News

Retailers Take Cable Beef to FCC

1/27/2003 7:59 AM Eastern

A group of major consumer-electronics retailers are complaining to federal
regulators that cable operators are frustrating the commercial availability of
cable modems.

The group, headed by Best Buy Co. Inc., sent a letter Monday to the Federal
Communications Commission requesting enforcement of laws and rules designed to
promote the competitive availability of modems and TV set-top boxes.

"It would behoove the competitive markets for the [FCC] to make crystal-clear
that the imposition of arbitrary economic and technical hurdles in the part of
critical new products in no longer acceptable," said Bradbury H. Anderson, vice
chairman and CEO of Best Buy and chairman of the Consumer Electronics Retailers
Coalition.

In the letter, Anderson complained that cable operators charge the same
monthly fee for cable-modem service even if the subscriber has supplied his or
her own modem.

Retailers claim that consumers in such a market have no economic incentive to
procure modems outside of the cable industry's internal supply chain.

This issue -- in addition to others cited in the three-page letter to FCC
chairman Michael Powell -- was ventilated last year by a group of cable-modem
makers unaffiliated with cable MSOs.

The CERC's letter said it considered the issues raised by the modem makers a
"significant, direct and immediate concern" to hardware retailers.

Best Buy, based in Eden Prairie, Minn., is the largest U.S.
consumer-electronics retailer. Coalition partners include Circuit City Stores
Inc., Good Guys Inc. and RadioShack Corp.

The National Cable & Telecommunications Association did not have an
immediate reaction. However, the NCTA has in the past taken strong exception to
allegations made by modem makers and retailers.

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