When parallel service is not there
By Scott Bradner
Network World, 08/30/99
If it's true that one is known by one's enemies, then you might want to take a close look at who is fighting to force AT&T to open its new cable TV infrastructures to competing ISPs. For me, it's almost an autonomic reaction - if the local telephone companies are in favor of something, then I should oppose it.
As regular readers of this column know, I've been a longtime, happy user of MediaOne's cable modem-based Internet service. I've been watching - and cheering on - the growing availability of cable modem Internet services around the country. I think that others should have the same type of high-speed and reliable Internet connectivity as I've been fortunate to have. The Wall Street Journal reports that Kinetic Strategies of Phoenix estimates there are now just about a million of us cable modem Internet service subscribers and that the service is available to about one-third of all homes that are passed by the cable infrastructure.
But that means that two-thirds of the cable infrastructure does not or cannot support cable modems. Thus, I was enthused when AT&T spent almost $150 billion to purchase cable TV companies with the
specific aim of offering Internet and voice services and when the carrier committed to spend the very large sums needed to bring much of the current infrastructure up to a level where it can support these services.
But now we are seeing a number of organizations, ostensibly in the name of consumers, fighting to force AT&T to allow other ISPs to use the infrastructure that AT&T wants to upgrade. The argument is being made that AT&T will have a monopoly on Internet service if this is not done. But this argument misses two things: 1) There is a parallel infrastructure that can be used to provide high-speed access, and 2) the effect of the reduced incentive for AT&T to invest all that money if it thinks it cannot get a good return.
As the head of the Federal Communications Commission noted, digital subscriber line (DSL) services, which in some ways are even better than cable modems, seem to be mostly offered by the phone companies where cable modem service exists. Even phone companies can sometimes recognize competition when they see it.
It seems to me that the direct result of forcing AT&T to open its cable plant would be to slow to a crawl the upgrading of the currently unsuitable two-thirds of the infrastructure and reduce the pressure on the telephone companies to deploy DSL. Tell me again how reducing choice is good for the consumer.
Note also who it is that is on the consumer's side: America Online, whose ISP business might be impacted, plus some competing ISPs and local phone companies. The latter are quite well known for their pro-consumer track record.
Disclaimer: Harvard, in spite of its reputation, tries to be pro-consumer, but the above reaction is mine.