Story: Kennard Opposes Open Cable Access in Speech to NCTA, 6/16/99.

Kennard Opposes Open Cable Access in Speech to NCTA

(June 16, 1999) FCC Chairman William Kennard criticized the decision of the City of Portland to mandate open cable access, and the U.S. District Court decision which upheld it, in a speech to the National Cable Television Association in Chicago on June 15.

See also, Kennard Speech to NCTA, 6/15/99.

"There are 30,000 local franchising authorities in the United States. If each and everyone of them decided on their own technical standards for two-way communications on the cable infrastructure, there would be chaos," said Kennard in his speech to the NCTA. "The Information Superhighway will not work if there are 30,000 different technical standards or 30,000 different regulatory structures for broadband."

"The market would be rocked with uncertainty; investment would be stymied. Consumers would be hurt," Kennard continued. "That is why I've asked my general counsel for options in light of the recent Portland decision. In fact, that decision was released on June 3rd, and I'm surprised that I haven't yet received a petition for declaratory relief."


FCC Chairman Wm. Kennard

Federal Communications Commission Chairman William Kennard spoke at the meeting of the National Cable Television Association (NCTA), the trade association representing most of the cable industry. His comments were well received by his audience.

In June 1998 AT&T announced that it would acquire Tele-Communications, Inc. (TCI) as a wholly owned subsidiary. This provided AT&T with one of the leading cable television companies in the country, with nearly 11 million customers. TCI provides cable service in Portland and Multnomah County.

Internet service providers, incumbent local exchange carriers, and others argued that the Congress, the FCC, or local authorities should require AT&T to open its cable networks to competitors. Earlier this year the FCC approved the AT&T-TCI merger without imposing any such conditions.

See also, Summary of AT&T v. Portland.

However, the City of Portland, and the surrounding Multnomah County, conditioned their approval on AT&T opening its cable network to competing ISPs. AT&T sued, and earlier this month, lost. AT&T announced today that it would appeal.

Chairman Kennard also stated that his vision is "multiple broadband pipes serving America's homes. At least four or five facilities-based competitors. DSL, cable modem, terrestrial wireless, and satellite. That's my vision for our broadband future. Because that is the best way to serve America's consumers. Multiple facilities-based carriers, competing robustly to bring all sorts of wonderful content to America's homes."

"So with competition and deregulation as our touchstones, the FCC has taken a hands-off, deregulatory approach to the broadband market. We approved the AT&T-TCI deal without imposing conditions that they open their network," said Kennard.

Kennard acknowledge that the Baby Bells argue that this is unfair because "they have to open their networks, but cable doesn't." Kennard stated: "But let's look at the facts, we put a proposal on the table for the Baby Bells to operate advanced services in a de-regulated environment. The Bells have been given the roadmap to their liberation. All they need is the courage to compete."

See also, Summary of Broadband Access Bills in the 106th Congress.

Several Senators and Representatives from rural areas have introduced bills recently that provide that the phone companies providing broadband access by ADSL will not have to sell or make available their broadband access services to their competitors, if they meet certain conditions. Cable penetration is less in rural areas, so the most probable vehicle for broadband access there in the short run is ADSL.

The National Cable Television Association has publicly opposed some of this legislation.

Kennard stated in his NCTA speech that "Last week, I met with Senate Minority Leader Daschle and a group of his colleagues from rural states. I have not met a group of public officials so excited about the promise of the Internet and so committed to making sure that it reaches the people living in the small towns and on the farms in their states. I look forward to working with these Senators in bringing advanced services to the people of rural America, to knit them into our national network, to give them the opportunities to enjoy the promise of this technology."

Extended Excerpts from Kennard Speech
(See also, transcript of entire speech.)

Here is my vision for broadband in America. Multiple broadband pipes serving America's homes. At least four or five facilities-based competitors. DSL, cable modem, terrestrial wireless, and satellite.

That's my vision for our broadband future. Because that is the best way to serve America's consumers. Multiple facilities-based carriers, competing robustly to bring all sorts of wonderful content to America's homes. ...

Sometimes people talk about broadband as though it is a mature industry. But, the fact is that we don't have a duopoly in broadband. We don't even have a monopoly in broadband. We have a NO-opoly. Because, the fact is, most Americans don't even have broadband.

We have to get these pipes built. But how do we do it? We let the marketplace do it.

If we've learned anything about the Internet in government over the last 15 years, it's that it thrived quite nicely without the intervention of government.

If fact, the best decision government ever made with respect to the Internet was the decision that the FCC made 15 years ago NOT to impose regulation on it. This was not a dodge; it was a decision NOT to act. It was intentional restraint born of humility. Humility that we can't predict where this market is going.

Who among us could have predicted the incredible advances of the past few years? Who at the beginning of this decade could have predicted the embrace of e-mail by all ages, the birth of the World Wide Web, the advances in communications technology?

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. Call it a high-tech Hippocratic Oath.

So with competition and deregulation as our touchstones, the FCC has taken a hands-off, deregulatory approach to the broadband market. We approved the AT&T-TCI deal without imposing conditions that they open their network.

Now, the Baby Bells say that it's unfair - that they have to open their networks, but cable doesn't; that there's a lack of parity. But let's look at the facts, we put a proposal on the table for the Baby Bells to operate advanced services in a de-regulated environment. The Bells have been given the roadmap to their liberation. All they need is the courage to compete.

We decided to let the market forces churn while we carefully monitor the situation, and the marketplace has responded. The amount of investment in broadband and the number of deals concerning it over the past four months have been staggering - and not just in cable.

Wireless companies like Motorola and Nextel have announced partnerships with other firms; satellite companies like DirectTV, Lockheed Martin, and TRW have made moves to provide broadband through their technology; and DSL providers have entered into deals with Prodigy, AOL, and Microsoft.

And where cable modem service has been introduced, DSL is following. To spur on this competition, we gave fast-track approval to allow Bell Atlantic to offer bulk discounts on DSL service to large ISPs like Prodigy and AOL.

The competitive fires are burning. The market has a degree of certainty, and investment dollars have followed. Yet some local cable franchising authorities want to try a different approach. Instead of a national policy of de-regulation and competition, they want a local policy of regulation.

There are 30,000 local franchising authorities in the United States. If each and everyone of them decided on their own technical standards for two-way communications on the cable infrastructure, there would be chaos.

Imagine if we had a highway system where every town could set the parameters for the size of cars and the size of lanes. Or how to get onto on-ramps and off-ramps. We wouldn't be able to drive to the store, much less to another state.

Similarly, the Information Superhighway will not work if there are 30,000 different technical standards or 30,000 different regulatory structures for broadband.

The market would be rocked with uncertainty; investment would be stymied. Consumers would be hurt. That is why I've asked my general counsel for options in light of the recent Portland decision. In fact, that decision was released on June 3rd, and I'm surprised that I haven't yet received a petition for declaratory relief.

See, it is in the national interest that we have a national broadband policy. The FCC - as I've said before - has the authority to set one, and we have. We have taken a deregulatory approach, an approach that will let this nascent industry flourish.