brodsky/open cable

as broadcast Sept. 21, 1999

The heart of the matter is a concept called the open cable network. If you get on the Internet through your telephone line, as most of us do, you simply dial in the Internet Service Provider of your choice -- AOL, Earthlink, whatever -- and surf the World Wide Web to your heart's content. That is, while you're not waiting around for the computer to catch up.

But when you get to the Internet through the same cable that runs into the back of your television, everything is different. The modem service that many cable TV companies offer is blindingly fast. But there's a hitch. You have to use the Internet Service Provider the cable company chooses.

America Online, which wants to be the anywhere for everybody Internet service, decided it wanted to have a place on the cable TV modems, giving consumers the right to choose a service, just like you do on your computer desktop when you dial up the Internet over the phone.

So, the world's biggest Internet Service Provider gathered a bunch of allies into something called the OpenNet coalition. They opened a new front for the war, that eing, to get in the face of the competition: the cable industry. Specifically, the coalition is going into court around the country challenging the transfer of cable TV licenses from cable giant TCI to TCI's new owner, AT&T. The coalition's argument: opening up cable modem access to competing Intenret Service Providers should be a condition of the merger. The license transfers of cable operator MediaOne, which AT&T also wants to buy, are next on the agenda.

What makes the open Internet issue so much fun is that it turns the whole telecommunications world onits head. Free marketeers suddenly think monopoly's a good idea... monopolists are suddenly fearless crusaders for the open market.

Take for example the cable companies. Their fight, to keep the Internet competitors off of the cables laid into our homes by the cable industry, is being championed by AT&T. This is the same company that has been fighting like crazy to force local telephone companies to open up their networks to competition, because they say monopoly raises the cost of service for consumers.

But as the new cable giant, AT&T says it needs a closed Internet system to help recoup millions it's invested in the marvelous cables we'll all soon be using to get email, do our banking, download movies.

On the other hand, AOL's fight for open access to the TV cables is joined by a pair of monopoly-loving local phone giants -- GTE and U S West, which have been battling like crazy to keep long disance companies, like AT&T, out of their local markets.

It's a tangled web. What the consumer wants is simple -- open competition, the most providers possible vying for our business, which will lead to better service and lower prices for cable TV, phone and the Internet. Closed markets don't do anyone any good.

So, who should be my ISP? AT&T-TCI, or AOL or GTE? And so I want ADSL or Web TV? In the end, it will be up to the FCC. I think I'll wait and see.

In Washington, this is Art Brodsky for Marketplace.