The debate of the day is once again open access. While ATT (T) and competitors busily hash out the future of cable broadband services in federal court, ExciteAtHome, possibly the biggest player in high-speed cable access, has been pushed to the sidelines. But don't expect the company to stay quiet for long.
When AT&T went to court last week to battle a loose coalition of competitors who want access to its cable plant, ExciteAtHome had no legal representation in the courtroom. At the post-trial press conference, only AT&T representatives were in attendance. Yet ExciteAtHome stands to lose the most if the case goes awry for AT&T.
AT&T's $100 billion cable plan has been under siege in city after city by local authorities who want AT&T to offer competing Internet services - not just ExciteAtHome, which AT&T partially owns. Portland, Ore., was the first city to challenge AT&T by forcing it to offer service from other ISPs on its cable pipes, and since then municipalities like Dade County, Fla., and St. Louis have approved similar measures.
The central debate in court was whether AT&T should classify its services as cable or telecommunications. The semantic nit-picking was key to the AT&T lawyers' strategy: By classifying its services as telecommunications, AT&T hopes to take jurisdiction away from local municipalities like Portland and give it to the Federal Communications Commission, which is believed to be much friendlier to AT&T and ExciteAtHome.
Although it seemed petty, the debate also highlighted the fact that few people are sure how to define ExciteAtHome's business. After the hearing last Monday, David Olson, the Portland Cable Commission director credited with creating the whole controversy, pleaded ignorance to ExciteAtHome's business. "I don't think they even own a network," he said.
Since AtHome bought the content company Excite (ATHM), many people seem to have forgotten that AtHome was first a networking company. The venture started when TCI CEO John Malone got John Doerr and William Hearst from Kleiner Perkins interested in the idea that cable modems could be used to pipe Internet services into the home.
The three took the idea to Milo Medin, then a network guru at NASA. Medin is probably one of the few people to tell John Doerr he didn't get the Net. "I asked him, 'Do you know how the Internet works?' The Internet is full of bottlenecks. A cable modem would be like putting a huge on-ramp onto a one-lane highway," Medin recalls.
What Medin and ExciteAtHome have done is build an infrastructure of backbone pipes, servers and caches that help limit the bottlenecks. After making this investment, ExciteAtHome will not let in competitors without getting something in return. If rivals get access to AT&T's cable plant, they will have to build similar infrastructure to support their broadband services.
ExciteAtHome leaders say they have never claimed that they cannot or will not offer competitive services. "I'm not against open access. If that's what people want, we'll do it," says Medin. "We tried to get AOL (dossier) to do a deal four years ago. They said, 'We don't need cable; we don't need you. We can boss you around.' They ignored this thing, until they saw we were getting subscribers." For its part, AOL claims it recently offered the same terms to AT&T that ExciteAtHome pays and was rebuffed.
While AT&T is rumored to be in talks with Excite's competitors - namely AOL - ExciteAtHome is going to play hardball. Of course, it has no choice. "Of everyone who's ever built a network, no one's been allowed to keep monopoly control," says Greg Simon, codirector of the OpenNet coalition, a lobbying group backed by AOL and other ExciteAtHome competitors. "They need to come up with a real good reason why they ought to be able to keep monopoly control."
A good number of the companies that are backing the open-access movement are incumbent telephone companies, including GTE (GTK), which filed an
