For Immediate Release: April 28, 2000

San Francisco, CA – Forced access promotes the development of a "digital divide," deters innovation, and creates economic and regulatory costs according to A Primer on Forced Access, a new study jointly published by the Pacific Research Institute and the Pittsburgh-based Allegheny Institute.

"Forced access, promoted by its proponents as ‘open access,’ is a policy that would require cable providers to provide non-discriminatory access to Internet Service Providers (ISPs) not affiliated with the cable company on their cable line," explain the authors, Sonia Arrison of the Pacific Research Institute and Eric Montarti of the Allegheny Institute.

The Primer shows that six states and four cities have rejected legislation that would force cable providers to open their platform to Internet ISPs at non-discriminatory terms and rates. Only three municipalities have passed forced-access provisions and all three cities are currently in litigation with cable providers over the issue.

"Proponents of forced access argue not for increased competition, but increased numbers of re-sellers. The problem is that there is only one cable line. And no matter how many companies are selling it, it will still be the same line," point out Arrison and Montarti.

A policy of forced access would:

• Stifle innovation by removing economic incentives of tech firms to invest in research and development, causing a deterioration of high-speed access through cable lines;
• Promote false competition between middlemen, quashing real competition;
• Increase prices for consumers by saddling the broadband industry with expensive regulations; and
• Foster a digital divide by pricing low-income Americans out of the market and halting innovations that could better bring Internet access to rural areas.

In addition, Arrison and Montarti state that "interventions that requires cable companies to open their system will deter other innovations and options in new technologies."

They contend that "AOL informed Congress that it agrees in principle to opening up its lines. We argue that these companies should do so only if the agreements are profitable for them. The market, not politics, should decide the issue of line sharing."

"Increased competition will invariably benefit consumers by lowering prices, expanding available products and services, and bringing innovations to the market," conclude Arrison and Montarti.

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For a copy of A Primer on Forced Access, contact Laura Dykes by phone at 415.989.0833 x113, by fax at 415.989.2411, or by e-mail at ldykes@pacificresearch.org or visit PRI’s web site at http://www.pacificresearch.org.

The Pacific Research Institute for Public Policy is a non-profit organization dedicated to the promotion of the principles of individual freedom and personal responsibility. The Institute believes these principles are best encouraged through policies that emphasize a free economy, private initiative, and limited government. By focusing on public policy issues such as health care, welfare, education, and the environment, the Institute strives to foster a better understanding of the principles of a free society among leaders in government, academia, the media, and the business community.