The Holy Grail of connectivity, high bandwidth, is nearly ready for mass consumption. Unfortunately, the breakthrough making high bandwidth widely available -- cable companies upgrading their cable loops to hybrid fiber-coaxial (HFC) cable, and turning those loops into powerful broadband networks -- is proving to be a Pandora's box for local governments.

Litigation involving a local government is already under way in Oregon. Officials from the city of Portland and Multnomah County are embroiled in a closely watched lawsuit against AT&T over an "open-access" provision to a cable service contract. The provision would force AT&T to let other companies deliver information services, such as high-speed Internet access, over AT&T's cable network -- in effect, creating competition.

Los Angeles and San Francisco are also wrestling with this issue. Los Angeles' Information Technology Agency recommended the city pursue an open-access provision in a future contract with AT&T if necessary, but argued against it at the current time. San Francisco will soon decide its approach to the open-access provision. Its Board of Supervisors (BOS) is considering resolution 990455, which would "support the authority of cities to require cable companies to provide nondiscriminatory access by unaffiliated Internet and other online providers to the broadband cable network."

Portland is the only U.S. city to attach an open-access condition to its cable-services contract with AT&T. San Francisco could become the second with others also making moves.

In July, the Canadian Radio, Television and Telecommunications Commission ruled that Canadian cable providers must share their broadband networks with competing ISPs.

Also in July, U.S Rep. Ed Markey, D-Mass., the ranking minority member of the House Commerce Committee's communications panel, introduced a concurrent resolution which states that "allowing cable operators to offer proprietary and discriminatory access to the Internet only through affiliated Internet service providers deprives consumers of the full benefits of competition." If Congress passes Markey's resolution, the Federal Communications Commission would be required to regulate broadband access under the provisions of the Telecommunications Act, which would result in the opening of cable networks to competition.

High Stakes Scenario

Finding the right balance between private- and public-sector interests is another problem. Industry wants large market shares and profits while local government wants to defend constituents' interests and improve its cities' infrastructures.

Both sides are often at loggerheads because of their conflicting interests, processes and roles. The high-tech arena is another venue for such conflict because each side faces certain risks.

For industry, at stake are the staggering amounts of money required to be competitive in the high-tech marketplace. Billions of dollars have been spent to perform the necessary upgrades to cable networks to make them competitive. Industry's need for speed-to-market can be blocked by inefficient local regulation, as can industry's impetus to innovate.

At stake for local government are prosperity and economic development. The growth and economic strength of cities and towns depend on their strong municipal infrastructures, such as good roads and schools. Now, cities need a strong telecom infrastructure to support business development with high-bandwidth information services, whether voice, video or data.

A real fear exists among communities: Those lacking the appropriate infrastructure may be unable to attract new businesses, which are placing a high priority on an area's high-tech infrastructure when relocating.

Setting the Stage

"It's either going to be a telephone company becoming a cable company or the cable companies trying to upgrade and do the high-speed stuff and later add telephone," said Jane Lawton, president of the National Association of Telecommunications Officers and Advisors (NATOA) and the cable administrator in Montgomery County, Md. "We're seeing a huge convergence."

This convergence is affecting how municipalities deal with telecom corporations delivering new information services to residential and business customers.