End of the Open Road?

Afoot and light-hearted I take to the open road,

Healthy, free, the world before me ...

--Walt Whitman, Song of the Open Road

With apologies to Walt Whitman, whose "barbaric yawp" anticipated Internet chat groups and the World Wide Web by well over a century, the information superhighway may turn out to be nothing like the open road that the poet celebrated in 1856. That transcendent pathway, according to Whitman, held out the promise of boundless possibilities, countless destinations: "The long brown path before me leading wherever I choose."

Not so the latter-day, digital counterpart of the open road, at least not in its newest broadband incarnation. As the system is now shaping up, the most popular means for Americans to access the Internet from their homes in coming decades seems likely to be through high-speed cable networks. But if the cable industry has its way--and under current regulations it will--cable Internet access will turn out to be as tightly controlled as cable television has been. Instead of a democratic, participatory medium, the new high-speed Internet will have the same top-down control that has long limited broadcast and cable television.

At present, the vast majority of Americans with online access (about one-third of all households) use standard dial-up connections to one of more than 6,000 Internet service providers (ISPs). With some 18 million subscribers, America Online (AOL) may dominate the field, but the ISP market, in the words of The New York Times's Matt Richtel, "remains a diverse industry with wide-open possibilities for competition, including mom-and-pop operations." The future of this market, however, clearly belongs to companies that can provide much faster connections than standard dial-up service, now at 56 kilobytes per second (kbps). Telephone companies are already beginning to offer faster access through the new digital subscriber line (DSL) service, using existing copper wire to reach speeds of up to six megabytes per second (mbps), or roughly 100 times the rate of standard dial-up connections. Satellite operators, wireless services, and utility companies will also be vying to establish high-speed connections to the home. But the leading candidate, given its current presence in two-thirds of all American homes, is the cable industry, which is upgrading its systems to accommodate two-way, broadband Internet access, at speeds of up to 100 times that of today's conventional telephone access and theoretically up to 10 mbps, or two-thirds faster than DSL.

Unfortunately, the world of cable Internet offers nowhere near the choice of service that dial-up users enjoy. Instead of choosing from a full menu of ISP options, broadband customers will be forced to subscribe to a service provider of the cable company's choosing. Those who want to continue to use another ISP (perhaps a local provider that specializes in community news and information or one that offers Web hosting and technical assistance) will have to pay twice--first for the proprietary cable system, and then for the ISP.

More important, the architecture of the new broadband networks will give unprecedented control to the cable ISP, making possible tiered levels of service that will discriminate according to the nature of the content, the affiliation of the sender, or the fee-paying status of the recipient. The cable company's own content, for example, along with that of its sponsors and business partners, will get preferential treatment, while competitive or unaffiliated programming will be relegated to the slower lanes. The cable ISP's menu of programming and the "portal" through which the user ventures into cyberspace will similarly favor some brands of programming at the expense of others.

In short, the "open road" of the Internet could well become an obstacle course for any service outside the favored brands. Over the past year, anticipating the commercial potential of broadband, AT&T has spent more than $100 billion to acquire two of the largest cable companies, TCI and MediaOne, giving it direct connections to some 16 million homes (one-fourth of all cable households) and, through various partnerships and affiliations, access to many more. Currently bound through June 2002 by exclusive IS contracts with ExciteHome (a company in which it owns a majority stake), AT&T recently announced an "agreement in principle" with MindSpring Enterprises, the nation's second largest ISP, to open its new cable networks to competitive ISPs. But that "agreement" (which three of the six negotiating parties refused to sign) raised many more questions than it answered: How many ISPs will be allowed to participate, and will they be treated equitably? Will existing content restrictions and transport controls remain in place? Will AT&T retain control of all customer accounts? It is unclear, in other words, whether a single company will in fact be permitted to dominate what is likely to be the nation's most important communications medium in the twenty-first century.

How, it might well be asked, did we arrive at this troubling state of affairs, with a broadband monopoly looming on the horizon? Curiously, regulators have given AT&T the green light in the interest of competition--or so the arguments run. But those who have a different view may still be able to make their voices heard in what could be the single most important battle over the future of communications.

The New Open-Access Movement

My call is the call of battle, I nourish active rebellion,

He going with me must go well arm'd ...

--Song of the Open Road

By all accounts, the "open access" fray has been one of the most expensive, hotly contested policy disputes since the passage of the Telecommunications Act of 1996. Executives and lawyers involved in the case, according to the Times, estimate that interest-group spending is already in the tens of millions of dollars. Nominally pitting AT&T versus AOL (since these are the two companies with the most at stake), the broadband battles will have no less of animpact on the millions of Americans who connect to the Internet from their homes.

