Published on Saturday, February 12, 2000 in the Washington Post
AOL Reverses It's Position On 'Open Access' Internet
by Peter S. Goodman and Craig Timberg
For more than a year, America Online Inc., the nation's most favored on-ramp to the Internet, led a pitched battle in statehouses and city halls around the country, mobilizing lobbyists and proposing rules to force cable television companies to share their links into homes with rivals.
Without such rules, AOL warned, cable operators offering high-speed Internet access could seize control of the gateway to the global computer network. The free nature of the World Wide Web was at risk.
Then, last month, AOL essentially became a cable company: It agreed to buy Time Warner Inc., securing a route into 20 million homes via the company's cable links. Now, AOL has pulled back from its "open access" crusade.
This week, the Dulles-based company took no action as two bills mandating open access died in the Virginia General Assembly. It has told its lobbyists in other states, including Maryland, not to advocate similar legislation. And the company has quieted its demands that federal authorities condition approval of the merger of AT&T Corp. and cable giant MediaOne Group Inc. on promises of open access.
AOL still contends that cable systems must offer their customers a choice of Internet providers--and it still wants to make deals to get itself on other systems. But now the company asserts that the market should sort out the details.
"We have come to the view that the most effective and expeditious way of getting to open access throughout the cable industry is to just go do it," AOL General Counsel George Vradenburg III said.
He said AOL was responsible for a new climate in which the general principle of open access has been widely embraced, though significant differences remain about how to get there.
The latest sign of AOL's new tack came this week in Richmond, as a pair of bills designed to force cable systems to open their systems was shelved by the Virginia General Assembly.
"AOL has kind of dropped by the wayside," said Del. Kenneth R. Plum (D-Fairfax), chairman of the state Democratic Party and co-chairman of the House Corporations, Insurance and Banking Committee, which voted unanimously Thursday to postpone the bill for the year. "They no longer are pushing the bill."
In Pennsylvania, AOL retained a lobbyist to work on similar legislation, but recently gave its representative instructions to stop pushing such a bill, Vradenburg confirmed. The company has given the same instructions to outside lobbyists in Maryland and Michigan.
"The need for these state legislative initiatives has been lessened now that we are likely to get effective and expeditious movement in the marketplace," Vradenburg said.
In Portland, Ore., the city that first adopted open access--bringing a lawsuit from AT&T--AOL has let it be known it no longer favors such rules.
City Councilman Erik Sten, who led the open access drive, said he used to receive twice-monthly strategy calls from Steven Teplitz, AOL's senior director for telecommunications policy, but has received only one since the Time Warner merger: AOL said it now felt that the market would best deliver open access.
"They've gone from being the biggest corporate champion of open access to at best a lukewarm champion, and maybe at worst an enemy," Sten said. "It just completely underscores the case that the government needs to do its job and quit pretending that corporate forces will do the government's work."
Sten and other activists, coalescing around a group called the OpenNET coalition, have long argued that the Federal Communications Commission should enforce open access. But FCC Chairman William E. Kennard has said new regulations might slow the deployment of high-speed Internet service. Moreover, Kennard points out that cable has competition for high-speed access from DSL, a service that runs over phone lines.
AOL remains a member of OpenNET, Vradenburg said, despite its new faith in the marketplace, but a philosophical breach with its partners has become clear.
In testimony before the FCC last week, Greg Simon, co-director of the OpenNET Coalition, urged the commission to include open access requirements in any approval of the AT&T-MediaOne merger.
Not long ago, AOL made the same argument: In August, the company filed a brief with the FCC warning that the deal "would significantly enhance AT&T's ability to restrict, or even cut off, consumers from gaining access to Internet-based competition."
Asked yesterday if AOL still believed that the FCC should impose such a condition, Vradenburg said: "It's now become almost a moot event. AT&T has now committed to doing that [providing open access]. . . . Time passes and the marketplace has moved on."
Vradenburg cited AT&T's December written agreement with MindSpring, the nation's second-largest Internet service provider, pledging to open cable systems it purchased from Tele-Communications Inc. once an exclusive deal with Excite At Home expires in two years.
When that letter was signed, Vradenburg called it "a positive step" but added that the real test would come "when we try to enter into enforceable agreements."
Yesterday, Vradenburg said an open-access requirement would be unnecessary for AOL's deal with Time Warner.
Andrew Schwartzman, president of the Media Access Project, a consumer advocacy law firm, said AOL's change was disappointing.
"Things are moving in the wrong direction, but I remain hopeful that [AOL] will realize they cannot go back," he said. "The consequences of trying to do a 180 on this will be huge and will undermine their credibility."
Staff writer Ariana Eunjung Cha contributed to this report.
Copyright 2000 The Washington Post Company