Around Rhode Island, Cox Communications, the state’s dominant cable television provider, is trumpeting a new service: High Speed Internet service running through cable modems. The ads seem innocuous enough. But they represent one side of a battle brewing nationwide over the future of Internet services, pitting giants such as GTE against AT&T. The fight, which is now being waged in states such as Massachusetts and Florida, is over the question of whether cable companies that provide fast Internet access should have to sell access to their cable lines to Internet Service Providers such as America Online Inc. and GTE – just as AT&T was forced to sell access to its phone lines during the breakup of its monopoly.
In Massachusetts, it is likely that voters will be asked to decide this question on the November 2000 ballot. Those who believe ISPs should have access to cable lines are busy collecting signatures to put a referendum question on the ballot.
Seifert Systems Invests in Energy Efficiency to Strengthen Operations
For manufacturers, energy is more than just another operating expense. It plays a critical role…
Learn More
Right now, the battle is in its infancy. Of the 54 million Internet users nationwide, only about one million of them get their Internet service through cable modems, according to John Wolfe, vice president of public affairs for Cox. While he said the company does not disclose how many of its customers now use the company’s Internet service, he did say that developing the Internet service portion of the business is a priority for the company.
Consumers who are attracted to cable modem service are heavy Internet users, the kind who have a second phone lines in their home for the Internet and need high-speed access, Wolfe said. The service costs $29.50 per month, plus a $15 monthly rental fee for the cable modem. But consumers will be able to buy their own cable modems more easily in the future, he added, which will drive down the cost of cable Internet access.
From the perspective of companies such as Cox, the efforts of ISPs such as AOL and GTE to gain access to cable lines is an attempt to cut off competition. AOL boasts of some 20 million customers, and yet the ISP industry is ultra competitive in the free marketplace, Wolfe said.
”The most competitive marketplace in the country is the Internet, and it’s because of the hands-off approach,” he said. “The competition is good for customers.”
Some Internet providers, however, argue that consumers should have more of a choice when selecting a cable Internet service. Requiring cable companies to provide access would introduce more competition into the marketplace, they say. A spokesman for GTE said the company supports what it calls “open access” to the Internet cable systems.
For now, the battle is chiefly over consumer Internet Users, said Reid Walker, a spokesman for PSInet Inc., a Herndon, Va. Internet Protocol data communications carrier that owns one of the large Internet service providers in the New England region, TIAC – The Internet Access Co., of Bedford, Mass. Cable connections are not much good for businesses, he said, because of the problems with the way the buildings are laid out and the way they are wired. But the market, not the government, should determine the future of the cable Internet market, he said.
”Our position is the competition in the market should decide, not legislation,” Walker said.
To be sure, not all Internet providers are chasing cable companies. Some are sticking to their business plan of building an infrastructure that can provide high-speed Internet service through Digital Subscriber Lines and other services. Providence-based Log-On America Inc. is an example.
”We don’t have an interest in that,” said President David Paolo, in a statement. “We’re building out our own infrastructure over the Bell companies’ copper, which, we feel, is a more stable and robust network.
”We feel that the coaxial infrastructure utilized by the cable companies and its network design is inferior and inadequate for the types of enhanced telecommunications services Log-On America is deploying throughout the Northeast,” he said.
Because the issue is starting to gain attention nationwide, various interest groups are springing up to promote their sides in the debate. An example is Hands Off the Internet, a coalition of Internet users that is fighting against government regulation of the Internet. The Internet has flourished because of the “minimal legislative and regulatory impact on it,” according to the group.
For now, the issue is taking hold mostly in Massachusetts, Florida, and certain West Coast cities such as Los Angeles and San Francisco, areas with large populations of heavy Internet users. For example, in Broward County, Fla., the Broward County Commission voted this summer to regulate high-speed Internet access. But those who oppose such regulation say providing access to cable wires would stifle innovation in other areas of Internet service.
While the open access debate has yet to take hold in Rhode Island, cable companies such as Cox are concerned that eventually it will become an issue.
”I think that companies that are interested in slowing down the development of competitive alternatives will make it an issue everywhere they can,” Wolfe said.
