Consumer Groups Speak Out in Portland Oregon/AT&T Franchise Case

A local cable franchise authority's decision has exploded into a national debate about cable access to the Internet.

by Patricia Fusco and Brian McWilliams
of internetnews.com
[September 16, 1999]

In an amicus curiae brief filed this week, a collection of consumer groups made known to the U.S. Court of Appeals for the Ninth Circuit their support for the Portland, Oregon decision.

As friend-of-the-court, the Citizens' Utility Board of Oregon, Consumer Action, Consumer Federation of America, The Utility Reform Network, and the Utility Consumers' Action Network collectively represent the interests of consumers in obtaining unfettered and affordable high-speed access to the Internet.

First Amendment issue
The consumer groups believe that vigorous competition among multiple service providers of broadband Internet access benefits American consumers in two ways. First, truly competitive markets yield lower prices, higher quality of service, and increased innovation. Second, competition also promotes the First Amendment's objective to provide a free and diverse flow of ideas and opinions.

Contrary to the assertions of AT&T (T), the consumer groups believe that the closed cable access model does not promote free speech, but rather works to significantly hamper the Internet's potential for unfettered communications. The consumer groups believe that if AT&T is not forced to open its cable networks to competing ISPs, AT&T would likely be able to force consumers to accept its closed Internet system.

The consumer collective affirmed that openness is a matter of design choice for the Internet, not a technological imperative. The groups pointed out that despite AT&T's assurances of one-click access to the Internet, @Home (ATHM) subscribers may not speak or receive information with the same quality of service, if they attempt to communicate with providers who have not contracted to join the ranks of @Home's preferred providers.

Some connections are more equal than others
According to the consumer advocates, a user connecting through the @Home server may be able to connect with any location on the Internet, but not at the same speed. In the absence of open access, @Home subscribers would not be able to circumvent such discrimination against disfavored content.

Kevin Werbach, author of The Architecture of Internet 2.0, said that @Home's discriminatory content is a disservice to the free and open nature of the Internet.

"In effect, @Home is a closed network that runs on the IP protocol and interfaces with the public Internet," Werbach said. "The trouble with this vision is that it is not the Internet."

The consumer advocates allege that there is no way to obtain the same level of freedom of expression and the same speed and quality of service in the @Home closed model and that their sophisticated technology is not being deployed as a service to promote freedom. By no means are cable companies currently filtering domains to prevent consumers from reaching Web content, but they could.

Potential for abuse?
Cisco Systems Inc., (CSCO) the leading Internet hardware supplier, has advised cable operators that it can use quality of service controls to restrict the incoming push broadcasts from competitors as well as discourage outgoing access for subscribers.

In a sales brochure titled "Controlling Your Network - A Must for Cable Operators," Cisco Systems informed cable operators that "you could promote and offer your own or partner's services with full-speed features to encourage adoption of your services, while increasing network efficiency."

The consumer groups contend that Cisco technology can isolate network traffic by the type of application, even down to specific brands to "crimp the hose" of a cable data stream. The alliance further purports that caching technology may increase the performance of local data to produce preferential treatment for cable partners, and impair feeds on competitive Web sources.

Werbach said that @Home's closed network caches all of its own content as a matter of course. Because @Home caches content locally, in that way @Home's content will have better bandwidth than that of competitive content providers.

Confluence of interest
"Because @Home makes money through advertising and commerce partnerships, the company has little incentive to provide higher-speed connectivity to outside content," Werbach said.

The consumer alliance believes that the Portland decision is a policy judgment that is well within the jurisdiction of the city to make.

The groups also believe AT&T is a high-speed monopoly in motion because the company owns TCI, is a primary partner with Excite@Home and is poised to merge with MediaOne. The potential that some 57 percent of cable subscribers in the U.S. would be dealing either directly or indirectly with companies affiliated with AT&T, makes the telecommunications giant a cable access monopoly.

Milo Medin, Excite@Home chief technical officer, said the marketplace determines how cable companies use filters on their networks.

"If we did things like filter and play favorites with Web content, some of our competitions would take advantage of that and gain market share over us," Medin said. "The marketplace protects the interests of consumers better than regulations."

Who do you trust?
Scott Cleland, an analyst at Legg Mason Precursor Group, said the telephone wire is wide open and in cable it's completely closed. Because cable networks can close out Web content does not mean that the industry is trusted to play fairly among Web content sources.

"Cable has the means to discriminate, that does not mean build a cable wall," Cleland said. "Generally the government recognizes that when somebody has the means and financial incentive to discriminate, they will. Otherwise it's trust them to act accordingly."

Medin said that because consumers and consumer groups inherently mistrust cable operators, misconceptions about how cable access works proliferate the Internet.

"There is a general misconception about how the Internet works," Medin said. "There is traffic engineering and traffic management that goes on in every networks organization."

Those who can discriminate, will
Andrew Jay Schwartzman, Media Access Project president, said the non-regulated cable industry would filter Web contend and play favorites with sources because they have the technology to do so, just like the telephone industry did before they were regulated.

"Common carries are subject to non-discrimination mandates simply because they have the capability to discriminate," Schwatzman said."MaBell could always use their economic power anti-competitively to discriminate. So why should we let the new AT&T do it?"

The Federal Communications Commission has not moved to regulate the cable access industry, because Digital Subscriber Line services are considered a competitive means for consumers to obtain high-speed Internet access.

The consumer groups noted that despite the FCC's heavy reliance the rapid deployment of DLS access, federal agency also knows that anywhere from 20 to 40 percent of the U.S. exchange carriers' local loops are not capable of being upgraded to provide DSL service.

The consumer groups asked that the court support Portland's ordinance to further extend a long-standing history of legitimate local government efforts to promote democracy and not compromise the free exchange of information on the Internet.

—End