Kennard Hopes Multiplicity Of Broadband Pipes Will End Calls for Open Cable Access

The FCC is intent on ensuring that consumers have a plethora of choices when it comes to accessing high-speed Internet services, says Chairman William E. Kennard. Speaking at last week’s Forum on Technology and Innovation in Washington, Mr. Kennard said the FCC wouldn’t be satisfied if, several years from now, consumers had broadband access only through telco DSL (digital subscriber line) services and cable modem platforms. “A duopoly isn’t competition,” he declared.

The FCC will promote competition between all types of high-speed Internet access providers—wireless, satellite, DSL, and cable TV companies—“and then get out of the way and let the broadband marketplace take over,” he said. “If the end game is DSL v. cable modems, we will have failed in a matter of policy.”

Regarding Internet service providers’ (ISPs’) push for open access to cable TV companies’ high-speed facilities, Mr. Kennard said the debate “goes away if we have more than two pipes going into the home. That’s why the FCC is working hard to pump out more spectrum [allocations].”

In comments that he acknowledged later might have been “a little too candid,” Mr. Kennard described a “stark” disparity and a “certain amount of unfairness” in the fact that cable TV companies can roll out broadband services free from the network unbundling requirements that govern incumbent local exchange carriers’ (ILECs’) high-speed facilities.

But, he said, “You’re never going to put cable on the same level as the telcos unless you have a drastic rewrite of the [Telecommunications Act of 1996], which I don’t see on the horizon anytime soon.”

The FCC has the jurisdiction to require nondiscriminatory access to cable TV operators’ broadband platforms, Mr. Kennard said, but he didn’t spell out his views further. “It’s not expressly contemplated in the [Communications Act of 1934] or the [1996 Act], but I do believe that we have the authority,” he said. He gave no indication that the Commission might be considering drafting rules granting ISPs nondiscriminatory access to cable TV plant.

He did acknowledge, however, that implementing any type of open access requirements would be a struggle for the five FCC Commissioners. Citing such “complex” issues as access pricing and defining network elements and nondiscriminatory access to cable modem platforms, he said the “more difficult question is what do we do if we assert that jurisdiction.”

Mr. Kennard said he “doesn’t agree” with America Online, Inc., Chairman and Chief Executive Officer Steve Case’s view that it’s easy to craft regulations that ensure nondiscrimination. “I spent a lot of my time grappling with those regulations under Title 2 [of the Communications Act], and they’re very complex,” he said.

ISPs, Cable TV Renew Rivalry

Mr. Case, who also spoke at the forum, continued his push for a “light touch” in ensuring that ISPs have open access to cable modem platforms. His proposal, which was laid out before a Senate panel last month, would require cable TV companies to allow nonaffiliated ISPs to access their modem plant on the same terms and conditions as their affiliated ISPs obtain access (TCR, April 29).

Mr. Case labeled “ridiculous” the cable TV industry’s argument that requiring nondiscriminatory access to cable modem platforms would dry up their ability to access the capital markets.

“There’s no evidence of a lack of interest in funding anything related to the Internet,” he said. “Investment will continue to pour into the marketplace, irrespective of” whether cable TV companies are required to provide nondiscriminatory access to their broadband pipes, he said.

The Telecommunications Act might require a slight rewrite to bring it in line with the recent proliferation of Internet services, but not anytime soon, according to Mr. Case. “At some point, you’re probably going to have to bite the bullet and have some harmonization of policies,” he said. But AOL isn’t arguing for “putting common carrier telephone regulations on the cable industry,” he said.

Milo Medin, At Home Corp. founder and chief technology officer, disputed Mr. Case’s claim that open access requirements wouldn’t affect his industry’s access to capital. He also described technological barriers that he said would make it next to impossible—and extremely expensive—for cable TV companies to open up their high-speed platforms.

Duane Ackerman, chairman and CEO of BellSouth Corp., said Congress and the FCC should refrain from imposing any regulations on ILEC and cable TV company provision of broadband services. He favors “no regulation for cable” and “less regulation” for ILECs.

TeleCompetition Report, May 27, 1999