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COMPUTING

AOL could change stance on cable access, FCC official says

January 13, 2000
Web posted at: 8:49 a.m. EST (1349 GMT)

by Jennifer Jones

From...
InfoWorld
Image

(IDG) -- In light of its merger with Time Warner, America Online may have a change of heart on its stance that government action is needed to open up the broadband cable industry, Federal Communications Commission (FCC) Chief Technology Officer Stagg Newman said Tuesday in an interview.

But a representative of the AOL-backed openNet Coalition, which has been pressing for government intervention to open cable systems, said that AOL remains dedicated to the coalition's cause.

Until it joined with Time Warner on Monday, AOL lobbied hard to have government regulators involved in the unfolding broadband cable access industry. Now the company is on the same page with the FCC, which has wanted, at least until now, to stay out of that emerging market, the FCC's Newman said.

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"In the past, AOL has advocated [the] FCC becoming much more proactive in the broadband market," Newman said in an interview.

In fact, FCC just last fall in a comprehensive report on broadband issues put AOL in the camp of companies clamoring for "mandated open access."

That is, AOL and others wanted the FCC through regulatory action to pry open the broadband cable market, dominated by AT&T with an exclusive contract with ISP Excite @ Home.

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Though the FCC has not intervened, AT&T officials said in early December that the company would not renew the exclusive Excite @ Home deal, which expires next year.

AOL and other ISPs such as MindSpring Enterprises worried that, without government intervention, cable franchise owners would control Internet content and navigational services, according to the FCC report.

However, AOL and Time Warner executives on Monday praised the promise of free-market forces in the broadband access issue.

"In listening to the press conference, what they have said on open access over cable is what the Commission has wanted all along," the FCC's Newman said.

Newman referenced a mid-December speech in which FCC Chairman William Kennard said, "Unless a compelling case can be made for government action - a failure of the marketplace to maximize consumer welfare - then we should give the marketplace a chance to work."

Along with overtly targeting AT&T's exclusivity deals, AOL has been generally unprepared for the advent of broadband, Newman said.

"All of their content was focused on the narrow band world. And more than a delivery architecture, they needed to develop broadband content. Monday's announcement does wonders for that," Newman said.

AOL worked largely through lobbying groups such as the openNET Coalition to push for more government measures to open up the cable market.

openNET co-director Greg Simon said in a statement that even after the merger, AOL is still pushing for open access.

"[The] announcement by AOL and Time Warner is a wake-up call to the cable industry. The No. 2 cable company has joined AOL, a leading advocate for open access and a continued member of the openNET Coalition, to support consumer choice of Internet Service Providers over cable broadband networks," Simon said in the statement.

Simon said that that openNet will lobby federal regulators to get open access commitments from AT&T and cable company Media One in its ongoing merger review.

The organization will do the same in the AOL Time Warner merger, Simon indicated.

"We will continue to urge the federal government to make open access the rule for the entire cable industry," Simon said


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