Intimidation Just Part of the Game for AT&T

Spokesman says mandated leased access to the telecom giant's upgraded cable network would remove incentive to make the necessary investment in western Colorado. Could this be de facto redlining?

by Patricia Fusco ISP-Planet Managing Editor [September 28-1999]

Grassroots politicking takes many forms in different organizations across the nation, "digesting" a vast diversity of issues, opinions, and principles. It's essential to maintaining the fun-filled free-for-all we call democracy—which in turn comprises the conscience of capitalism.

When it comes to broadband Internet access, a multitude of regional organizations have formed throughout the U.S. in an effort to make sure the chieftains of the industry provide their localities with the type of high-speed access they want and need.

Many local watchdog groups, such as Club 20 in Colorado, are particularly concerned with broadband because the abundance of high-speed connectivity options available to residents of the biggest U.S. citites are simply not available in the steppes of the digital divide. In such locations, the haves and have-nots of high-speed access are often separated only by a single thin strand of copper.

Established in 1953, Club 20 is a group of county and municipal legislators that live and work in the 20 counties that constitute the Western Slope of Colorado. The group uses its collective leverage to represent a diverse population—which includes resort areas like Aspen, Telluride, and Steamboat Springs as well as remote, rural areas like Gypsum, Carbondale, and Leadville—on transportation, environmental, and economic issues.

Forthright stand
At its annual fall meeting last week, Club 20 passed a resolution in support of leased access to cable networks. Despite substantial lobbying by AT&T, the group voted to promote nondiscriminatory access to cable networks in order to ensure that the region's educational and economic development doesn't slip into the vast crevasse of the digital divide.

Club 20 believes cable companies should be considered common carries, and as such, their networks should be subject to nondiscriminatory regulations like those governing the telecommunications industry.

Stan Broome, Club20 president, said people migrating to the region expect to have the same kinds of competitive choices for Internet access in Grand Junction as they did in Los Angeles. When they discover that phone quality is limited, DSL access impossible, and satellite services not feasible, they realize they've just stepped across the digital divide.

"The issue is really all about last-mile connectivity. We just want someone to level with us and develop a broadband plan for rural Colorado," Broome said. "More than anything, our petition is a cry for help."

A letter from Frank Galik, general manager of TCI Cablevision of Western Colorado, however, has upped the stakes of the public debate substantially:

Classic carrot and stick
Galik told the group that AT&T is currently investing $25 million on the Western Slope to start building a high-speed cable network. He added that Grand Junction, Colorado, home base of Club 20, would be the first area to get the enhanced broadband service later this year.

Having delivered the good news to the politically active group, Galik detailed the effects that proposed leased-cable-access regulations would likely have on the pending network upgrade:

"Offering high-speed Internet service on the Western Slope requires AT&T to spend a significant amount of its own risk capital to upgrade our network," Galik wrote. "We are committed to the Western Slope and are making the investment today. But if AT&T is forced to turn over our new network to the competitors who are pushing this resolution, what incentive will AT&T have to continue to invest in high-cost areas like the Western Slope? The market reality is that such government regulation will make new investments in high-cost area unfeasible."

The meaning of AT&T/TCI's comments isn't difficult to decipher: Defy our closed cable operations and you won't get any broadband access in your community. In other words, because the Club 20 resolution encourages that federal policymakers force AT&T to open its cable networks to competitors, the Western Slope may be redlined on the cable Internet access map.

Backfire danger
Ironically, if AT&T redlines Colorado's Western Slope—delaying deployment of cable access to the locality because Club 20 has publicly demanded leased access to their cable networks-AT&T's efforts to keep its cable networks closed to competitors may indirectly result in the opposite outcome.

Redlining is a form of discrimination that once brought the full fury of federal regulators crashing down on the telecommunications industry, resulting in the breaking of Bell Telephone's monopolist stranglehold on the U.S. marketplace.

Should federal regulators determine that AT&T took discriminatory action with regard to deploying broadband services in specific regions that opposed their proprietary systems, they would have little choice but to hasten governmental intervention in the issue to remedy the situation.

If AT&T redlines Broward County, Fla., Portland, Ore., San Francisco, Los Angeles, or any other pre-open access municipality, as they've threatened to do on the Western Slopes of Colorado, wouldn't federal intervention be the only countermeasure available to thwart the company's tactics?

Similar strokes?
When ISDN services were redlined to parts of Minneapolis in 1995, U.S. West quickly bowed to local political pressure and advanced its deployment of the speed-enhanced service to the entire Twin Cities metropolitan market.

The issue was brought to the attention of local legislators by Mike O'Connor, who operated a fledgling ISP out of his home. Through two weeks of on online politicking and 3,000 pestering e-mail petitions, U.S. West executives resolved to complete full deployment of their ISDN services by February 1996.

Since Digital Subscriber Line access is physically limited by distance, the telephone-based broadband service does not offer a solution to many remote and rural communities. Because wireless, satellite and terrestrial broadband systems are in their infancy, they do not offer viable competition to cable access, nor relief to the Western Slope's demand for broadband services now.

If cable-access redlining does not produce an FCC initiative to assure that specific regions, such as those represented by Club 20, are not disenfranchised from broadband services, perhaps the Justice or the Commerce Departments will step in to alleviate the discriminatory denial of services by AT&T.

—End