Currently, fewer than a million subscribers have cable Internet service, and about 650,000 customers have DSL. But the broadband market is expected to grow rapidly, reaching more than 11 million households by the end of 2002, according to Jupiter Communications. Although AT&T seems to have the inside track in the race to control broadband, it still has to clear a number of hurdles, and there are some signs of trouble. The company has encountered strong opposition to its cable broadband plans in several communities in Oregon, Florida, and California where it has had to negotiate local franchise agreements to complete its TCI and MediaOne acquisitions.

The city of Portland, Oregon, and surrounding Multnomah County led the way in the spring of 1999 when authorities there voted to require AT&T to open its cable network to Internet competitors. In response, AT&T sued the city and lost in federal court in June, and the case is now on appeal in the Ninth Circuit Court of Appeals in San Francisco. In the meantime, the commissioners of Broward County, Florida, arrived at a similar conclusion as did their counterparts in Portland. They required AT&T to open the cable network it acquired from MediaOne (which had already begun to offer cable Internet service under its Road Runner banner). More recently, authorities in St. Louis, Missouri, and Cambridge and Weymouth, Massachusetts, voted to require open access, while those in Sacramento, California, rejected it. The matter is still pending in San Francisco and Los Angeles.

The open-access movement gained momentum in July, when the National Association of Counties (NACo), representing 1,800 county governments across the country, passed a resolution in support of open access at its annual meeting in St. Louis. "It is essential," the NACo resolution declared, "that local government franchise authorities have the authority to require that all cable companies provide open access to all Internet service providers."

The struggle over open access, however, will likely be resolved at the federal level, through legislation, rule making by the Federal Communications Commission (FCC), or both. But neither Congress nor the FCC is moving quickly, and the entire debate in Washington is enveloped in a thick ideological and rhetorical fog.

Market Rhetoric in the Service of Monopoly

Now I re-examine philosophies and religions,

They may prove well in lecture-rooms, yet not prove

at all under the spacious clouds and along the

landscape and flowing currents.

--Song of the Open Road

FCC Chairman William E. Kennard is fond of referring to his agency's "unregulation" of the Internet. "The best decision government ever made with respect to the Internet," Kennard told the National Cable Television Association (NCTA) at its annual meeting in June, "was the decision that the FCC made 15 years ago not to impose regulations on it." Precisely the same philosophy, according to Kennard, guided the agency in its approach to the emerging field of high-speed telecommunications: "[W]ith competition and deregulation as our touchstones, the FCC has taken a hands-off deregulatory approach to the broadband market. We approved the AT&T-TCI deal without imposing conditions that they open their network."

The leading alternative to this hands-off approach is a framework that would enable ISPs to gain nondiscriminatory access to the new cable networks--not free access, but simply access under the same terms and conditions that the cable companies extend to their affiliated ISPs. Chairman Kennard declares that "it is the FCC's job to implement and cultivate this competitive environment; to open up previously closed marketplaces to competitors; and to set the framework for a vigorous competition." Nonetheless, he has supported AT&T's effort to develop a cable Internet marketplace that would close off competing services.

The irony of supporting monopoly in the interest of competition was not lost on the openNET Coalition, a consortium of ISPs that will effectively be excluded from cable broadband if AT&T's controlling position is upheld. "The FCC has been able to avoid regulation of the Net precisely because the underlying network is open and market forces can serve the interests of business, consumers, and the economy," observed Rich Bond, co-director of the openNET Coalition. "We believe AT&T's plan for a closed noncompetitive system will create exactly the kind of 'bottleneck' that the FCC has tried to avoid."

AT&T has spent billions of dollars to acquire cable networks, and it will invest billions more to upgrade them to two-way, digital broadband status. Its efforts to keep these networks closed are understandable; that is how it expects to make money. And it is not unreasonable of Kennard to assume that the quickest way to ensure the full development of broadband networks is to grant favored status to a corporate giant such as AT&T. But to mistake such corporate protection for sound public policy is another matter entirely, and the public-interest advocacy community has led a chorus of dissent in response to the FCC chairman's position. "We're at a fork in the information superhighway," observed Andrew Schwartzman, president and CEO of the Media Access Project. "One way leads to open access, boundless innovation and free expression. The other has us follow the same path that made cable TV the closed, unresponsive and overpriced monopoly Americans have grown to hate."

Fast Access to What?

