[1606] in Commercialization & Privatization of the Internet
Re: HR 3515
daemon@ATHENA.MIT.EDU (Mitch Kapor)
Sun Dec 1 11:21:01 1991
Date: Sun, 1 Dec 1991 11:19:57 -0500
To: com-priv@psi.com
From: mkapor@eff.org (Mitch Kapor)
HR 3515, introduced by Rep Jim Cooper (D-Tenn.) of the subcommittee on
Telecommunications and Finance, is an effort sponsored by the American
Newpaper Publishers Association to restrict entry of the Bell Operating
Companies into businesses providing content-based information services.
Judge Green, acting under pressure of the Appeals court, recently lifted
the ban which prohibited telcos from offering these kinds of services,
creating a situation in which new legislation is the only means by which
entry may be restricted. Publishers, print and electronic, fear that
telco entry into content will mark the end of any opportunity for a
competive market in information services. They argue that the controller
of the conduit has too many opportunities and too much incentive to use
their underlying monopoly to compete unfairly.
The Cooper bill would permit telcos to enter information services out of
their local area, but would require a very stiff "entry test" before they
would be permitted to compete in-region. Conditions for entry are
predicated on the emergence of true local loop competition around the turn
of the century, probably through some sort of digital radio system (dubbed
a PCS - personal communication system). Cable television, AT&T, Bellcore,
and others are all working on such systems today. 50% of homes in any area
would have to have access to an alternative local telephone service, and
10% of them would actually have to be subscribers to the service in order
for BOC's to offer content-based services. In addition there are many
other "safeguards" designed to ensure fair competition.
It is quite unlikely that the Cooper Bill has enough support to win a
majority support in the committee. In addition, despite the plausibility
of the concerns underlying the bill, it registers as a purely negative
proposal. It does not offer any sort of positive vision. Newspaper
publishers are as much at sea as telcos when it comes to understanding how
to stimulate the development of a rich panoply of online services.
EFF's Open Platform proposal for ubiquitous, affordable ISDN was presented
to the committee as an alternative test that might be applied to condition
telco entry into content services. If the goal is to stimulate a healthy
information marketplace, the best thing Congress could do would be expand
universal service requirements to include narrowband ISDN. If anyone could
easily order a 64kb data pipe, there would be an upsurge of innovative new
services developed by technical entrepreneurs who would use this platform
in intensive real-world experiments. This would create the basis for
healthy competition more than anything else.
Mitchell Kapor (mkapor@eff.org)
Electronic Frontier Foundation
