November 1, 1999 4:10 PM PST

AT&T trial weighs future of high-speed Net access

PORTLAND, Oregon--Federal judges in a high-profile appellate trial that could shape the future of the high-speed Internet today considered ways to define cable-based Internet services and who has the right to regulate them.

Telecommunications giant AT&T and see related story: The fate of fast Net
access government officials squared off today before a three-judge panel here at the 9th U.S. Circuit Court of Appeals. At stake is the question of whether Portland officials have the legal right to force AT&T to open its high-speed cable networks to competing Internet service providers.

The judges chose to take a broad look at the issue, primarily focusing on whether to consider cable modem-based Net access a "telecommunications service" or a "cable service."

If the court rules that cable modem services, such as Excite@Home--partially owned by AT&T--can be called a telecommunications service, AT&T may be required to open its networks to competing ISPs under existing "common carrier" laws. Those are the same rules that were used to pry open regional telephone company networks to competing phone firms.

AT&T lawyer David Carpenter argued that under federal law, local governments such as Portland do not have the authority to require "open access," especially if the court determines cable modem access is indeed a telecommunications service. Local franchising authorities only are allowed to govern cable services, he said.

"Our position is simple. In 1996 Congress…amended the Communications Act to prohibit ordinances just like this one," Carpenter said. AT&T lawyers also contend Portland cannot force the company to offer access to its high-speed networks if the judges decide to define it as a telecommunications service.

"If it's a telecommunications service, we win because federal law prohibits local authorities from regulating us," said Mark Rosenblum, AT&T's vice president of law.

Excite@Home, the leading Net-over-cable service, is not a telecommunications service, Rosenblum contends, and said local governments therefore can't regulate it.

Opponents fear that if Portland's position is upheld, the precedent could lead to a wash of similar rulings and regulations across the nation. National cable policy is "at stake" in this appellate case, Rosenblum said.

AT&T does not entirely object to opening its networks to unaffiliated ISPs. In the past, the telecommunications firm has held discussions concerning possible business deals involving Excite@Home, which some observers speculate might eventually include allowing competitors access to its cable networks. Yet the company would like to avoid what it considers government interference.

"What we're looking for is the ability to make market-driven decisions," Rosenblum said.

Win-win situation
Open cable access proponents said they believe that cable access will come out a winner even if the judges decide to define cable modem Internet access as a telecommunications service.

"If it's a cable service, then we have the authority to regulate it," said Erik Sten, a Portland city commissioner. "If it's a telecommunications service, then the FCC can require [cable firms] to open their networks just like the phone companies. Either way open access is the best policy."

The OpenNet Coalition, an ISP-backed group, also asserted its confidence that it will win regardless of how the judges choose to define cable Net access.

"It's almost heads we win, tails you lose," said David Kendall, an attorney representing OpenNet, also known for his role in defending President Bill Clinton through allegations of sexual harassment.

"We will have an open-access right if it's a telecom service through many statutory obligations now in existence. I think that's why AT&T didn't posture as a telecom service originally, because that would give us the right of access in a different way.

"It doesn't really matter to the ISPs how they get the high-speed Internet access," Kendall said. "What matters is getting the access."

A waiting game
The 9th U.S. Circuit Court of Appeals is notorious as the most liberal--and most often overturned--appellate court in the nation. Some observers suggest its left-leaning bent could benefit open access supporters.

The court also is known for its lengthy deliberations, often weighing in with rulings many months after a case is first presented. Experts doubt a final decision on the case will come this year.

Many legal experts expect the 9th Circuit's ruling to be appealed to the U.S. Supreme Court.

 

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