FCC Chief to LFAs: Dont Overregulate

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Atlanta -- Local cable franchisers must "resist the
urge to regulate," or risk slowing the deployment of broadband technology, Federal
Communications Commission chairman William Kennard warned.

Speaking at the National Association of Telecommunications
Officers and Advisors conference Sept. 18, Kennard said open access to cable's high-speed
networks will mean fewer broadband pipes to compete against cable and the regional Bell
operating companies.

"The wireless industry is showing up at the broadband
party," he said. "And broadcasters were given a gift by Congress of 6 megahertz
of spectrum that can be used to deliver digital programming, but which can also be used to
offer broadband services."

The challenge, he added, is to "create a regulatory
environment that is technologically neutral, so we get as many players on the field as
possible."

Presumably, the competitive effects of cable-modem service
are already showing up.

Between March and June, the number of asymmetrical digital
subscriber lines deployed by the RBOCs doubled to 200,000, with that figure expected to
double again by the end of 1999. At the same time, the price of ADSL service has begun to
drop, Kennard said.

"The regional Bell companies know that for the first
time in the history of this country, they're facing a serious facilities-based competitor
in their backyard, and that's the cable-television industry," he said. "And it's
the prospect of that competition that going to jump-start the broadband industry."

He conceded, however, that lobbying efforts on both sides
of the open-access issue had been "abysmal."

"To go into a community and scare people about a
service they've come to rely on does a disservice to our communities," he added.

Kennard made those comments in response to remarks by
Portland, Ore., franchising director David Olson, who publicly asked Kennard to stop
claiming that open access will have 30,000 local franchising authorities imposing their
own technical standards on cable operators.

"It's not fair. It's not accurate," Olson said.

While admitting to occasional "tensions" between
regulatory authorities, Kennard barely mentioned his filing with the Ninth Circuit Court
of Appeals, which will hear AT&T Corp.'s bid to overturn a lower-court decision
upholding the right of Oregon's Portland and Multnomah counties to require open access to
@Home Network.

In that filing, Kennard claimed that the FCC has sole
jurisdiction over the Internet.

Although applauded for becoming the first FCC chairman to
address NATOA, association members found nothing new in Kennard's remarks. "But the
fact that he's here and discovering that we're neither ogres nor idiots is
important," Olson said.

Nevertheless, during an earlier panel session, Olson said
that within 120 days, the Ninth Circuit will affirm an LFA's right to order open access as
a way of promoting competition.

"For better or worse, the FCC has decided not to do
anything on this issue," he told the audience. "Once your jurisdiction is
affirmed, you are the ones who are going to have to do the heavy lifting."

Newly installed National Cable Television Association
president Robert Sachs argued that it would be "premature" for LFAs to use the
access question to "head off a problem that does not yet exist in a market that has
not yet developed."

He noted that with 1 million cable-modem customers, the
industry holds just 2 percent of the Internet-access market, and it faces competition from
the telephone, electrical, wireless and satellite industries.

"There's no reason to single out cable for special
regulatory treatment," Sachs said. Moreover, the RBOCs are using the open-access
issue to try to derail the only real competitor they face in the local-exchange market, he
said, adding, "And they want you -- all of you -- to do their bidding."

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