FCC: Hands Off The High-Speed Net

By Bloomberg News, Special to CNET News.comU.S. regulators should maintain a hands-off approach to overseeing the high-speed Internet business to encourage the fledgling technology's growth, a new Federal Communications Commission staff report concluded. America Online is leading a campaign to make cable companies such as AT&T open their high-speed systems to unaffiliated Internet service providers. While the FCC has opted not to impose such a requirement, several local governments have voted to require so-called open access. The report found about 1 million out of 40 million residential Internet subscribers use the Net over high-speed connections. The report is aimed at discouraging more local governments from taking action because the technology is still in its infancy. ""I hope that this will be a useful source of information for local authorities,"" said FCC Chairman William Kennard, who hoped that they'd ""come to the conclusion that the best policy for now is watchful restraint."" The FCC's Cable Services Bureau, which wrote the report, concluded that ""the mere threat of regulation could slow down this deployment"" of high-speed services, Bureau Chief Deborah Lathen said. The bureau's staff held two closed-door meetings with representatives from cable and Internet companies, local governments, and consumer groups to discuss the issue. The agency found ""a lot more consensus on many of these issues"" than expected, Lathen said. None of the parties could offer a clear definition of what ""open access"" should mean, Lathen said. While some thought it should include access to programming, others thought it should include leasing of equipment at steep discounts, she said. ""It's difficult to talk about a regulatory scheme for something no one can come up with a consensus on,"" Lathen said. Consumer groups blasted the FCC's report, saying that issuing a report was incompatible with the agency's stated goal of ""watchful waiting"" on the issue. Consumers Union, Media Access Project, Center for Media Education, and OMB Watch also wrote to Kennard criticizing the process the agency took in reaching conclusions in the report. ""It is sadly ironic that the Commission should proceed in secret to prepare a document purporting to provide guidance on an issue of such national importance,"" they wrote. The groups are in favor of an open access requirement. AT&T and other cable companies oppose the open-access requirement, saying they're spending billions of dollars to upgrade cable networks for high-speed Web connections, while AOL and other ISPs aren't spending a dime. If required to sell connections to competitors, they argue that they'll lack the incentive to make the investment. Copyright 1999, Bloomberg L.P. All Rights Reserved.