April 20, 1999

THE FUTURE OF THE INTERNET LIES IN THEIR SPREADSHEETS

by Andy Oram
American Reporter Correspondent

CAMBRIDGE, MASS.—An executive vice president of AT&T was seated by the man who’s been pursuing him with a vengeance through policy-makers’ corridors for months: the chief executive officer of a major Internet Service Provider called MindSpring. At the other end of the table was the representative of yet another contender in the ruthless war for broadband Internet: a senior vice president of Bell Atlantic. But mercifully, a legal advisor of the Federal Communications Commission took his apportioned place as a buffer between them.

Some 50 of us came that day to learn from these panelists the plans of the information revolution’s master builders. Where would the companies in charge of Internet access sink their investment? Which facilities would they yield to competitors, and which would they hang onto with the tenacity of a barracuda? Where had the rolling tides of regulation washed them up, and how would they drag themselves once again into the tumult?

The precocious law students at the Harvard Journal of Law and Technology are to be thanked for bringing together these public faces of the major players on the Internet: an incumbent local telephone company (Bell Atlantic), a long-distance company (AT&T) that has just jumped into the cable TV market with its purchase of TCI, an Internet service provider (MindSpring), and the referee (FCC) that tries to keep them all on the up and up while changing the rules of the game as it goes along.

The April 17 symposium, called “Changing Times, Changing Technology,” gave us not only an update on the results of the Telecommunications Act of 1996, but fascinating insights into the world views of corporations and regulators alike. They’re fighting on many fronts:

Let’s see what the panelists think of all these things. The following summaries use the panelists’ exact words as much as possible, although sometimes I have found it necessary to condense and strip out details.

The panorama as seen by Edward Young, Senior Vice President of Bell Atlantic:

As seen by Charles Brewer, Chief Executive Officer of MindSpring:

As seen by John Petrillo, Executive Vice President of AT&T:

As seen by James Casserly, Senior Legal Advisor at the Federal Communications Commission:

Feints, thrusts, and parries:

The afternoon session dragged somewhat, not because the panelists were any less knowledgeable or forthcoming, but because they clustered at one end of the political spectrum. Each speaker proved to be more conservative than the previous one. While their first-hand knowledge was impressive, most of the unpredictable statements came from the first speaker, Larry Pressler, who as Senator introduced and brought to fruition the Telecom Act of 1996.

There were moments of tremendous insight, as when former FCC commissioner Glen Robinson pointed out that competition has historically led to more regulation, not less. The reasons are that new entrants want a particularly type of deregulation that favors them, while incumbents always feel threatened by new technologies and claim that regulation is needed for a “level playing field.”

On the key issues of the day, the panel showed moderate views. They agreed that the Bells should be let into long-distance, but didn’t flog the FCC about delays as some members of Congress recently have. They understood that the FCC needed to use long-distance as a carrot to encourage Bells to move toward opening their local markets, and that some Congressmen were playing politics by focusing on the Bells’ entry into long-distance.

They were also surprisingly sympathetic to the desire of ISPs like MindSpring to get access to the cable modem. Pressler repeatedly stressed that there should be a “creative” way to get Bells and cable companies to share their facilities—he even invoked the possibility of using some universal service measure to do it!

But those speculations were scant relief from the philosophical lockstep march of the afternoon panel: that the Telecom Act should have removed even more barriers from business, that deregulation is the key to prosperity, and that the FCC should not be reviewing mergers on public interest grounds. While I admired the panelists’ expertise, I could have heard similar points by tuning into late-night AM talk radio—with or without FCC controls.


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