Aide: FCC Wants Must-Carry Settled


Newport, R.I. -- A top aide to Federal Communications
Commission chairman William Kennard said last week that the agency is urging the cable and
broadcast industries to settle digital-broadcast-signal-carriage issues between

"That would be the best way for these issues to be
resolved," said Tom Power, Kennard's senior legal adviser, during a panel
discussion at the New England Cable Television Association's convention here that
included three MSO representatives.

The FCC is considering whether to force cable operators to
carry digital-TV signals, but it is not expected to issue a ruling until the fall or early

The agency is also considering splitting the proceeding,
separating the must-carry issue from a host of other communications-policy issues.

Power indicated that the FCC was pleased that CBS reached a
digital-carriage deal with Time Warner Cable and that NBC worked one out earlier with
AT&T Broadband & Internet Services.

"Obviously, if that process is a workable solution,
that's fine," he said.

Power added that the commission has been reluctant to issue
carriage rules because it wants to see whether the market will resolve the issue.

He suggested that it would be difficult to craft specific
carriage rules at a time when broadcasters' digital business plans were unclear -- an
apparent reference to industry debates over beaming multiple digital-programming services
or a single high-definition feed.

"We're really kind of waiting for the
broadcasters to coalesce around more of a business plan as to how they see the use of
digital," Power said. "While they are sort of formulating those plans -- while
these deals are being cut -- we don't want to put our thumb on the scale one way or
the other."

Helgi Walker, a legal adviser to FCC commissioner Harold
Furchtgott-Roth, said the law required the commission to impose digital must-carry rules
only if "necessary." The debate, she added, should focus on whether such a
mandate is necessary.

"If we survey the market, the comments and so forth,
and it turns out that regulation is not in fact needed, then I don't think there need
to be, as a simply statutory matter, any rules in this area at all."

MediaOne Group Inc. vice president of federal relations
Susan Eid said her company reached digital-carriage deals with broadcasters even before
the FCC launched its rulemaking a year ago.

Eid added that some agreements call for immediate carriage
once TV stations begin beaming digital feeds, while others would postpone carriage until
about 5 percent of the households in a market had obtained the necessary equipment to
receive digital-TV signals.

"I don't see the need for regulation in this area
at all," she said.

On the issue of open access to cable-modem platforms, Power
said Kennard agreed with officials in Portland, Ore., and Broward County, Fla., that
preservation of consumer choice in the selection of an Internet-service provider was
vital, but he disagreed about how to achieve that result.

"There is no debate about the end game: It's how
do you get there?" Power said.

Power suggested that FCC intervention could stifle
investment in broadband facilities at a time when it appears that telephone-company
digital-subscriber-line services and cable high-speed-modem services are locked in a
competitive battle to capture the high-speed Internet-access market.

"The last thing we want to do is anything to dampen
the drive toward two or more pipes to the home," Power said, adding that companies
should not expect regulatory favors from the FCC.

Power's comments tracked with Kennard's National
Show speech in Chicago last month, during which he declared support for national rules
governing unaffiliated ISP access to cable-data facilities. For now, Kennard said, the FCC
should allow cable operators to craft their Internet strategies unfettered by national and
local regulation.

Comcast Corp. vice president of external affairs Joe Waz
said he was pleased that the FCC has exercised "forbearance" up to this point.
Before the panel, Waz said he doubted that the commission would respond to Portland and
Broward unless many more cities decided to pass open-cable-access laws.

"I think you still have to take it one step at
time," he added.

Walker said she felt that people have overreacted to the
Portland case, in which U.S. District Court Judge Owen Panner held that Portland had the
authority to deny a cable-franchise transfer if the operator would not provide access to
competing ISPs.

Walker said the judge -- importantly -- did not find
whether open access is good policy or even constitutional.

"I think there has been some hysteria over the
district court judge's position," she added. "I don't think it's
good for the cable industry -- don't get me wrong. But it's not as bad as the
initial report made it out to be."

Frank Lloyd, a Washington, D.C.-based cable attorney who
represents the NECTA, said he was troubled because Panner decided to rely on a little-used
section of federal law to grant sweeping power to cities over cable operators.

"The judge said municipalities have extremely broad
powers to impose public-interest obligations at transfer time," Lloyd added.