The Incredible Shrinking Internet

When Cable Monopolies Rule the Web, Everyone Loses

Above a pizza joint and a discount fabric store at the corner of Broadway and Grand sit the offices of Bway.net, a small internet service provider, or ISP as they're called in the trade. For those who want their internet a wee bit more personalized-and local-than the likes of AOL or Juno, Ian Stevelman and Kate Lynch and their gang of 21 are the guys for you. Thise high-tech wizards, who come in every manner of top hair, facial hair, skin color, and dress code, wire grassroots groups like the East Harlem Tutorial Project, the YMCA's International Camp Counselor Program, and the NYC Parks Department, which offers free computer use to kids. They also host 600 Web sites, for customers ranging from AnneFrank.com to Warpeace.org and the Institute for Urban Family Health.

One of the few mom-and-pop ISPs in New York, Bway may be the only one with a shop open to the public. Need a new Web site design? Ready for a high-speed connection? Just climb the stairs to the second floor. Among the 5000 home and business customers Bway has garnered in five years is one 80-year-old man who carts his computer in on a hand truck by subway from Far Rockaway. "I'm proud that we're open to the public," says Stevelman, looking cool in a black T-shirt and parachute pants with red buckles. "One of our goals is to get the unwashed masses on the Internet."


Bway.net’s Stevelman: “If there’s content on any of our Web sites that bothers Time Warner, they can block it.”
photo: Tara Engberg
Bway.net’s Stevelman: “If there’s content on any of our Web sites that bothers Time Warner, they can block it.”

Your local government-authorized monopolist wields scary power: They can control what you can reach on the Internet, how fast you see it, even whether you see it at all.


He'd also like to get everyone up to speed, with DSL phone connections. Trouble is, he says, about 40 percent of New Yorkers who want to get DSL can't, for technical reasons. It's not just people in outer-borough tenements who lack access; it's people like the executives in the Empire State Building. For them, the only choice for broadband service is cable, sold through a giant corporation like Time Warner or RCN.

"If you can't get DSL and you get cable," says Stevelman with an air of finality, "I'm out of the loop."

And you're out of a choice of provider—and a lot else that comes with that choice. Cable companies, you see, unlike the phone guys, aren't legally required to open their networks to all ISPs. So if you sign up for Internet service with Time Warner or RCN or Cablevision, you're agreeing to play by their rules, to see what they want you to see, to get their brand of e-mail and their approved search engine. Period. Will this hurt Bway? Sure it will, and the over 6000 other small or specialized ISPs across the country. But it could hurt you even worse.

Your local government-authorized monopolist wields scary power: They can control what you can reach on the Internet, how fast you see it, even whether you see it at all. Driven by business interests and revenue-generating alliances, the cable companies can make the information superhighway harder to navigate—unless you go where they want you to go. Using both carrot and stick, they can make it just not worth your trouble to travel to all those fascinating little byways that were once so enticing.

"They're going to create a walled garden," says Jeff Chester, executive director of the Center for Media Education. "The Internet we know was the fountainhead of diversity, competition, and innovation, where all traffic could flow freely and all points of view were available. That Internet is being hijacked by media monopolists from the cable industry."

Those monopolists will have means of making you pay. Under their rules, the only way for you to use a homegrown ISP like Bway is to shell out twice—once for the monopolist and once for the local provider. In most cases, you won't even have that option, and if you did, you still wouldn't end up with a true Internet service provider. Instead, little outfits like Bway or BlackPower.net or the Christian Living Network would remain dependent on the big corporation to move their information on and off the Web.

Now, the big boys could share their transit system with any ISP that pays them. But right now, this just ain't happening, although a couple of the heavy hitters are testing the feasibility of letting on a few others—mostly other big boys like Juno.

"If they only open it a little," says Alexis Rosen of Panix, a 32-person ISP in Manhattan serving the high-tech elite, "they damage the small players. We are one of those small players."

Imagine an Internet highway where the small players—or obscure destinations—get no exit ramps. Free-speech advocates worry about the formerly wide-open road gradually getting riddled with speed bumps, one-way streets, and dead ends.


One-Way Streets

Shopping on the Net has been like browsing an endless city dense with narrow warrens of unique little shops. You never know what you'll find. And speeding along with broadband, shopping for info or objets should be easier than ever—unless you find yourself heading down a one-way street.

Say you connect to the Internet through AT&T's cable service, and you're searching for that out-of-print adventure story you loved as a kid. You're using AT&T's house-brand portal, Excite@Home, because that's the path of least resistance. If you go "shopping" for books on Excite@Home, you will automatically be zipped along to Amazon.com. If you do a search for out-of-print books, the screen will still be plastered with ads for Amazon.com. Maybe the search engine will come up with Powell's Books of Portland, Oregon—or, maybe it won't.

"Information on search engines may be limited to those Web sites that the ISP has a personal business stake in providing," says David Butler of Consumers Union.

Powell's, a family-owned institution, doesn't have the money to pay for ads on Excite@Home, says Darin Sennett, who designs Powell's Web site. If your search engine doesn't list Powell's, then you lose out. Why? "We have more used and out-of-print books in one place than anywhere else, cheaper and in better shape," says Sennett. "Amazon comes to us for them. We're the source."

If you're determined, you can find your way to Powells.com. "But," says Sennett, "you have to swim upstream."


