Sachs: Cable VoIP's a Welcome Mat to Vendors

12/21/2003 7:00 PM Eastern

Cable operators have no intention of blocking the services of unaffiliated companies that want to provide Internet-based phone calls to cable's 16 million high-speed data customers, National Cable & Telecommunications Association president Robert Sachs declared.

In response to calls for regulatory oversight of cable-modem networks, the NCTA has said such a move was unnecessary, because cable's data customers are free to roam the Web and attach Data Over Cable Service Interface Specification-compliant devices to the network.

"It would be inconsistent if we were to say — whether it's Vonage [Holdings Corp.] or some other [VoIP] user — that should somehow be disallowed if a customer of ours wishes to use that service to enhance their broadband experience," Sachs told reporters at NCTA headquarters here last Thursday during a year-end briefing.

Vonage and other voice-over-Internet protocol (VoIP) providers can offer phone service to cable broadband customers without the permission of the cable company. But VoIP players, at least for now, are not seeking a mandatory right to lease cable transmission capacity to provide their services.

Mandatory transmission access is something Internet-service providers like EarthLink Inc. have tried to get the Federal Communications Commission to impose on cable MSOs, but the agency has refused.

The tables could turn, though, if federal courts insist that cable's high-speed data platform should be open and that the FCC decides not use its forbearance authority to shield cable.

Cable companies have spent $84 billion sprucing up their networks so they can provide digital video services, high-speed data, and VoIP services. But Sachs said they are not going to put heat on competing VoIP providers to help defray the capital expenditure by imposing access fees.

Sachs boasted that cable companies would become VoIP's top players in the quest to take market share from the dominant Baby Bells, which also are crafting VoIP strategies.

"We believe that cable will emerge as the leading retail provider, as the competitor to the Bells, of VoIP services," Sachs said. "The competition is likely to be intense. The Bells are likely to respond."

In the competitive battle, Sachs vowed cable companies would not use their network power to strip out voice bits flowing between cable-modem subs and third-party VoIP providers with which the cable company did not have a commercial agreement.

"That is correct," Sachs said.

Cable's VoIP approach might allay anti-competitive concerns raised by Yahoo! Inc.,, Microsoft Corp., The Walt Disney Co. and various trade and consumer groups, which have formed a coalition advocating government-imposed "Net neutrality." Such a policy would bar high-speed data network owners like cable from using that control to injure competing Web merchants and content providers.

In the first quarter of next year, the FCC is expected to launch a rulemaking intended to determine where VoIP fits in the regulatory scheme. FCC chairman Michael Powell has clearly staked out a position that intrusive regulation is inappropriate, a position shared by NCTA.

"Our companies are of the view that this is a new technology, and that there should be a minimal amount of regulation," Sachs said.

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