FCC Rejects Call for Cable Internet Access Probe

U.S. Federal Communications Commission Chairman William Kennard has turned down a request for an inquiry into whether cable companies unfairly restrict their customers' choices for Internet service providers, saying government intervention would chill overall development of broadband networks.

Kennard yesterday said he was rejecting a recommendation made last month by the FCC's Local and State Government Advisory Committee that the FCC begin investigating complaints about cable companies with an eye toward forcing them to open their networks. The FCC's Local and State Government Advisory Committee is composed of state and local government telecommunications and cable regulatory officials, said Morgan Broman, an FCC spokesman.

Local government officials have complained that cable companies such as AT&T Corp., which is in the process of buying cable franchises throughout the country, and Time Warner Inc. are forcing cable customers to use their own affiliated Internet service providers (ISPs).

Officials in Portland, Oregon, and Broward County, Florida, have passed laws compelling AT&T to open its cable network to rival ISPs as a condition of allowing the transfer of cable operating licenses. Last month, a similar provision failed in San Francisco, with city supervisors approving a measure to consider the issue at a later date. In Massachusetts, a petition drive is underway to allow a statewide vote to decide whether to force cable companies to open their networks.

Local telephone companies and ISPs that are not in the AT&T network, including America Online Inc., have also lobbied for government pressure on the cable companies.

But Kennard, while saying he wants to see an "open Internet," declined to launch a formal inquiry.

"I continue to believe that the initiation by this Commission of a formal proceeding focused exclusively on broadband access would undercut our goal of accelerating the deployment of broadband networks," Kennard wrote in a letter to the commission yesterday.

"A formal proceeding would chill investment in cable modem service, which in turn would reduce the competitive pressure on local phone companies and others who are currently investing in alternative means of providing consumers with access to broadband," he said.

The marketplace is promoting the growth of broadband networks on its own, with cable companies increasingly deploying cable modem service for Internet access, Kennard said. Local telephone companies are implementing DSL (digital subscriber line), while DSL costs are declining, he added. In addition, companies also are investing in satellite and wireless technologies as sources of broadband communications, he said.

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