GTE sues for AT&T network access [resend]

[Ron Gdovic <rgdovic@usa.net>]

http://www.post-gazette.com/businessnews/19991026internet1.asp

Title: GTE sues for AT&T; network access

GTE sues for AT&T; network access

Firm seeks to provide high-speed Internet access via its TV cables

Tuesday, October 26, 1999

By Ken Zapinski, Post-Gazette Associate Editor

GTE Corp. filed suit against AT&T; Corp. in federal court in Pittsburgh yesterday in order to gain access to AT&T;'s network and provide high-speed Internet access over its television cables.

The suit makes the city the latest battleground in a fight that has stretched across the country, from the Washington, D.C., halls of the Federal Communications Commission to local squabbles in Portland, Ore.

The lawsuit comes as Internet service providers (ISPs) in Western Pennsylvania lobby Pittsburgh City Council to force AT&T; to give them access as part of the city's renewal of AT&T;'s cable television franchise agreement.

At issue is who will have a crack at the high-speed data stream that AT&T; can provide over the cables it acquired when it purchased Tele-Communications Inc. for $54 billion earlier this year.

AT&T; Cable customers in certain areas can receive "always-on" Internet service that can be dozens of times faster than conventional dial-up modem service. But AT&T; requires those customers to use @Home, an Internet access service in which AT&T; has a controlling stake.

GTE, America Online and other ISPs, such as Pittsburgh's Stargate Industries and Telerama, want a model akin to the telephone system: Bell Atlantic telephone customers can use their phones to access Bell Atlantic's own ISP, or any other ISP of their choosing.

"The Internet has exploded because of competition," said William P. Barr, GTE general counsel. But AT&T; Cable customers "don't have a choice. They're forced to accept @Home as their only on-ramp to the Internet."

GTE's suit charges that AT&T;'s exclusive arrangement with Excite@Home is a violation of federal antitrust laws. The suit also names Excite@Home and Comcast Corp., a Philadelphia cable company provider which is part-owner of Excite@Home, based in Redwood, Cal.

AT&T; and Excite@Home officials criticized GTE, saying the company has not allowed competitors adequate access to its own telephone network as required by the 1996 federal Telecommunications Act. Comcast officials could not be reached for comment. But cable industry executives have complained loudly in the past that since they are spending billions to upgrade cable systems in order to provide a data link, they should not be forced to give access to their competitors.

Until now, GTE has worked the fight from behind the scenes, lobbying officials at local, state and federal levels to take on the cable companies. The Texas-based telecommunications company persuaded officials in Portland, Ore., and elsewhere to require access as part of their local cable agreements. A bill is currently pending in Harrisburg that would force cable companies to give access to competing Internet providers.

GTE ran a trial program with America Online in Florida that was intended to undercut AT&T;'s argument that accommodating competing ISPs on the cable network would be a technical nightmare.

But GTE, which provides Internet service to 554,000 customers and is a national Internet "backbone" provider, has had little luck at the FCC. The commission has declined to wade into the fray except to say regulation of cable Internet service is a national issue. FCC Chairman William Kennard believes that allowing individual communities to create their own rules would be disastrous.

After AT&T; filed suit in Oregon, a federal judge ruled against the company. AT&T;'s appeal of that decision is to begin Monday.

Fear of a legal tussle with AT&T; was part of the reason Pittsburgh City Council members backed off from forcing the access issue when the council signed off on the TCI purchase earlier this year. But local ISPs are pushing council to take up the issue as it negotiates a renewal of the company's franchise agreement, which expires Sunday.

GTE and representatives of the City Council lobbying effort said the two moves are unrelated.