Just six months ago it looked like Portland Web-heads would
be stuck with technically limited service while local government
officials and AT&T slugged it out in court. While both
sides await a ruling, the point may soon be moot. By year-end,
Portland could be the site of more high-speed cable access
than anything this side of the CIA.
Last summer, Portland and Multnomah County argued they
had the right to reject AT&T's cable Internet franchise
application because the leviathan refused to provide open
access to the high-speed lines it would control. No local
government had ever made that case before. So AT&T
sued; the case is currently pending in the Ninth Circuit
Court of Appeals.
Within the last few weeks, the court case has lost some
of its drama. It's not that the city and AT&T have
made nice. Hardly. Rather, it's that at least four of
AT&T's competitors are heading to town. They aren't
going to wait for AT&T to get bitten by the sharing
bug; instead, with the help of the city's cable office,
they are going to put up their own cable lines in the
battle for a share of Web-friendly households.
"It's going to be like the OK Corral," says David Olson,
director of the city's Office of Cable Communications
& Franchise Management.
As soon as the companies hit the streets, the public
will be besieged with a tangle of options: high-speed
Internet, hundreds of channels of cable TV, video on demand
and phone service. The tab for all the goodies could run
as high as $110 a month for a single household.
First up is Open Access Broadband, which could have a
proposal before the city and county commissions within
two months and construction crews in the streets by mid-summer.
The Denver-based start-up plans to provide a cable spine
for Internet service providers. Other than that, OAB officials
are mum: They're finalizing investment deals with several
significant technology companies, and in the world of
billion-dollar deals, silence is golden.
The company will be joined soon after by Wide Open West,
backed by one of the Texas billionaire Bass brothers,
and RCN Inc., which is partly owned by Paul Allen, as
well as Western Integrated Network, a Denver-based company.
The door to the out-of-towners was opened last summer
when AT&T played its monopoly card. It believed that
the Telecommunications Act of 1996 and Federal Communications
Commission regulations mandated that local governments
had to award high-speed cable franchises to any company
that met minimum standards of financial stability and
technical ability. Soon after its acquisition of TCI's
nationwide cable systems, AT&T figured those regulations
meant that local governments had to kiss its ring.
Olson and City Commissioner Erik Sten, who oversees the
cable office, are not the kissing types. On this point
at least, Sten's political philosophy boils down to the
fact that cable franchises are public assets and his duty
as commissioner is to leverage that asset into the greatest
good for the greatest number. Clearly, that did not leave
room for allowing one company to sew up Portland's high-speed
market.
During the court battle, Portland netizens have been
stuck with 56 kbps dial-up service or the speedier-but-not-speedy-enough
DSL service of US West.
Open Access Broadband and the others are prepared to
spend an estimated $500 million each by 2004 to fix that.
The companies are willing to gamble on a medium-sized
market like Portland, in part because they feel so welcome
here.
While Sten and Olson have been battling AT&T, they've
tried to make it easy for anyone who wants to roll the
dice in Portland, letting them build around AT&T.
Typically, it takes six to 12 months for cable franchises
to work through Olson's office; right now, it's processing
them in two months. "You go to where the market restrictions
ain't," says David Maney, OAB's chief executive.
That lack of restrictions may draw more national attention
to Portland. Although AT&T already competes with RCN
in some markets, Portland will be the only locale with
so many companies vying for customers. And AT&T doesn't
plan to let the start-ups get a head start. "We're not
going to function in reaction to the competition," says
Debbie Luppold, an AT&T lobbyist and franchising vice
president. "We're ready to roll."
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Willamette Week | originally
published February 23,
2000
