Kennard Says FCC Will Not Require AT&T to Open its Cable Network

(February 4, 1999) FCC Chairman William Kennard stated today that the FCC will not require AT&T and TCI to open their broadband cable network.  AOL and ISPs have asked the FCC to impose this as a condition for approval of the pending merger of AT&T and TCI.  Kennard made the statement during an impromptu press conference after an address to the AARP in Washington DC.

William Kennard, who is Chairman of the Federal Communications Commission, spoke at a convention of the American Associated of Retired Persons at the Willard Hotel in Washington DC.  His address, and questions from AARP members, focused on consumer issues such as slamming, cramming, complex monthly bills, and access to telecommunications services by persons with disabilities. Immediately afterwards, he spoke with a group of telecommunications writers, who focused their questions on the AT&T TCI merger, and whether AT&T would be required by the FCC to open up its cable network.

Kennard stated:

"Last week, as you may know, the FCC did address this issue -- open access to the AT&T network -- and we indicated, I indicated, it is a serious issue. We are going to continue to study it and monitor it. But at this point, because the Internet is still in its infancy, we decided it was not appropriate for us to today write rules that are going to govern how this network should be developed."

He elaborated that the FCC should not create a disincentive for investment in broadband facilities:

"Well, we certainly want investment in broadband access. That is a good thing for the country. We need these networks deployed quickly. If the government is not going to do it, somebody has got to pay for it.  The FCC should not -- nobody in government should be depressing investment in broadband facilities, because consumers want this.  It is good for them. It is good for the economy."

William Kennard

The FCC has jurisdiction over the proposed merger of AT&T and cable company TCI.   However, other cable companies that are not going through mergers will also be providing broadband Internet access over their cable lines.  Kennard stated that singling AT&T out for imposition of access conditions would not be appropriate at this time.

For example, Kennard stated: "It is not going to be considered as part of the merger, and I will tell you why. If we were to impose a condition on two merging parties, then it would be problematic for other cable operators who want to provide the same service. So, it is an issue, that in my view, needs to be considered in a more comprehensive way, an industry wide way, as opposed singling out just two single players."

However, he left the door open for future FCC action on this issue of access to Internet access via cable.  He also stated that the FCC was concerned about what effect delaying decision on this issue would have.

"Here is the key thing, that I am interested in understanding more. And that is, what is the cost of delay? If we do not act immediately in this area, will it be difficult or impossible to go back later and ensure that there is access to these networks? That is an issue that -- that is kind of the next step in our analysis of this issue."

Kennard concluded:

"What I don't want the agency to do is to compose a set of rules until we have a better understanding of how this marketplace is going to develop. This marketplace is still in its infancy. Remember, we need to have a certain amount of humility to recognize that we cannot predict exactly where it is going. If you cannot predict exactly where a market is going, you cannot presume to have a regulatory solution for every problem that is going to arise."