Cable ` la modem

How did AT&T engineer its open-access victory in San Francisco?

Published July 27, 1999 8:00AM (EDT)

It's nearing 6 o'clock on Monday evening and the audience in San Francisco's City Hall is getting restless. All the usual suspects are there -- the advocates for low-income housing, the lawyers' fraternal organizations, the local City Hall three-piece suiters. But there's also a big contingent of young programmers, paper cups of coffee in their hands, goatees in the latest style. They are the most fidgety. They look like they're not sure this can't all be done more easily via an exchange of e-mails.

The overflow crowd has turned out to see the debate on "open access." Open access in the current vernacular means forcing cable companies - in San Francisco's case, AT&T - to allow competing Internet service providers to offer high-speed Internet access over the cable firms' networks. In this instance, as everybody involved admits, the problem is largely theoretical, because the local cable system has not yet been upgraded to support cable modems and, as yet, nobody in San Francisco can get cable modems at all.

So why is the San Francisco Board of Supervisors taking up this issue now? Because AT&T has pretty much gotten itself into a regulatory pickle. After buying cable giant Tele-Communications Inc., AT&T has had to seek approval to transfer TCI's cable franchise rights to its name in each and every jurisdiction where TCI owns a cable system. And unfortunately for AT&T, some city governments aren't making it easy. Already Portland, Ore., and Miami have imposed an open-access requirement on AT&T as a condition of the transfer. That means for AT&T to offer cable at all, it will have to share its cable spectrum with Internet service providers and America Online. Of course, AT&T is fighting tooth and nail and has taken its case to court; it does not want to share the cable networks it has spent billions to acquire.

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Most of the hip young engineers in San Francisco's City Hall on Monday are actually employees of Excite@Home, the high-speed Internet service provider partly owned by AT&T. They have taken much of the day off, with the company's explicit blessing, to let their voice be heard and to cheer for the home team. The problem is that they came at around 3 o'clock to see a rip-roaring debate, and, well, it's just not shaping up that way. More than an hour is devoted to other issues before Tom Ammiano, president of the Board of Supervisors, introduces an amendment to the franchise legislation that would immediately require open access if the federal courts allow it in Portland or if AT&T voluntarily agrees to it anywhere. Then another supervisor introduces an amendment to the amendment. Or maybe it's a substitute amendment -- hardly anyone is quite sure which. And the only rip-roaring debate is about whether an amendment to the amendment is really permissible, and in case whether there should be an up or down vote on Supervisor Ammiano's amendment before a vote on the substitute amendment (or maybe the amended amendment).

The funny thing is that there's a much easier way of finding out what's going to happen than sitting around watching the politicians fumble for their papers. If you'd really been in a hurry to know the outcome, you could just as well have asked Blair Levin, a consultant to AT&T who had parachuted in from Washington, D.C. Levin is a bona fide veteran of the telecom regulation wars, having been the chief of staff to Reed Hundt when Hundt was chairman of the Federal Communications Commission.

If you had asked Levin at 4 o'clock what was going to happen at 6:30, he would have told you that Ammiano's amendment wouldn't pass, but there would be a substitute amendment. The substitute amendment would put off the issue until the Portland case was decided, and if the federal courts ruled that local governments could in fact require open access to their cable systems, then San Francisco would take up the issue again. That sounds a lot like a victory for open access, but in fact it commits the city to do nothing more than wait, see and study -- and maybe, just maybe, take up the issue again at some indeterminate future time. So it's a victory for the cable company, no question.

Plus there would be another provision, Levin would tell you: Cable-modem providers will have to offer access to the Internet that doesn't force proprietary content on its users -- like an unchangeable start page, for example. Excite@Home already lets users choose their content, Levin would tell you, but America Online, the most vocal proponent of open access, doesn't; it pops ads up instead. So AOL, thinks Levin, has basically shot itself in the foot by making a big issue of the franchise transfers -- though without open access there is little chance of AOL being on AT&T's cable system in the first place.

"If," Levin adds, pro forma, "my intelligence is correct."

Don't bother taking that profession of modesty too seriously. Of course Levin's intelligence is correct, because the substitute amendment (it turns out to be that, not an amendment to the amendment) is the result of negotiations between AT&T and the board of supervisors. And aside from Ammiano, most of the supervisors seem not to have the stomach for a full-fledged brawl with AT&T. Maybe they're impressed that the new franchise agreement includes all sorts of goodies like high-speed access in public computer centers (courtesy of AT&T) and rebates to subscribers. More to the point, the whole issue is off-putting even to professional legislators. In fact, it gets a good half-hour for the supervisors to get a clear explanation of the differences in the two proposals. (Astonishingly, the telecommunications aide to the Board of Supervisors calls the differences in the language -- which are the very reason that AT&T has flown in lobbyists from around the country -- merely "technical.")

Around 6:30, the open-access provision goes to a vote. Eight aye, three nay. The substitute amendment is next. It passes, nine to two. For the record, Levin's intelligence is correct virtually to the letter.

There's only one question that still remains. Where did subsection (c) of the substitute amendment come from - the one that calls for "one-click access" to the Net, freeing users an obligatory start page? The AT&T guys are really excited about it. Levin mentions it. Thomas Gallagher, an AT&T lobbyist down from Seattle just to watch the big show, mentions it. Milo Medin, the chief technology officer of Excite@Home has been holding court out in the lobby for most of the hearing, and he's excited about the one-click provision too. This is not exactly his favored venue -- it's clear that he would much rather chat with supporters out in the lobby than listen to a muddling legislative debate -- but talking about one-click access puts him in a nearly jubilant mood.

By 7 o'clock, the room is clearing out. Tom Ammiano is surrounded by a posse of reporters, most of the other supervisors are out looking for any press they can find. Milo Medin is still out in the hall, amiably chatting with a supporter who is telling him that America Online blocks access to, the most popular site on the Net. Medin doesn't bother to correct him. At technology conferences, Medin, a Net mega-millionaire and a crowd-pleasing speaker from the Steve Jobs mold of tech honchos, is a star. Here at City Hall, he goes largely unrecognized.

So, Milo, where did that one-click provision come from after all?

"We wrote it," Medin says, happy to take credit. It's a funny moment. Lobbyists write legislation all the time, but in Washington a lobbyist admitting that a piece of legislation was written by the company lawyers is tantamount to a chef at a fine restaurant walking around saying that the secret ingredient in his mussels is catsup. It's just not done, and it tends to scare off the customers.

It's an almost charming slip-up. At least Medin scores points for honesty. And it doesn't much matter for now, since AT&T has already won the San Francisco battle. Still, if you were an AT&T lobbyist, you'd probably tell Medin to be careful. If you go around talking about how you write legislation, you might just not get to write it anymore.

By Mark Gimein

Mark Gimein is a staff writer for Salon Technology.

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