuit. The Council had already heard from a number of concerned citizens and ISPs in public hearings, so it was difficult to dismiss the concerns altogether.

However, as is the case with most negotiated agreements, the results were less than satisfying. TCI agreed to allow subscribers of their @Home service to get on the Internet without having to go through the @Home portal (i.e., you don't see the @Home screen). In addition, all ISPs can obtain access interconnection points to the @Home infrastructure, thus enabling them to provide the same high-bandwidth access that @Home can offer. This technically provides "equal access" to TCI's infrastructure. However, if a consumer wants to use an ISP of their own choice and not go through @Home, they will still pay the same price to TCI as if they were using @Home anyway. Thus, it will cost the consumer more to use an ISP of their choice, if that choice is any provider other than @Home.

For example, a consumer would first pay $40 per month to get access to the @Home infrastructure -- the onramp. Then, in addition to that cost, the consumer then pays another $20 per month or so in addition for an independent ISP totaling $60 per month for high-bandwidth access over cable. However, if that consumer simply chose to use @Home as their ISP, all they would pay is $40 per month that's it.

In other words, the city did not ask TCI to unbundle the price of Internet service and access to their cable infrastructure. Unbundling is a key strategy for regulators at all levels to ensure broad competition in telecommunications. However, the concept seems to have been missed when it comes to cable, even though AT&T clearly intends to use its acquisition of TCI to broaden its dominance in the telecommunications marketplace.

In the words of Seattle Councilmember Nick Licata, a vigilant supporter of open access: "[Unbundling] is an important issue. It would be best if a subscriber would pay one price for AT&T's cable hookup and then another for the @Home Internet service. I would like the City to require that price structure on AT&T. But the city cannot require this unbundling because the Telecommunications Act of 1996 does not make cable service a utility."

In total, the City Council passed four pieces of legislation to handle the rebuild and transfer of control. They are:

  1. TCI Rebuild Extension
  2. Approving Transfer of Control from TCI to AT&T
  3. Cable Customer Bill of Rights
  4. Resolution to explore alternative ways of providing the citizens of Seattle telecommunications services

More information can be found at www.ci.seattle.wa.us/cable/cableleg.htm .

One interesting criteria included in the Transfer of Control legislation was a series of "triggers" to reopen the franchise. These triggers would empower the City Council to re-negotiate franchise terms if certain conditions were to change. One such trigger would be changes in federal legislation that would allow the City to impose pricing unbundling criteria on AT&T. Another trigger event might occur at such a time that AT&T captures more than 2/3 of the high-bandwidth market through cable-modem or other high-bandwidth offerings (e.g., DSL). These reopener provisions are unique to the City of Seattle and members of the Council consider these concessions to be a victory for public-interest. However, from another public interest perspective, very little benefit was obtained from these "concessions." The $20 per month (or more) "penalty" to use an independent ISP is a huge barrier to open and equal access.