March 11, 2002 1:40 PM PST
Behind the broadband access fight
In the last several years, this fight has moved into the high-speed Internet arena. With the heavily regulated Baby Bells on one side and the big cable companies on the other, that means loosening regulations for the Bells or tightening them for their competitors.
Today's debate is centered on the Baby Bell local phone companies, which were monopolies until the Telecom Act of 1996, when they were tightly regulated by state and federal governments. In the high-speed Net business, they must lease access to their local phone lines, and provide room in their central switching offices to rivals like Covad Communications that want to offer their own DSL (digital subscriber line) service. Regulators control the prices for these features, and as a result the local phone companies say they're losing money on their infrastructure investments.
By contrast, the big cable companies are viewed by regulators as video networks and aren't as tightly regulated despite their own historic monopolies. Until recently, the cable companies were allowed to offer high-speed Net service without having to share their infrastructure with anybody.
When AT&T started buying cable companies in 1998, the big local phone companies mounted an expensive campaign for "open access." If the phone companies had to share their wires with potential rivals, then the cable companies offering the same services should too, they argued.
After several years of fighting, that battle has diminished somewhat. The big cable companies have agreed to let outside ISPs such as Earthlink offer cable-modem services over their wires.
Next week, the FCC is expected to release a long-awaited ruling on how to classify cable Internet services. That decision will determine in large part whether companies like Comcast and AT&T Broadband will be forced by law to let other ISPs use their cable modem lines.
But the rules forcing their wires open still aren't nearly as strict as those facing the local phone companies.
That's led back to the Tauzin-Dingell bill, and the ongoing effort in the Federal Communications Commission to examine and diminish regulation of the Bells that might be hampering the progress of broadband. But critics say that will result in less competition and drive costs up for consumers.
The players in this intensely politicized industry have political budgets in the tens of millions of dollars, and their cries for a level playing field aren't likely to diminish.