O highway I travel, do you say to me Do not leave me?

Do you say Venture not--if you leave me you are lost?

--Song of the Open Road

Even as AT&T and its lawyers and lobbyists battle AOL and its lawyers and lobbyists in the high-stakes broadband sweepstakes, the real issue at hand--more philosophical than financial--tends to be overlooked. This is a battle over the basic character of the online world. As the Media Access Project observed in its petition to the FCC in favor of open broadband access, "Offering Internet access under the close cable-TV system model will, quite literally, change the character of the Internet as an engine of creative technological and marketplace innovation, open entry, economic growth, and free expression."

Under the cable model, content owned by the cable companies and their partners will receive top priority, delivered to our homes at what will become the standard for high-speed access, while other programming will receive less favorable handling. The industry has already started to develop the capacity to deliver these differentiated services. Cable companies are building local, high-speed storage facilities across the nation to provide quick and convenient access to their own entertainment and information products. And as Cisco Systems (one of the leaders in providing sophisticated networking hardware and software to cable ISPs) boasts to its customers, the new networking technology gives "you the information you need to offer advanced differentiated services at a profit... . [Y]ou can optimize service profits by marketing 'express' services to premium customers ready to pay for superior network performance."

Under such a system, the Internet will become much more of a "branded" environment, with premium service for certain products and certain customers, leaving others with second- and third-class transport (or possibly no carriage at all, for those who cannot afford even the lowest tier of sliding-scale fees). If a nonprofit or small commercial content provider wanted to have its information included, for example, it would be forced to seek approval and pay fees to the cable companies. The same constraints that currently affect other delivery systems, in other words, most notably the film, broadcast, publishing, and recording industries, would now effectively limit the Internet, creating distribution bottlenecks in a system through which all manner of material once flowed freely.

Even without all of the monitoring, metering, and merchandising that will likely characterize the cable industry's handling of Internet access, a more fundamental question remains unanswered: Access to what? The likelihood that entertainment and telecommunications conglomerates will dominate broadband underscores theneed to foster noncommercial civic, educational, and cultural values in the new medium. This is the other, often overlooked side of the online world, beyond the booming e-commerce marketplace, and all but ignored in the attention lavished by the media on soaring Internet stocks. As William J. Mitchell, dean of the School of Architecture and Planning at MIT, observes in his book City of Bits, "The most crucial task before us is not one of putting in place the digital plumbing of broadband communications links and associated electronic appliances (which we will certainly get anyway), nor even of producing electronically deliverable 'content,' but rather one of imagining and creating digitally mediated environments for the kinds of lives that we will want to lead and the sorts of communications that we will want to have."

Part of that "imagination and creation" process, clearly, is a frank assessment of what is missing in the existing online environment, starting with those communications services and information resources that our democracy will need inthe twenty-first century. A number of worthy civic and cultural Web sites already exist, many of them the work of nonprofit organizations and educational institutions. But most of these are scattered across an online universe that is increasingly dominated by such companies as AOL and Yahoo.

Any assessment of the online environment also has to consider the "digital divide," the gap that separates people with and without access to computers and online networks. Approximately half of all households now own computers, but the percentage of white children with computers at home is triple that of black and Hispanic children. While half of families with annual incomes over $75,000 have Internet access, only 10 percent of the rural poor do. Recent evidence suggests, moreover, that despite encouraging increases in computer access among minorities and the poor, the gap may actually be widening.

Priced beyond the reach of many households, broadband services will probably exacerbate inequalities in access. Cable has never been held to a standard of universal service. In a cable-driven communication medium, universal service will give way to preferential service, in which "preference" is defined both by the network operator's power to establish new classes of service and by the consumer's ability to pay.

But it is not too late to begin imagining a different online world. It would be a world that would at least maintain--better yet, enrich--the very things we value in the real world, everything from educational opportunities and social services to community organizations and cultural expression. E-commerce almost certainly will take off, but we are going to need a concerted, societal effort to ensure that nonprofit activities flourish as well.

Finding new ways to meet these needs in the digital age should be a primary concern in thinking about the new broadband systems. Unfortunately, as new technology has advanced, we've grown accustomed to sitting back and awaiting the next scientific breakthrough to deliver yet another product that is smaller, faster, cheaper, and more powerful than its predecessor. If we expect to get the full social benefits of the new networks, however, we will need a far more active, participatory approach. Now the most critical step is to ensure that Internet access remains open and nondiscriminatory--that no single corporate giant gains control of it. We still have time to put the Internet of the future back on the open road.