NCTA Urges Restraint on ITV Regulation
By Ted Hearn -- Multichannel News, 3/19/2001 4:47:00 PM
The Federal Communications Commission should reject calls to define or regulate interactive-television services before they even have the chance to develop a marketplace presence, the cable industry said Monday.
In an FCC filing, the National Cable Television Association said regulatory intervention designed to protect the interactive-TV marketplace was premature because the market barely exists, ruling out the possibility of market failure that typically triggers government intervention.
'Here there is not even an identifiable market, let alone an identifiable market failure,' the NCTA said, adding that government regulation of interactive TV could infringe on the First Amendment rights of cable operators.
The association also said the 'threat of regulation can only serve to exacerbate' the Wall Street 'meltdown' that has decimated Internet stocks and companies developing interactive-TV products.
Interactive TV is a service that combines traditional television programming with Internet functionality, allowing viewers to make purchases, call up additional graphics or data and ship electronic-mail messages.
At the urging of consumer groups and The Walt Disney Co., the Federal Trade Commission refused to approve America Online Inc.'s merger with Time Warner Inc. unless the companies agreed not to use their cable systems to discriminate against competing Internet-service providers that have carriage deals with the company. The FTC's order, however, expires in five years.
In January, the FCC issued a notice of inquiry that asked whether cable operators should be barred from discriminating against unaffiliated interactive-TV providers.
The National Association of Broadcasters, in separate comments, endorsed nondiscrimination rules, claiming that the interactive-TV market was developing rapidly. The NAB said rules were needed today to prevent more intrusive regulation at a later date.
The FCC's review of the interactive-TV market has developed a split between cable operators and major programmers.
Disney -- joined by Viacom Inc., USA Networks Inc. and Univision Communications Inc. -- filed comments with the FCC saying MSOs had the market power to extinguish competing interactive-TV providers and they should be barred from doing so.
'There is no sound basis for believing that vertically integrated broadband distribution providers with market power will voluntarily refrain from discriminatory practices and skewing consumer choice,' the Disney-led group said.
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