Cable Shows New Evidence of Anti-Competitive Behavior, Says Internet Ventures, Inc. General Counsel.

CHICAGO--(BUSINESS WIRE)--June 23, 1999--

The general counsel of Internet Ventures, Inc. today expressed renewed concern that cable's monopoly control of high-speed Broadband cable Internet would result in limited choice for consumers and for Internet-dependent businesses.

In remarks made today at the Competitive Telecommunications Association conference here, IVI counsel Christopher Matern pointed to several existing situations as evidence of the power that the cable monopoly can hold over customers, advertisers and competitors, and called on the American public to express support for competitive Broadband Internet to the Federal Communications Commission (http://www.ivn.net/strat/fccform.cgi).

Matern, who spoke on the "Open Access For The Internet: Should It Be Required?" panel, specifically cited claims by ISPs that certain AT&T/TCI and Time Warner cable systems refuse to accept advertising from ISPs because of their respective ownership stakes in the @Home and Road Runner Broadband Internet services. He also commented on the 10-minute limitations on streaming video imposed by @Home.

"As long as the cable industry is allowed to be the gatekeeper for high-speed Broadband Internet, the cable industry - and the cable industry alone - will decide who gets access, and at what price," said Matern. "Already, there are signs that cable is using that power to protect its core video business, and to cripple competition.

"Internet Ventures and other Broadband providers have been able to deliver streaming video content with no limitations for more than two years," Matern added. "It would appear that @Home's policy is rooted less in technical issues, as its cable owners have claimed, and more in cable's interest in controlling video delivery to subscribers.

"Even more disturbing, though, are reports of cable's anti-competitive stance on ISP advertisements," Matern noted. "As cable enters the Internet business, small ISPs whose advertising dollars once were sought by local systems now are being told that cable - in many locations, the only way to advertise on television - no longer is an option."

About Leased Access 

Internet Ventures filed a petition June 1 for a declaratory ruling asking that the Federal Communications Commission confirm "that Section 612 of the Communications Act requires that cable operators provide leased access channels to ISPs," in order to provide the public with immediate and unrestricted access to high-speed Broadband Internet services.

IVI has announced "leased access" applications in four markets: with AT&T/TCI in Durango, Colo. and Spokane, Wash.; with Century Communications in Ventura, Calif.; and with MediaOne in Stockton, Calif.

IVI also has begun the "leased access" process with several other cable operators, including District Cablevision in Washington, D.C. Internet Ventures currently offers PeRKInet(r) to more than 1,600 subscribers in conjunction with ATI Medford in Medford, Ore.; Avenue TV Cable in Ventura; Cox Communications in Humboldt County, Calif.; and Davis Communications at Eastern Washington University.

PeRKInet(r) serves as a single-source portal of more than 75 Internet-delivered television broadcast stations, and was created with the expressed intent of delivering the "widest possible diversity of information sources and diverse sources of video programming." Subscribers are able to use a prominent button on the home page of IVI ISP's to access the PeRKInet(r) portal.

IVI has compared the concept to existing cable television models, in which an antenna improves consumers' ability to receive broadcast stations, and e-mail and data services become ancillary to video. Under the current structure, PeRKInet(r) subscribers download speeds up to 256Kbps for $29.95 per month (fee includes cable modem rental).

PeRKInet(r) uses a Phone Return Cable Internet technology which combines regular phone lines and existing cable TV plant to deliver Internet access speeds substantially greater than X2 and K56Flex modems.

PeRKInet(r) offers downloads up to 256kbps downstream for PeRKInet Limited users and up to 10Mbps for commercial users. Upstream data is moved via telephone modems at up to 33.6kbps or via a frame relay connection at up to 128kbps. Customers receive data on a PC equipped with a cable modem and an 0Ethernet card.

About Internet Ventures

Internet Ventures (http://www.ivn.net), which offers dial-up and high-speed Internet access services to markets in the United States with populations of less than 500,000, currently owns and operates 14 local ISPs in California, Colorado, Idaho, Oregon and Washington.

Its PeRKInet(r) high-speed Internet access system, which utilizes patented technology, offers members the ability to connect to the Internet at up to 256Kbps, a speed that is more than four times faster than conventional X2 or Flex 56 modems.

IVI's current operations also provide comprehensive and market-specific Internet services in Ventura, Humboldt, Del Norte and San Joaquin Counties, Calif.; LaPlata, Mesa and Montezuma Counties, Colo.; Kootenai County, Idaho; Jackson, Josephine and Klamath Counties, Ore.; and Spokane County, Wash.