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FCC fights ISPs on cable
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July 21, 1999: 4:04 p.m. ET
Commission will urge appeals court to reject local regulation of cable Internet
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NEW YORK (CNNfn) - The Federal Communications Commission will urge a federal appeals court to deny local governments the power to require Internet companies access to high-speed wires owned by cable television firms.
FCC Chairman William Kennard told the Federal Communications Bar Association in San Francisco Tuesday that he will file a friend-of-the-court brief with the Ninth Circuit Court of Appeals "so we can explain to the court why it's important that we have a national policy" limiting local regulation.
Kennard's statements came in response to an Oregon federal court's decision last month that the city of Portland had the authority to require AT&T Corp. to open its high-speed cable lines to competing Internet service providers. The case now is on appeal before the Ninth Circuit in San Francisco.
His comments also follow the release of a working paper earlier this week entitled "The FCC and the Unregulation of the Internet," which called the lack of local regulation over Internet access "a crucial factor" in encouraging online growth.
"In a market developing at these speeds, the FCC must follow a piece of advice as old as Western civilization itself: 'First, do no harm,'" Kennard said in his speech Tuesday. "Call it a high-tech Hippocratic oath."
The appeals court's decision is critical to the future of telecommunication companies like AT&T (T), which have invested billions recently to snatch up local cable companies with the idea of expanding their Internet base. Opening up their cables to competitors, the companies claim, effectively makes those investments worthless.
Besides, Kennard argues, the Internet has experienced extraordinary growth thus far without the benefit of access to competitors' wires. Instead, he suggested, denying local governments regulatory authority on this issue would encourage further investments in broadband networks.
"There is no sign that as this nascent market matures that the cable operator has an incentive to deny [Internet service providers] access to their platform," Kennard said. "There is no sign that consumers do not have other avenues to get broadband connections if they don't want to use cable. And finally, it is not clear that the perceived benefits of mandating open access outweigh their apparent economic and technological costs.
"So we decided to let the market forces churn while we carefully monitor the situation, and the marketplace has responded with enormous investment in broadband -- and not just in cable."
Kennard's comments drew a harsh reaction from ISP advocates.
Greg Simon, co-director of the openNet Coalition, a national group of more than 200 independent service providers battling for high-speed Internet access, said he was "astonished that a high public official would put the federal government at the service of a massive communications company."
"Doing nothing while AT&T turns a cable monopoly into an Internet monopoly is not a policy, it's surrender," he said.
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