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AT&T Pushing Cable-Modem a la Carte

8/04/2004 3:11 AM Eastern

AT&T Corp., once a cable operator with a decidedly deregulatory agenda, has opened a new a la carte controversy for the cable industry.

In a request to the Federal Communications Commission earlier in the year, AT&T asked for a rule that would require any broadband-transport provider -- meaning cable and phone companies -- to sell high-speed Internet access on a stand-alone basis.

AT&T is concerned that if cable and phone companies bundled access and voice-over-Internet-protocol service, VoIP companies that didn’t sell access could not compete against the bundled offering.

The company said it was particularly concerned about the bundling practices of phone companies.

“This would make it effectively impossible for rival VoIP providers to sell service to the incumbent’s DSL [digital-subscriber-line] customer base, for those customers would clearly be unwilling to pay twice for the same service,” AT&T said in a May filing in connection with regulation of VoIP services, a proceeding that remains open at the FCC.

In July, the National Cable & Telecommunications Association responded that AT&T’s proposal was unnecessary and harmful in that regulation of broadband-facilities providers would stifle investment and innovation.

When AT&T was a cable operator, it rejected arguments by America Online Inc. and other Internet-service providers that wholesale access to cable-modem facilities was essential because Internet-access subscribers would not want to pay twice -- once to the cable company and against to a competing ISP.

AT&T has abandoned marketing traditional local and long-distance phone service to consumers. Instead, the long-distance giant is concentrating on VoIP, promising to enter 100 markets by the end of the year.

In its comments, AT&T said it remained legitimate for cable and phone companies to bundle access and VoIP, provided that the access service was offered a la carte. But it added that the FCC would need to impose safeguards to ensure that the a la carte access price represented an economically realistic option to the bundle.

September