EarthLink, consumer advocates want
more info from Comcast

Copyright 2002 Knight Ridder/Tribune News Service
Knight Ridder/Tribune News Service
Philadelphia Inquirer...09/11/2002
From LexisNexis

Akweli Parker
From The September 11, 2002 Edition Of CED Broadband Direct

PHILADELPHIA -- Consumer advocates and at least one large Internet provider, fearing Comcast Corp.'s growing influence over the Internet, are demanding that the Philadelphia-based company divulge details of a complex agreement it reached last month with AT&T Corp. and AOL Time Warner Inc.

The Federal Communications Commission has made public reams of documents related to Comcast's pending $53.1 billion purchase of AT&T's cable division, AT&T Broadband. But Comcast so far has kept secret parts of last month's related three-way deal with AT&T and AOL Time Warner.

The consumer advocates are up in arms because they say the agreement could shut competitors out of the high-speed Internet market, reducing consumers' choices and limiting Internet content. And they say it shows the kind of anticompetitive muscle Comcast could flex once it buys AT&T Broadband and becomes the undisputed king of cable, with 22 million subscribers nationwide.

The missing information "is obviously highly material" to the larger acquisition, said Andrew J. Schwartzman, president and chief executive officer of the Media Access Project, a media watchdog. "We were actually quite surprised that it hadn't been submitted."

Joining the consumer groups in demanding that the FCC make the material public is EarthLink Inc., the national Internet service provider based in Atlanta, which fears it may get locked out of the biggest market for broadband customers if the merged AT&T Comcast Corp. is not ordered by the government to open its high-speed Internet network to competitors.

Comcast said allegations that it was planning to monopolize broadband service were "wildly speculative and inaccurate."

The beginnings of the brouhaha can be traced to last month, when AT&T, Comcast and AOL Time Warner agreed on a way for Comcast and AT&T to dispose of AT&T's 27.6 percent stake in Time Warner Entertainment _ a division of AOL Time Warner Inc. that includes cable-TV systems, the HBO cable network and the Warner Bros. film studio. Comcast was to inherit that stake as part of its December agreement to buy AT&T Broadband.

As part of last month's deal, AOL Time Warner bought future access to the merged AT&T Comcast's fast-Internet system.

The consumer advocates and rival Internet providers turned to the FCC last week, asking it to order Comcast to disclose the high-speed Internet portion of its deal with AOL.

Comcast, however, said the deal was proprietary and had not provided details.

Michelle Russo, an FCC spokeswoman, said the commission was reviewing the requests to obtain the fast-Internet exhibit from Comcast. She said that if FCC staffers deemed the information necessary, they would ask for it.

The FCC will decide later this year whether the merger is in the public's interest and whether it can proceed. The Department of Justice is also looking at the transaction.

Analysts expect the deal to be approved before year's end.

Among the consumer groups' fears is that the Comcast-AOL agreement signals the start of an era in which the openness of the Internet will be supplanted by a pay-to-play model, in which content not affiliated with network providers such as Comcast will get shunted aside by the online offerings of corporate partners.

Comcast, however, said the opposite was true: The agreement with rival AOL Time Warner, it said, proved it was willing to open its lines to competitors.

"We absolutely cannot understand their arguments about the (Internet service provider) agreement with AOL. This is one of several negotiated agreements between independent ISPs and our two companies," said Joe Waz, vice president of external affairs for Comcast.

"The FCC has consistently encouraged such agreements," he said, "and this proves yet again that we are committed to offering consumers a choice of ISPs."