2008 CABLE SHOW: Obama OK With Tier Pricing

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NEW ORLEANS—Democratic Party presidential frontrunner Sen. Barack Obama (D-Il.) would likely exempt tier-pricing models from net neutrality regulation if broadband network owners used them to maintain congestion-free access to the Internet, former FCC chairman William Kennard said Sunday.

Obama, who needs about 115 more delegates to secure his party's White House nomination, has consistently supported net neutrality regulation while recognizing that network owners need to manage their systems and attract investment capital, Kennard said.

“Where that has typically led us is to supporting tier pricing systems as long as they're not discriminatory,” said Kennard, an outside communications policy adviser to Obama.

Kennard didn't explain whether or not Obama would have problems with applying surcharges to bandwidth hogs that have exceeded their monthly consumption limit, an approach Comcast is debating internally.

Kennard spelled out various elements of Obama’s telecom policy vision on a panel with other proxies for the major presidential candidates. Former FCC chairman Michael Powell stood in for all-but-certain Republican Party presidential nominee Sen. John McCain (R-Ariz.), and former FCC Democrat Susan Ness addressed the policy views of Sen. Hillary Clinton (D-N.Y.).

If Clinton is elected president, she will continue to fight for net neutrality because, Ness said, the “open architecture of the network has served the nation well and she would like to see it remain open.”

But like Obama, Clinton agreed that network owners need a degree of flexibility.

“You need to be able to manage your network as long as are not doing it an anti-competitive way,” Ness said

She added that Clinton recognized that even well-intentioned regulation can miss its target.

“She firmly believes in the law of unintended consequences,” Ness said.

Powell outlined a bold free-market blueprint for the Internet from a potential McCain administration.

“While he supports Internet freedom, he's very, very skeptical of efforts to create new legislation,” Powell said.

After Kennard mentioned that  net neutrality was a complex and evolving issue, Powell said the lack of stability suggested that Internet regulation was inappropriate.

“That's exactly when Congress ought to leave their pen in their pocket,” Powell said. "I think there's nothing worse than the legislature passing a poor understanding of technical concepts, a poor understanding of the consequences of the statute that finally once on the books, you'll have a heck of a time ever removing."

Another hot topic raised by moderator Kathleen Abernathy, a former Republican FCC member, was the a la carte sale of cable programming.

Current FCC Chairman Kevin Martin has spent last three years trying to coax cable operators into selling channels on an a la carte basis. Martin's effort has been strongly resisted.

Ness indicated that the FCC has no legal authority to impose a la carte and a Clinton White House wouldn't support a la carte mandates.

“It doesn't make any sense. Why? Because you're going to eliminate a lot of really good minority programming,” Ness said. “She would not go there. She does not think that's the appropriate vehicle for getting programming out.”

Obama, Kennard said, has not staked out a position.

“Sen. Obama does not have a point of view on this issue,” Kennard said. “So he is not burdened by history. When called upon, I am sure he will evaluate all the facts and data and make a decision…”

When he was FCC chairman from 1997 to 2001, Kennard said he personally studied the issue and came away an opponent of a la carte.

“I have a very strong view on a la carte,” Kennard said. “I took a hard look at it when I was chairman of the FCC ... I concluded it did not make sense.”

Almost as much as Martin, McCain has pressured cable operators to provide consumers with more a la carte options.

Powell insisted that McCain has never supported imposing a la carte by legislation.

“He has expressed support for the concept if it lowered prices and it provides a choice,” Powell said. “But he himself understands the limitation of government attempting to determine the business model of cable companies by regulatory fiat.”

In 2006, McCain failed to pass in the Senate Commerce Committee an amendment that would have removed some local cable franchising requirements on providers that offered a menu of channels on an a la carte basis.

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