Source: Dollars and Sense, September 2002
Title: "Slamming Shut Open Access"
Author: Arthur Stamoulis
Evaluator: Scott Gordon Ph.D.
Student Researcher: Daryl Khoo

Technological changes, coupled with deregulation, may soon radically limit diversity on the Internet.

The 7,000 Internet Service Providers (ISPs) still available today are quickly dwindling to just two or three for any one locale. They are being bought out by large monopolies that also control your local phone, cable, and possibly, satellite internet.

The Federal Communications Commission (FCC) and Congress are currently overturning the public-interest rules that have encouraged the expansion of the Internet up until now. Much of this is due to the lobbying tactics that cable and phone industries use to mute the competition, take advantage of technological changes and push for deregulation to consolidate market control.

A policy of open access currently makes it possible for people to choose between long-distance phone providers. This open access policy has also allowed one to choose between AOL, MSN, Jimmy's Internet Shack, and thousands of other ISPs for dial-up Internet access. Phone companies would like to use their monopoly ownership of the phone wires to have total control over phone-based Internet services as well, but telecom regulations are in place that prevent them from blocking out other companies.

Unfortunately, as the general shift from dial-up to broadband Internet access gets underway, the FCC is moving in with a series of actions that threaten to shut down open access. In 2002 the FCC decided to characterize high-speed cable Internet connection —largely controlled by AOL-Time Warner, AT&T Broadband, and other large corporate players—as an "information service" rather than a "telecommunications service." This designation frees cable broadband from telecom rules, giving the cable companies that own broadband lines the ability to deny smaller ISP companies access over their cable lines. Cable itself is a monopoly in most towns; so anyone who signs up for cable internet will typically have no choice other than to use the cable company's own ISP.

Such degree of market control spells trouble for freedom of information on the Internet. Cable and phone monopolies would become clearinghouses for information. Corporations and government agencies will hold tremendous power to filter and censor content. ISPs already have the capability to privilege, or block out, content traveling through their web servers. With the demise of open access regulations, Internet content will likely resemble the "monotonous diet of corporate content" that viewers now receive with cable television.

The monopoly power being handed over to the cable and phone companies will enable them to sell different levels of Internet access, much like they do with cable television. For one price, you could access only certain pre-approved sites; for a higher price, you could access a wider selection of sites; and only for the highest price could you access the entire World Wide Web. This is already the way that many wireless Internet packages operate. It's clear that "marginal" content that isn't associated with e-commerce, big business, or government would have a hard time making it into the first-tier, "basic" packages. This isn't censorship, we'll be told. It's just that there is only so much bandwidth to go around, and customers would rather see CNN, the Disney Channel, and porn, than community-based websites, such as www.indymedia.org.

Update By Arthur Stamoulis

Most people still do not understand how differences in regulations governing different technologies threaten the future of the Internet—and industry is continuing to use that to their advantage.

In November 2002, the Federal Communications Commission (FCC) approved Comcast's $47.5-billion purchase of AT&T Broadband, creating the largest cable company in the world. Neither the FCC nor the Department of Justice imposed any rules forcing the newly formed behemoth to offer customers the Internet Service Provider (ISP) of their choice. Thus, 30% of cable subscribers now have little-to-no say over what high-speed cable broadband ISP they will use. It's simply Comcast or nothing.

Senator McCain's effort to allow phone companies to bar other ISPs from the DSL lines—the Consumer Broadband Deregulation Act—thankfully went nowhere during the 107th Congress. While behind closed doors lobbying has undoubtedly continued, the FCC has also done little on this front in the first half of 2003, focusing instead on dismantling the few remaining media ownership regulations for television, radio and newspapers.

Of course, the elimination of ownership rules for television broadcasters could also have an impact on the Internet. In 1996, television stations were given the right to the "digital" spectrum free of charge, another one of Congress' gifts to industry worth billions upon billions of dollars. This digital spectrum gives owners the option to broadcast as many as five channels on the space previously needed for just one. As television stations typically get preferred treatment with cable companies in terms of transmission deals or must-carry regulations, media conglomerates that can buy up lots of TV stations now will likely have considerable access to cable bandwidth. This is especially valuable as TV and the Internet merge into next-generation interactive television (ITV) applications.

Whether public interest or community-access programming will have a place in this brave new Internet world will depend upon how loudly people demand it. Fortunately, the biggest untold media story of 2003 is that people are coming together to demand their media rights. The Bush administration's deregulatory bonanza was met with loud protest from groups as disparate as the National Organization for Women and the National Rifle Association, the Catholic Conference of Bishops and the AFL-CIO. Online progressive organizations like MoveOn.org and Common Cause have also mobilized their members in the fight for media democracy. People from coast to coast have protested in the streets on these issues.

Readers interested in learning more about how regulations and technological changes affect the Internet should turn to the Center for Digital Democracy (democraticmedia.org), a group that has provided the best policy analysis expertise on these issues for years. Activists should also get in touch with Media Tank (mediatank.org), a leader in grassroots media democracy organizing. Finally, people should follow the progress of Free Press (mediareform.net), a new project aimed at becoming a national clearinghouse on media issues, started by veteran media critic Bob McChesney.