Sunday, December 26, 2004

Cable Industry Still Fighting Competition

This story from the Washington Post almost got lost in the Christmas rush, but is pretty significant for what it reveals about the industry.

The significance of the story is that it confirms that cable companies continue to resist any and all efforts that would result in other companies and/or services having access to their networks.

This story brings the quiet little war over essentially making cable boxes open source that is being fought by high-priced lobbyists in the corridors of the Federal Communications Commission (FCC). This fight is over a requirement to have all cable boxes run off of a standard card. The cable companies are loathe to give up any shred of the lock that they have on their networks which, you may recall, were created under the guise of regulated monopoly conditions. Cable has since been deregulated but, like the phone companies, cable companies want to maintain the ability to lock Internet Service Providers (ISPs) and voice over Internet Protocol (VoIP) companies off their networks.

The cable company fight against the ISPs is going to be heard by the U.S. Supreme Court during this term. But, the fight goes back to at least 1999, when the City of Spokane, Washington, tried to force cable giant TCI (which was purchased by AT&T, which later sold its cable assets to ComCast). TCI fought then to block independent (that is, ISPs not owned by cable companies) from offering ISP service over its network in Spokane. The city fought to force TCI to open the network. The case went to court. The city lost.

The FCC, though, ruled in 2002 that cable was an information service and ordered the cable systems open to competing ISPs. The suit brought by the cable industry to overturn this ruling and, thus, keep a strangle hold on their networks, is the case the Supreme Court will decide next year.

So, what is the significance of this to Lafayette? Well, the fact of the matter is that Cox, BellSouth, and some local opponents of the LUS fiber plan have attempted to make a big deal about the fact that guv'mnt will have a monopoly on infrastructure and service over this new network that they are going to build.

NEWSFLASH! Cox would have a tighter monopoly if it decided to build a fiber to the home network. BellSouth would have one just as tight as that of Cox.

Why do I say a Cox or BellSouth monopoly (and make no mistake about it, only one fiber network will be built in Lafayette) would be tighter than LUS? Because of local control in the case of LUS and the lack of it in the case of the networks built by either Cox or BellSouth. That is, we — the citizens of Lafayette — have the ability to influence and even control the behavior of LUS through our ability to elect the Mayor-President and the Parish Council. We have no similar ability to influence either Cox or BellSouth.

In fact, the natural order of these monopolist-community relationships is that communities take what the monopolists give them and be damned thankful they're getting that! Cox and BellSouth have made a big show of their concern for the well-being for the citizens of this community in recent months as they have fought to stop the LUS plan. But, their initial response to the initiative illustrates clearly about what they think of us and how they think the world should work. Opposing this project on the merits has never been part of the plan. No, the first instinct was to try to kill the initiative using the Louisiana Legislature as an accomplice. Failing that, they fought to ensure that LUS would have to wander into the regulatory tangle that is the Louisiana Public Service Commission.

They loaded the regulatory wagon with provisions that they would not allow to be placed on their respective companies — specifically the provision that telecom services can't be subsidized by other LUS revenue streams. Had that provision been in effect against either Cox or BellSouth, we'd still be stuck with technology from the 1960s.

So, 'the people' have been used as human shields for the narrow financial interests of Cox and BellSouth as they tried to kill the LUS initiative.

Neither Cox nor BellSouth has ANY interest in allowing consumers in Lafayette or anywhere else to have ANY choice in terms of service providers. Both companies and their industries have spent hundreds of millions of dollars on lawyers and lobbyists fighting efforts to force competition into their sectors since the passage of the Telecommunications Act of 1996. They are still fighting those fights. And they have not made ANY commitment to make the investment in Lafayette that LUS has made.

There is irony and cynicism at work in this process. The irony is that those Lafayette citizens who think the LUS project is too risky have pushed LUS on a course that ensures the fastest economic return on its fiber investment. That just happens to be via a closed network that affords no other providers access -- although, as long as the fat Internet pipe remains unfettered, open access will be available to all here. The cynicism is on the part of the incumbent providers who attempt to position themselves as 'little guys' cringing in fear of a government onslaught.

The reality is that in recent months Cox and BellSouth have each spent multiples of what it will cost LUS to build its fiber to the premises on other projects that they have deemed to be a higher priority than the future of this community. LUS is focused exactly on our future and, with the Parish Council's blessing, has decided to invest in us.

That is precisely how this city was built and that is why it will prosper in this century.

As a citizen of Lafayette, you and I can contact Joey Durel or a member of the Parish Council with a phone call, email, or even drop by their offices. Try that with Duane Ackerman or James Kennedy.

1 comment:

Anonymous said...

http://www.katc.com/Global/story.asp?S=2747938