Kennard: Unbundling Issue Not Dead

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Washington -- In words indicating that America Online Inc.
has not completely struck out in its fight with cable, Federal Communications Commission
chairman William Kennard said last week that he has appointed two agency officials to
spearhead the commission's oversight of cable Internet-access-unbundling issues.

Kennard, speaking to an investor seminar sponsored by Legg
Mason Wood Walker's Precursor Group, said Cable Services Bureau chief Deborah Lathen
and Office of Plans and Policy chief Robert Pepper would lead the effort.

The two are charged with "setting up a series of
meetings with the stakeholders in this debate so that we can get a better handle on the
problem and monitor the marketplace," Kennard said.

While the FCC has said so far that it would not force cable
to open its high-speed facilities to AOL and other Internet-service-provider competitors,
Kennard said he had not finalized his views.

"I am not saying yes or no. We are still grappling
with the issue," he added.

A day after Kennard spoke, an AOL official told the same
gathering that cable operators were trying to block Internet competition to cable
networks. The AOL official cited a clause from an @Home Network affiliation agreement that
bans any other Internet service from providing video.

"Now tell me, Houston, don't we have a
problem?" asked George Vrandenburg, AOL's senior vice president for global and
strategic policy.

James Cicconi, AT&T Corp.'s general counsel and
top Washington lobbyist, said the video ban may have been imposed "out of an excess
of caution," adding that it was entirely plausible that cable operators and @Home did
not want bandwidth-greedy video services to slow down the whole system.

Kennard announced the Lathen-Pepper team moments after
saying twice that the FCC would never regulate the Internet while he is chairman.

National Cable Television Association president Decker
Anstrom said Kennard's remarks were consistent with previous statements that the FCC
would continue to monitor the cable-broadband-access market.

Lathen said the FCC promised in February to monitor the
broadband-Internet-access market, and the meetings were an organized way of going about
it.

"There is not a major shift in policy here,"
Lathen added.

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