Kerry Consultant Slams Cable, Telcos


Washington -- A campaign consultant to Democratic presidential candidate John Kerry took a few swipes at the cable industry in remarks Monday on the need for government intervention to guarantee affordable high-speed Internet access to all Americans.

Charles Ferguson -- whose new book, The Broadband Problem, is about to be published -- complained that cable companies use market power to fight new entrants and protect video-programming revenue by capping data-transmission speeds.

"The last thing that the cable industry wants is 50-megabit-per-second Internet service to every home in the United States, which would mean that there would be actually no point whatsoever to subscribing to cable television because you could get superior video quality over the Web," Ferguson said in a speech at the New America Foundation here.

Ferguson -- whom an aide described as a Kerry campaign consultant -- made statements that did not seem to track with Kerry's record of supporting incentives over regulation.

For example, Ferguson said the United States lags behind South Korea and several other industrial nations in broadband penetration because cable and phone companies lack sufficient competition. Both industries, he added, should face more aggressive oversight from the Department of Justice.

"One could make a reasonable case that there is an argument to be made that the cable industry could benefit from a little antitrust attention, too," Ferguson said.

Ferguson is a nonresident fellow at the Brookings Institution (which is publishing the book) and a business consultant. He is founder of Vermeer Technologies, which developed a program for making Web pages called “FrontPage.”

In his address, Ferguson called for policies that would force open broadband networks and for authorizations allowing federal and local governments to finance and operate competing data networks.

"Those two things would really have a major effect," he said, claiming that the cable-telco broadband duopoly was shaving 1 percentage point from gross domestic product.

Looking overseas, he pointed to China's flourishing broadband market.

"I think China is a pretty good foreign model not everybody in the United States is acquainted with," he said. "I think it is notable that there is this supposedly rather backward country that already has more [digital subscriber lines] than we do."