AT&T is @Home on the fence

AT&T - which once maintained that it was not technically possible to put more than one high-speed ISP onto a cable system - moved to a seat on the fence earlier this month with the announcement that it will conduct a limited, multiple ISP test in one of its cable markets this autumn.

AT&T has sent letters to 10 national and regional ISPs, inviting them to participate in the test to be conducted in its Boulder, Colo., market. Some of those ISPs are closely linked to the carrier, such as AT&T WorldNet, and Excite@Home, with which AT&T has an exclusive contract for cable transport until mid-2002. But others represent the company's vocal opposition in the fight over "open access" on cable systems, including RMI.net, Dell.net, MSN, America Online, Yahoo!, Juno, MindSpring and a local ISP run by the Denver Post.

The planned test of what will be known as AT&T Broadband Choice will run from November through May 2001 and will evaluate many of the technical and back-office issues involved in linking several ISPs to a cable network. AT&T will install client software in the PCs of 500 current Boulder subscribers. Those customers then should be able to choose their preferred ISP and connection speed, revise those preferences and adjust that connection speed to the changing capabilities of their hardware.

"There has been a lot of negative talk about our reluctance to do this," said AT&T Broadband President and CEO Dan Somers. "But it's not reluctance. It's just that technologically, one has to do a bunch of things to make it a reality. We're trying to build a flexible technology that gives customers the widest choice."

Open access advocates believe that the field test is evidence AT&T officials are starting to reverse their thinking. "This just proves it's not rocket science," said a GTE spokeswoman, which has conducted a small demonstration of multiple access over cable in Florida for more than a year.

GTE's concern will be the possibility that the client software used in AT&T Broadband Choice will be used to fulfill a "gatekeeper" function and will not allow consumers to exercise completely free choice, said the spokeswoman. "It's not clear if that will act as a fence," she said. "What we want to see is a direct relationship between the ISP and the customer."

The price for using AT&T's cable infrastructure is another point of contention - perhaps the main one, some analysts say - for both sides in the open access tussle, but the Boulder test apparently will not look at network pricing issues.

For Doug Hanson, president and CEO of RMI.net, that question is central to making multiple-ISP cable access viable. "We believe it is technically feasible to do the interconnect with multiple ISPs," he said. "The question is, can we do it in a manner that provides us a product that we can sell competitively to the AT&T Broadband customer base? If the products are not priced in such a way as to give us sufficient margin, then we won't be a viable competitor or participant in the trial."

Open access advocates have maintained that AT&T should give unaffiliated ISPs the same favorable transport terms it gives to Excite@Home. On the other hand, AT&T contends that it is entitled to a rate of return on its cable investment - including the recently approved purchase of MediaOne, originally valued at $62 billion - that will reflect the risks it has taken in assembling the network others now want to use to reach its customers.

Another worry for independent ISPs is AT&T's exclusive contract with Excite@Home, which will extend for about a year after the end of the Broadband Choice test. AT&T has refused to bow to pressure from open access groups to cut that contract short - something its 75% voting control of Excite@Home would easily allow it to do. In March, a new agreement between the carrier and the nation's leading cable ISP extended the relationship through 2008 and guarantees Excite@Home will receive placement equal to any other ISP on the portal or start page for AT&T Broadband.

"Hopefully, this [Boulder test] is the next step toward fulfilling the open access commitments that AT&T made in their statement of principles to the FCC last December," said David Baker, vice president for law and public policy for EarthLink, which operates the MindSpring ISP. "One of those principles is non-discriminatory access for independent ISPs. If Excite@Home is going to be AT&T's `preferred ISP,' then we don't have true open access."

OpenNET Coalition co-director Rich Bond said his group will monitor the trial, watching whether customers can set their start pages, can get content and services from independent ISPs without restriction, and do not have to subscribe to cable to access their ISP.