SNAP CALL

City Hall makes a quick pick in an ugly battle over Internet and phone service. Prepare to pay the price.

The barrage of full-page newspaper ads and television commercials didn't help. Nor did the swarm of lobbyists that had buzzed the backrooms of City Hall. Craig Schmid needed something else.

Here were two of the nation's telecommunications heavyweights, duking it out over who would control access to the Internet. On one side was AT&T, which plans a major upgrade of its St. Louis cable system; on the other, Southwestern Bell, the region's dominant provider of local phone service.

For weeks, Schmid and other members of the St. Louis Board of Aldermen had been whipsawed by two competing visions of the future -- AT&T promising better cable service and a new residential phone system; Bell and its allies warning that AT&T was angling for an Internet monopoly and less competition.

Mayor Clarence Harmon, an early supporter of open access, says past cable scandals were one reason he delayed signing the open-access bill for two weeks. "I was initially concerned it was dealt with so quickly by the Board of Aldermen," he says. "I became convinced it wouldn't stifle competition."
Jennifer Silverberg
Mayor Clarence Harmon, an early supporter of open access, says past cable scandals were one reason he delayed signing the open-access bill for two weeks. "I was initially concerned it was dealt with so quickly by the Board of Aldermen," he says. "I became convinced it wouldn't stifle competition."

Now, as Aldermanic President Francis Slay Jr. pushed for a final vote, some of his colleagues didn't know which way to go. Should they side with AT&T, which owns a cable system, formerly known as TCI, notorious for poor service and high prices, or go with Bell, which has held a lock on local residential phone service since the breakup of Ma Bell in 1984? It was like being asked to yank the least ugly alligator from a bucket.

Schmid had heard all he wanted from the lobbyists. Now what he needed was a crystal ball. "What I really need somebody to do is predict the future," the 10th Ward Democrat told the other aldermen. "I need somebody to tell me where these technologies are going to be a month from now, three months from now, a year, five years, 10 years from now."

It had been less than a month since Slay introduced a bill that would require AT&T to open its cable lines to competitors offering Internet access. The company wanted to steer business to @Home, which is partially owned by AT&T. Competing Internet service providers such as America Online fear that this would put them out of business. Only one committee hearing had been held. Consumer groups were sharply divided. The city communications director, a mayoral appointee, was against the bill.

No wonder some aldermen were confused as they prepared to vote on Oct. 29. During floor debate, Ald. Lewis Reed (D-6th), rose to clarify the finer points of broadband services, including "frame relay, fractional T1's, ISDN, PRI and BRI.

"You have to look at all those," Reed told puzzled colleagues.

"You might as well have been speaking German, French or Spanish, because most of us do not know what you were talking about," quipped Ald. Sharon Tyus (D-20th).

Yet, under heavy pressure from Southwestern Bell, the board voted 21-7 to approve Slay's bill. And on Nov. 12, Mayor Clarence Harmon gave Bell and its allies what they wanted. With his signature, St. Louis became only the sixth local government -- and the third-largest in the nation -- to mandate that its cable operator provide open access.

City Hall insiders say it was the most intensely lobbied fight they've ever seen. But after the dust settled and a winner emerged, it still wasn't clear exactly what had been decided.

One thing is certain: The Board of Aldermen put St. Louis on the front line of a high-stakes national battle over the future of the Internet. Critics who contend the city should have left well enough alone say St. Louis is risking delays in getting a state-of-the-art telecommunications system while inviting a costly lawsuit.

Elsewhere, AT&T, which has more than 500 cable franchises, has been winning most of its political battles. Seattle rejected open access earlier this year. Just last month, Denver voters overwhelmingly approved a renewal of AT&T's cable franchise without open access after a campaign that cost the company nearly $1.4 million. In two cases where local governments have mandated open access -- Portland, Ore., and Broward County, Fla. -- AT&T has filed lawsuits, claiming local officials have no right to require cable franchisees to open their lines to competitors. "They're fighting this open-access issue all over the country," says Larry Stone, director of the city's communications division. "And while it's not widespread, it's just enough of a gnat in the eye to be very irritating."

In addition to the best litigators money can buy, AT&T has a serious bargaining stick. It says it won't bring state-of-the-art cable services to any area that mandates open access. That threat carries much more than the possibility of no high-speed Internet access: There would be no alternative to Southwestern Bell for residential phone service and no improvement to cable-television service. AT&T has shown it will punish cities that don't play by its rules. For all the praise Portland has won for standing up to AT&T, the city has no high-speed Internet service through cable lines. The system is being upgraded, but the company says it won't provide high-speed service until litigation is decided.

Deb Seidel, AT&T governmental-relations director, says the company will install broadband first in places where it can get the quickest return on its investment. Without open access, which Seidel refers to as "forced access," St. Louis is on the company's Top 10 list for a system upgrade, she says. With open access, the city falls on the company's priority list. "AT&T has a limited number of capital dollars at any point," Seidel says. "It's going to be in areas where it's politically better for us to go."

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