Policy

NCTA Opposed to Net Discrimination Ban

9/14/2004 8:16 AM Eastern

Washington -- The cable industry is opposed to regulations that would ban high-speed-data networks from discriminating against competing applications providers that do not own their own facilities, National Cable & Telecommunications Association president Robert Sachs said Tuesday.

In a speech here at a forum sponsored by state regulators, Sachs said policies designed to ensure “Net neutrality” would disadvantage cable companies that have invested billions of dollars in facilities reaching millions of consumers. Free-market approaches were the answer, he added.

“As the number of facilities-based broadband providers increases, such regulation is not only discriminatory, but it is counterproductive, because it limits the incentive for additional investment and innovation in deploying those facilities,” Sachs told the Federation for Economically Rational Utility Policy.

“Benign-sounding names, like Net neutrality and layers’ model, are not economically rational,” he added.

FERUP was founded within the past year by Charles Davidson of the Florida Public Service Commission and Susan Kennedy of the California Public Utilities Commission. Both have called for a new regulatory model to accommodate advances in technologies, such as voice-over-Internet-protocol telephony.

VoIP pioneer Vonage Holdings Corp. has called on the Federal Communications Commission to ensure that cable and phone companies do not engage in unfair competition in effort to dominate the nascent VoIP market.

Vonage has told the agency that network owners could easily manipulate bit streams to give network-owned VoIP services priority over Vonage services. The company added that at least one Internet-service provider in Washington state canceled a customer’s Web-access service because Vonage did not have a contract with the ISP.

Vonage is a Web-based VoIP provider that offers service to consumers with pre-existing high-speed-data connections. It does not control wires running to homes and offices.

“As long as consumers can use their broadband Internet to access any application they choose, at a reasonable speed and at a reasonable latency threshold, Vonage can compete with its cable/telco competitors,” Vonage told the FCC in May.

Responding to a question from the floor, Sachs said regulation based on nondiscrimination principles was unnecessary because no one has presented evidence of discriminatory conduct that restricts cable-modem-subscriber access to content and applications resident on the Internet.

Cable companies, he added, “live by Net neutrality principles every day.”

Echoing comments made by Comcast Corp. CEO Brian Roberts earlier in the year, Sachs said the NCTA opposed a major overhaul of current telecommunications law.

“If narrow, targeted fixes are needed, then that's one thing, but a complete overhaul may bring unintended consequences, including more years of litigation and regulatory uncertainty,” he added.

FCC chairman Michael Powell said last month that current telecommunications laws are broken because they have failed to anticipate changes enabled by the Internet, especially in the area of voice communications.

Leading members of the House and Senate have said that they plan a thorough rewrite of the Telecommunications Act of 1996 next year.

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