AOL, ISPs Ask For 'Light Touch' From Lawmakers

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April 13, 1999 (12:34 PM EDT)

AOL, ISPs Ask For 'Light Touch' From Lawmakers

By Mary Mosquera,

WASHINGTON, D.C. -- America Online CEO Steve Case Tuesday urged a "light touch" by government to prod cable companies to open their networks so independent ISPs can offer high-speed Internet access via cable modems.

The hearing before the Senate Commerce Committee on expanding consumer access to the Net was the first round in a battle between the only two wires directly to the customer. Both cable and telecommunications companies are vying to see who can get the most customers in the future.

CEOs Charles Brewer of MindSpring, William Schrader of PSINet, Solomon Trujillo of U S West, and James Robbins, chief operating officer of Cox Communications, also testified.

ISPs want Congress to require cable companies to allow ISPs other than the one affiliated with the cable-modem company to offer high-speed access. The full court press is a result of AT&T's acquisition of cable company TCI and its At Home cable-modem service. AOL, MindSpring, and U S West are part of the OpenNet Coalition that calls for open cable networks.

"Instead of offering consumers choice, cable is requiring consumers who want a high-speed cable connection to buy the Internet service affiliated with the local cable company -- even if they have another Internet service they like and want to keep," said Case.

Consumers who want Internet service other than cable's will have to pay twice or not get it at all. ISPs just want parity, he said.

Sen. John McCain (R-Ariz), the committee's chairman, called the hearing because he is concerned consumers may have a limited choice to access a high-speed Internet provider. He said he would introduce legislation asking the Federal Communications Commission and the Commerce Department's National Telecommunications and Information Administration to offer recommendations.

Cable and telephone are the only wires to the customer, and both industries are investing in and installing updated technologies for faster access to advanced telecommunications. The cable industry, which is not regulated, is developing cable modems to provide high-speed Internet access over the same line as a consumer's cable-TV service.

Phone carriers, which deliver high-speed Internet by DSLs, are required to open their network and lease their local loop and other elements to new entrants to provide competition. Local phone carriers also cannot offer long distance that covers broadband Internet access.

Case said he opposes regulating the Internet . "But the broadband infrastructures on which the Internet rests -- whether cable, telephone, or other -- must be open," Case said.

He did not propose regulation of cable similar to telecommunications, but "a kind of light touch at the infrastructure level," such as a requirement for nondiscriminatory use and resale at a reasonable price.

"The only way to have a competitive market is to allow competitors to share the wires leading to customers' homes," said MindSpring's Brewer.

Telephone carriers say they are hobbled by regulations that do not allow them to transport data across artificially imposed boundaries, making investment in broadband unprofitable. With regulatory relief, U S West will deploy broadband to serve 2 million people throughout its region in the first year, Trujillo said.

Cable companies are pouring more than $10 billion into cable network upgrades this year, said Cox' Robbins. Cox has invested $4 billion to update and activate the return path of its cable plant.

"The mere suggestion from government that such risky investments could be subjected to old fashioned cost-of-service regulation would have a chilling effect on investments and slow down the rollout of these new advanced Internet services," Robbins said.

Last Friday, consumer groups Center for Media Education, Consumers Union, Media Access Project, and the Consumer Project on Technology also called for cable to open its network. They said they fear AT&T will become the gatekeeper to the Internet.