AOL Backs Off on Access - Company Business and Marketing
K.C. NeelAmerica Online Inc.'s official announcement last week that it's backing off on its push for open access legislation surprised few telecommunications players. Open access proponents said they were disappointed over AOL's decision, but hopeful that regulators will see through the company's new-found zealotry for marketplace solutions to the issue.
"I'm not sure how (AOL chairman) Steve Case can look at himself in the mirror now after arguing so hard in front of Congress for legislation," says RMI.NET chairman Doug Hanson. "But what this really does is point up the need for regulations opening up cable systems to competition because it's obvious they're not going to do on their own."
Clearly, an underdog phenomenon could work to the ISPs favor now that the country's largest provider has essentially defected to cable industry's side of the argument. Regulators may feel the need to readdress open access laws because the balance of power between the small ISPs and large cable companies is so overwhelming now, says Legg Mason Precursor Group analyst Scott Cleland.
"I think there will be a shift from monitoring words to monitoring actions," Cleland says. "Actions speak louder than words and so far, we haven't seen many public marketplace examples for them to point to yet."
Still, some industry pundits maintain there's no need for open access regulation. "From a regulatory point of view, common carrier status for cable has never made any sense," says industry expert Steve Effros.
Some states are figuring that out now, too. Open access bills in Pennsylvania and Idaho died last week after lawmakers voted the measures down. Bills in Kansas, Michigan and Illinois, among other states, are pending.
Meanwhile, a U.S. District Court judge last week dismissed six of the seven counts filed by Comcast Corp. and Advanced Cable Communications against Broward County, Fla. The MSOs sued the county last summer when it passed an open access ordinance. The county has until Feb. 28 to respond to the suit's remaining First Amendment challenge.
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