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Press Release Monday, February 28, 2000 |
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Washington, D.C. -- Consumer Federation of America (CFA),
Consumers Union (CU), and the Media Access Project (MAP) today
released a detailed analysis of official filings on open access to
the broadband Internet by American Online (AOL) and AT&T in the
U.S. and abroad.
The study demonstrates how AOL and AT&T have sharply reversed
their position on open access since announcing plans to purchase
major cable companies. The study is entitled Who
Do You Trust? AOL and AT&T… When They Challenge the Cable
Monopoly or AOL and AT&T…When They Become the Cable
Monopoly?
Consumer groups are releasing the study as the heads of AOL and
Time Warner prepare to testify before Congress on February 29 about
their planned merger. The groups are asking lawmakers to probe
whether AOL/Time Warner or AT&T can be trusted to keep their
promises to provide open access without a legal obligation to do
so.
AOL, the nation's largest online company, is seeking to acquire
Time Warner, the world's largest media corporation and the nation's
second-largest cable provider. The largest cable operator,
telecommunications giant AT&T, would also own more than ten
percent of AOL/Time Warner through its pending acquisition of cable
company Media-One.
"Before AOL and AT&T bought cable companies," said Mark
Cooper, CFA re-search director, "they both argued vigorously for
government-backed obligations to provide open access to cable. They
no longer do, although they still support such a legal obligation on
facilities owned by other companies."
"AOL and AT&T have done a unique flip-flop," said Gene
Kimmelman, co-director of CU's Washington office. "They are asking
policymakers to take a hands-off approach to open access, claiming
they can be trusted to do what they previously claimed could only be
done through regulation. By saying "trust us," the companies have
made honesty an issue. We believe it is appropriate to scrutinize
whether these companies can be trusted to open their cable networks
to allow citizens and small businesses to send and receive data
without restriction on the Internet service providers (ISPs) of their
own choosing."
"I assume that AOL and AT&T mean what they say in written
statements to public officials," said MAP's president Andrew Jay
Schwartzman. "They have eloquently ar-gued why truly open access will
happen only if it is mandated by law. They also con-firm the
feasibility of enforcing a simple non-discrim-inatory policy. We
agree: thous-ands of innovative ISP's serving entrepreneurs and
millions of individual citizens will never be able to purchase their
own cable wires. Those ISPs still need the pro-tec-tions that these
two huge corporations once demanded."
"The events of the past year make it patently obvious that public
policy to determine the free flow of commerce and information in the
"Internet Century" cannot be left to the whims of the large
corporations whose commercial interests change with every merger or
acquisition," Cooper said.
The following page contains key findings of the 40-page study. For
further information, contact CU at (202) 462-6262.
Consumers Union, publisher of Consumer Reports magazine, is an
independent and nonprofit testing, educational and information
organization serving only the consumer. We are a comprehensive source
of unbiased advice about products and services, personal finance,
health, nutrition and other consumer concerns. Since 1936, our
mission has been to test products, inform the public and protect
consumers.
The Consumer Federation of America is the nation's largest
consumer advocacy group, composed of over two hundred and forty state
and local affiliates representing consumer, senior, citizen,
low-income, labor, farm, public power and cooperative organizations,
with more than fifty million individual members.
Media Access Project is a twenty-six year old nonprofit, public
interest law firm that represents the interests of the public to
speak and to receive information via the electronic media of today
and tomorrow.
The study reviews the detailed descriptions of market structure
and elements of open access presented in official AOL and AT&T
filings - at the Federal Communications Commission, the Canadian
Radio-Television and Telecommunications Commission, and the
Department of Telecommunications and Information Services of the City
of San Francisco - before they sought to become cable companies
through merger.
FACTORS CREATING A NEED FOR OPEN ACCESS
The report also documents the very detailed recommendations that
AOL and AT&T offered policymakers to ensure open access.
NINE KEY ELEMENTS OF OPEN ACCESS
