January 18, 2002

Wrestling with ATT Broadband: Why Vertically Integrated Monopolies Are Bad Things

A couple of years ago I was one of many co-authors of an article, "Access and Innovation Policy for the Third-Generation Internet," that begged and pleaded with the FCC to mandate competition in the business of providing cable-modem customers with internet connectivity. The FCC appeared on the point of allowing cable companies to deliver their cable-modem internet customers, hogtied, to a single monopoly Internet Service Provider (ISP) chosen by the cable company. This was in striking contradiction to the regulatory thrust of the past two generations, which had required natural monopolies to open up their services and provide a level playing field to all who wished to connect and compete for the business of their customers.

The FCC did indeed decide to let cable-modem companies--in my case, ATT--require that I purchase ISP services from its choice of one and only one provider: @Home. This did indeed have the effects of diminishing the pace of innovation and the quality of service: since I couldn't go elsewhere and still use my broadband cable-modem connection, what incentive did @Home have to care? But the absence of competition had still worse effects. @Home crashed into bankruptcy. Because it had been the monopoly supplier of ISP services, there was no alternative provider to whom I could switch as it became clearer and clearer that @Home's days were numbered. My house lost its internet connectivity for the better part of a week after @Home's collapse as ATT struggled to set up its own ISP network.

And now it turns out that ATT is acting exactly like @Home with respect to the pace of innovation and the quality of service. I'm still a captive customer, after all: what incentive does ATT Broadband Interactive have to care?

This was brought home to me when, three days after the new ATT network was up and running, my ability to connect to U.C. Berkeley's email servers suddenly vanished. I poked around Berkeley, and found that ATT's Domain Name Servers (DNS) were not properly reporting my internet address--12-233-31-156.client.attbi.com--when queried by Berkeley's servers. Berkeley reported that I should

...send the following information to your Internet Service Provider (ISP) so that they can resolve the problem:
Posted by DeLong at January 18, 2002 10:20 AM

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