``Padilla Proposal Will Hurt Los Angeles Consumers,'' Says Hands Off President Wolf.

Business/News Editors & High-Tech/Government/Legal Writers

LOS ANGELES--(BUSINESS WIRE)--June 7, 2000

Today, the Los Angeles City Information Technology and General Services Committee, led by Councilmember Alex Padilla, voted to establish access regulations on the city's high-speed cable Internet service.

This decision introduces a chilling chapter in the city's policy toward the future of technology. Similar proposals have been rejected in the California legislature and 15 other states, as well as a unanimous rejection by the Federal Communications Commission. The proposal will next move to the full council.

In response, Hands Off The Internet's president, Christopher Wolf, a nationally recognized Internet attorney, issued the following statement:

"At a time when this issue has died virtually everywhere else, the L.A. City Council makes Net access subject to government regulation. This decision will significantly hurt consumers by lessening competition in high-speed Internet access as well as competition in local telephone services. Consumers have benefited precisely because city regulators haven't had a seat in marketplace negotiations among competing Internet providers.

"Councilmember Padilla, who announced and introduced the proposal, is under the false impression that there are minimal costs in regulating Internet access in Los Angeles. Ultimately though, Los Angeles residents will bare the brunt of the very real costs of Padilla's proposed regulations."

Last summer, the Los Angeles Information Technology Agency urged the city to take a "wait-and-see" policy to ensure an environment where competing technologies can prosper. The Agency determined that regulations were premature in this developing market and reported that the city's cost to address access regulation disputes is likely to exceed hundred of thousands of dollars per year, at a minimum.

Joel Fox, the Los Angeles-based president emeritus of the Howard Jarvis Taxpayers Association, today stated: "This new proposal will ultimately cheat L.A. residents. The city's Internet market remains in its development stage, and the Agency's previous evaluation and recommendations for a `hands-off' policy remain applicable and true to this day."

Hands Off The Internet urges a reconsideration of Councilman Padilla's proposal.

Hands Off The Internet (www.HandsOff.org) is a coalition of Net users united in the belief that the Internet's growth stems from the ability of entrepreneurs to expand consumer choices and opportunities without worrying about government regulation. More than 80,000 Californians have signed a petition to keep the Internet unregulated so they can enjoy the benefits of Internet competition.