July 16, 1999 Web posted at: 9:06 a.m. EDT (1306 GMT) by Nancy Weil

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(IDG) -- In the absence of federal regulations requiring cable companies to let competing Internet service providers (ISPs) offer services on their high-speed Internet networks, more local municipalities will act on behalf of consumers just as the Broward County Commission did yesterday in Florida, supporters of open access said today.

The Broward commission became the second local governing body, after Portland, Oregon, to approve such an ordinance in the U.S. The San Francisco Board of Supervisors will consider a similar ordinance on July 26 and the Dade County Commission, just south of Broward in southeastern Florida, is set to vote on the issue in that county the next day, supporters of the move said at a press conference today. The Broward measure was proposed by GTE Corp. and was strongly opposed by AT&T Corp., which flooded the county with lobbyists, said ordinance supporters and published reports.

The local ordinances requiring open access generally require cable companies to lease lines for high-speed Internet networks to competing Internet service providers. Lease terms must be the same as those between the cable franchise and its chosen ISP. Cable franchises typically contract with specific ISPs to provide customers with Internet access over high-speed cable lines. Cable customers then must use the ISP with whom the cable franchise has its deal, paying the ISP separate fees for Internet service.

The Broward decision "took a lot of courage," said Jonathan Sallet, chief policy counsel for MCI WorldCom Inc. "It's obviously been very intense. They know AT&T will attack, but it seems clear that Broward County officials understand this basic truth. It's better to preserve Internet competition and consumer choice now rather than to try to revive it later."

The Broward commission voted 4-3 yesterday that cable companies must open access to networks in unincorporated neighborhoods of the county, amounting to about 8 percent of Broward, according to the Sun-Sentinel newspaper, which has closely followed the issue. Unincorporated areas are not governed by a local municipality, but instead are subject to county regulations.

Local officials understand the issues, including the negative effect that a lack of competition has, because they live in the communities they serve, supporters said.

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AT&T's goal is to establish an Internet monopoly, using cable TV acquisitions to achieve that goal, supporters of the Broward measure said today. The press conference included Sallet from MCI WorldCom; John Rapaso, associate general counsel at GTE; Robert Palucci, the founder of Worldwide Internet Services, a Broward Internet service provider (ISP); and Greg Simon, co-founder of the OpenNet Coalition, a group of ISPs pushing for open access. They portrayed AT&T as a monolith intent on running competitors out of business.

Had AT&T's lobbying effort persuaded Broward lawmakers to quash the ordinance, local ISPs in particular would have suffered, Palucci said.

"If this vote did not pass that would (have) put us definitely out of business," Palucci said. "We could basically just sell our equipment now and get the pain over early."

For its part, AT&T said the Broward County decision to "force access" and require cable operators to share their networks with competing ISPs is a step in the wrong direction.

"Today's decision is clearly wrong on the law and bad public policy," Ken McNeely, AT&T vice president of law and public affairs, said in a statement issued after yesterday's ruling.

Forcing AT&T to open its networks will discourage it from making future infrastructure investments, which in the long term will lead to less choice for consumers over who they can turn to for local telephone and Internet access services, McNeely said in the statement.

The company also cautioned against permitting localities around the country to establish their own rules on the matter.

"As FCC Chairman Kennard recently stated, the information superhighway will not work if 30,000 different localities each establish their own rules for Internet access," McNeely said. "Consumers, not the government, should be the ones to choose what new technology becomes available," he concluded.

Palucci of Broward ISP Worldwide Internet Services predicted that the Broward vote, coupled with the similar move in Portland, will lead to open access nationally. Sallet further predicted that eventually there will be federal regulations ordering open access. Thus far, however, the U.S. Federal Communications Commission (FCC) has taken a hands-off approach when it comes to Internet regulation. Supporters of the Broward vote today characterized the FCC stance as "do nothing."

"What we need is an effective national policy, not a do-nothing policy," Sallet said.

AT&T reportedly intends to continue fighting. The company is acquiring Tele-Communications Inc. (TCI) and the Media One Group and stands firm in its opposition to opening up cable networks to competing ISPs. The Sun-Sentinel reported in its online edition this morning that cable company representatives will meet and could file suit against the commission to block the ordinance later today. Even if legal action isn't undertaken that quickly, the ordinance is likely to be challenged, as a similar measure went to federal court in Oregon.

A federal district judge in Oregon ruled last month that local regulators can force AT&T to open its high-speed cable network to competing ISPs. [See "AT&T Takes a Blow in Cable Fight with ISPs," June 4. ] AT&T has suggested that it will appeal that ruling and is arguing that local regulators in Portland and Multnomah County have no legal authority over cable franchises.

The MediaOne acquisition could mean that local lawmakers in Atlanta, Boston, Detroit, Minneapolis and Jacksonville, Florida, will also consider forcing AT&T to open its cable network to competition in those cities, Simon said.

Surveys of consumers in Broward and Dade counties and in Los Angeles, where an attempt at an open-access ordinance derailed, and San Francisco, found that the majority believe it's unfair for cable companies to monopolize broadband service. Consumers want to be able to choose their own ISPs when they obtain Internet access through a cable provider, Simon said the surveys found.