AT&T Reverses Stance on Open Access, Potentially Unlocking High-Speed Internet

Strategic Insights -

AT&T's abrupt change of heart has set off a chain reaction in the world of high-speed internet access. The telecommunications giant, poised to announce a deal with MindSpring Enterprises, has agreed to give Atlanta-based Internet service providers (ISPs) access to millions of high-speed cable lines owned by AT&T. This reversal comes as a surprise, given AT&T's recent acquisition of Tele-Communications Inc. and its growing dominance in the industry. However, the agreement, set to take effect in mid-2002, may signal a shift towards more open access and increased competition in the high-speed internet market.

Key Takeaways:

  • AT&T will allow MindSpring Enterprises to access millions of high-speed cable lines, potentially unlocking the market for other ISPs.
  • The deal, set to take effect in mid-2002, marks a significant reversal for AT&T, which had previously resisted calls for open access.
  • The agreement will give ISPs greater flexibility to choose their own content providers and potentially lower the cost of high-speed internet access.
  • Critics, including Andrew Schwartzman, president of the Media Access Project, argue that the deal does not go far enough in providing open access, as AT&T will still have significant control over the network.
  • The stakes are high for ISPs, with millions of users expected to switch to high-speed internet access in the coming years.
  • MindSpring's potential partnership with AT&T may be a double-edged sword, as it could provide access to high-speed lines but also limit the company's options in the future.

Statistics:

  • 56,000: The maximum transmission speed of dial-up modems.
  • 27-100 times: The speed increase offered by cable modems.
  • $40-$80: The monthly price of high-speed internet access.
  • 1,000: The number of companies represented by the U.S. Internet Service Provider Association (ISP Association).
  • 2 years: The estimated time frame for AT&T's chosen ISP to gain a head start in the market.
  • $70 billion: The purchase price of Tele-Communications Inc. by AT&T.
  • $62 billion: The purchase price of MediaOne by AT&T.

Sources:

  • "Michael E. Kanell, AT&T is poised to announce today it has reached a deal with MindSpring Enterprises", Atlanta Journal-Constitution, no date listed.
  • "Barbara Dooley, U.S. Internet Service Provider Association president, 'It's a good thing as far as an example goes, but the fact they've done a deal with MindSpring doesn't solve the underlying issue: AT&T wants control of the customer'", Washington Post, no date listed.
  • "Andrew Schwartzman, Media Access Project president, 'This is a big set of advances, but it is far short of open access'", no date listed.