CABLE ACCESS REPORT STIRS CONTROVERSY; BOTH SIDES CLAIM TO INCREASE COMPETITION, PREVENT MONOPOLY.

Byline: Deborah Sullivan and Rick Orlov Staff Writers

Advocates of open access to high-speed cable Internet service and cable companies that want to maintain exclusive controls over the lines sparred Wednesday over a report recommending a hands-off approach.

At a public hearing of the City Council Information Technology and General Services Committee, both sides argued that their position would prevent monopoly and increase competition.

The report, issued last week by the Information Technology Agency, concludes that sharing high-speed cable lines is legal and technically feasible, but it said the city should wait and see whether a monopoly develops among cable operators before requiring them to open their lines to competitors.

The issue has become a national hot button since communications giant AT&T acquired the nationwide cable company Media One last year in hopes of offering not just television transmission but Internet access up to 50 times faster than phone connections allow.

Three Information Technology Commissioners who supported a strong open-access policy stepped down last week, and one, former Commissioner Robert Duggan, said the dispute was the sole reason for his resignation.

``I felt that the issue of open access was being manipulated by the mayor,'' he said.

Mayor Richard Riordan has opposed forcing cable television providers to make their systems available to other Internet service providers, and that position was a factor in the three resignations.

However, Riordan appeared to soften his stand as he spoke Wednesday during his monthly ``Ask the Mayor'' show on radio station KFWB-AM (980).

``My position is not in concrete. This is an incredibly complex issue,'' the mayor said. ``Where I'm at now, and I'm learning all the time, is we should not set a local policy. The (Federal Communications Commission) should have a national policy so we have consistency through the country.''

Competing Internet service providers have demanded access to AT&T's lines.

In recent years, cable franchises have benefited business at the expense of consumers, George Kieffer, an attorney representing GTE, said at the hearing.

``Today the cable companies are back seeking another monopoly,'' he said. ``Using city rights of way, the cable companies want the exclusive right to control access to the Internet through cable.''

He argued that the facts of the agency report point toward opening high-speed cable modems to multiple Internet service providers, although its conclusions urge the city to refrain from regulatory action.

``The report's conclusions are not supported, even by its own findings,'' he argued.

Advocates for cable companies said that while they question the report's provisions for possible future open-access requirements, they support its recommendation that the city let the high-speed Internet market develop before stepping into the fray.

The argument that forcing open access will heighten competition disguises the economic interests of companies seeking access, such as AOL and GTE, said Howard Symons, a lawyer representing the Los Angeles Cable Operators Association, not the interests of the customers.

``These are simply masks behind which the old monopolists are hiding,'' he said.

Meanwhile, Riordan said he is considering an approach in which the cable companies would be allowed to install the new technology but make it so other Internet service providers would be allowed access, depending on any final federal policy.

``What we have to do is provide the incentives to get these companies to make the hundreds of millions of dollars of investments that will be needed to bring cable modems into every house,'' Riordan said. ``Open access was tried in Canada, and the result was no investments were made.''

Riordan also said on his radio show that the commissioners who resigned - Duggan, Commission Chairman Alan Arkatov and Commissioner Joyce Emerson - had a right to disagree with his position.

Neither Arkatov nor Emerson offered direct criticism of the mayor when they resigned, although sources close to the commission have described both as disagreeing with the mayor on high-speed Internet access.

``They disagreed with my policy, which they have the right to do,'' Riordan said. ``But as mayor I should be setting these policies. Obviously, the mayor and the City Council have to decide because we make up the government.''

The committee will decide in two weeks whether to adopt the staff report. Subsequently, the full Council will weigh in on the matter.