Speed Bumps on the Highway

When you sign up for cable broadband, you expect to travel fast. And when you go where the cable operators make money, you will speed along. But they can regulate traffic so that other Web sites come up . . . well, really slow.

Info comes to you faster when the cable operator has "cached" it—literally stored it—on servers or data hubs near your home. "Caching is keeping the content local and refreshed and easily available," Chester explains. If you live in New York, for example, "your ISP may keep content from San Francisco near your house in Brooklyn; they don't have to go to San Francisco."

More and more, though, content providers are forced to choose between paying cable companies for speedy caching or offering pages that are slow to download. If the site you want to reach can't or won't pay, you'll have to wait. If you do, you'll be more patient than most. Studies show that most people will wait three to nine seconds for something to download, then they'll click goodbye.

"It's like opening your refrigerator rather than making a trip to the convenience store," explains Chester. "Are you hungry? Just open up the AOL Time Warner refrigerator. It's all there. But if you want alternative perspectives on health care, pro-choice options, alternative retailers, or independent bookstores, it will take longer."

So what will happen to those small, esoteric sites, the nonprofits, the political voices? "If the good search engines go slower," says Bway's Stevelman, "people will have less information. And all the small ISPs will be wiped out."


The Dead End

The really scary scenario for advocates of open access to broadband is that cable companies have the power not just to slow info, but to block it completely. If Time Warner should hook up with a big search engine, posits Rosen, the company could close the gate to others.

Already some search engines are accepting money to rank paying companies higher than others, so a query about running shoes will result in a list of products from the advertiser. For regular consumers, it's not always apparent which search engines have paid placement and which don't. Now, with the rise of cable monopolies, search engines may be forced to bring up the names of businesses the broadband providers have arrangements with. "As it is," Rosen adds, "pure search engines like Google are getting rarer."

Even more frightening, cable providers could just rope off certain parts of the Internet that they feel are immoral or inimical to their interests. It's a free-speech issue that's got people in many quarters upset, from the ACLU and the Consumers Union to a host of ISPs.

"If there's content on any of our Web sites that bothers Time Warner," says Stevelman, who's pretty worked up about this, "they can block it."


Open the Highway

The solution, say free-speech advocates, is to unclog the pipes. Give access to any ISP that will pay a fair rate. When you have a choice of 10 Internet providers—or 30—and the one you've signed up for won't take you where you want to go, you can just switch.

"It's in each competitor's interest to give as much content as quickly as possible," says Wendy Rosenberg, a senior executive at Juno, "because others are waiting to take that customer."

That's the way it now works with DSL. Under the national Telecommunications Act of 1996, phone companies must allow all comers to use their wires. But up to now, cable service has been regulated by municipalities, not the feds.

Could cities and towns demand open access? They could, but so far they've been pretty wimpy. Take New York City, which has franchise agreements with 11 companies, including a recently renewed deal with Time Warner, to provide cable broadband. The city simply accepted Time Warner's assurances that the company would try to provide access. "We did raise the issue of openness," says one New York City government source, "and we got what we could at the time."

Great. It's true that the two big cable monopolies, Time Warner and AT&T, claim they intend to grant access to other ISPs—if they can work out the technical problems. Both have small pilot projects under way to test feasibility. Meanwhile, west of the Mississippi, a company called Wide Open West is building a brand-new high-speed cable network to serve the residential and small-business market, and it will take any ISP that wants in. "Our goal," says senior vice president Jim Higgins, is to liberate cable subscribers from the Time Warners of the world." Because their fiber-optic network is new, Wide Open West can build in the capacity for access, where the older companies will have to do what Higgins calls a "retrofit."

It's not clear yet how the trials by Time Warner and AT&T will work out or how many ISPs they'll let on. Advocates say 20 to 25 is a good number in large markets. What they definitely don't want is for the feds to force them to open up.

"We think legislation is not necessary to make it happen," says Mike Luftman, a spokesman for Time Warner Cable. "It's going to happen because there's a marketplace reason for it to happen."

In Texas, Time Warner has made ISPs an offer they can't accept, according to The Washington Post. The big-muscle guys are demanding that independent ISPs fork over 75 percent of subscriber fees and 25 percent of advertising and other revenues in exchange for riding their pipes. Granted, this is just Time Warner's initial proposal, but the ISPs are outraged.

If this is Time Warner's idea of a "marketplace" solution, no wonder open-access advocates, who include many of the ISPs who stand to be excluded, want the government to step in. Federal action could come in the form of legislation—two bills dealing with the issue are now languishing in Congress—or regulation by the Federal Communications Commission and the Federal Trade Commission.

The FCC is now being pressed hard on this—more so since a federal appeals court in June defined cable broadband as a "telecommunications" service subject to federal oversight. The agency could require AOL Time Warner to open the pipes to all ISPs and to give equal treatment to data passing through—including equal caching of content and "nondiscriminatory" menus and navigation aids. The FTC could also go to court to block the merger if AOL and Time Warner don't agree to let other ISPs use the system.

The outcry is growing stronger. People are waking up to the very real threat cable monopolies pose to the open nature of the Internet. One media advocate, Anthony Riddle of Manhattan Neighborhood Network, likens the stranglehold of the cable companies to Soviet domination of the media. When he went to Russia with former president Jimmy Carter a few years ago, to help write laws on TV and radio autonomy, he asked a Russian what the worst thing had been about government control of the media. He still remembers the answer. "All the wires ran through a switch on one man's desk," said the former Soviet citizen. "He could pull the switch at any time."

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