Access Attention Urged

Television Digest with Consumer Electronics, Dec 20, 1999

FCC Chmn. Kennard said cable shouldn't underestimate potential of high-speed Internet access to capture attention and anger of consumers, despite belief by some that dispute is over or that cable has won. Urging industry to listen to arguments of local franchising authorities favoring open access, Kennard told Western Cable Show in L.A. Dec. 16 that not doing so would give credence to argument that "you are stonewalling" and thereby creating "an environment for another Boston Tea Party."

Kennard said access has fundamental components of open protocol, open boundaries, open pricing. Open protocol should be arrived at through open and transparent process and open boundaries entail interconnectivity, he said. Pricing should be determined in competitive market rather than unilaterally by any rate-setter, and industry has to make tough decisions there, he said.

Reiterating Commission's belief that it's better to put faith in market on open access issue, Kennard said case hasn't been made that there's market failure. He said govt. should stay out, since access involves deployment of new technology. Most important thing for govt. to do is create regulatory environment for ubiquitous deployment of broadband technology, Kennard said, and "if we can do that and give customers multiple broadband choices," issue of open access will be "completely irrelevant."

Meanwhile, Eugene Sullivan, comr., Mass. Dept. of Telecom & Energy, said govt. can't regulate cable open access because it won't be able to keep pace with changing industry. There's much evidence broadband deployment on cable is working right and FCC is right in declining to intervene, he said. DSL has followed cable broadband geographically, and cable has helped lower its prices, Sullivan said. He said state intervention could mean "nightmarish scenario" not only of cities and counties coming up with their own rules and regulations, but also of "states setting up roadblocks."

Despite digital must-carry, Internet via leased access and other pending matters at FCC Cable Bureau, Satellite Home Viewer Improvement Act (SHVIA, new acronym) just signed into law "has priority over everything," Deputy Bureau Chief Bill Johnson said at show: "There are congressional deadlines everywhere."

Cable Bureau Chief Deborah Lathen said she hopes to have DTV must-carry report to 8th floor by year-end. She and Tom Power, Chmn. Kennard's senior legal adviser, both predicted decision no later than end of next month on ISP Internet Ventures' petition to use leased access to provide one-way Internet service with telco return.

Johnson said first SHVIA deadline is creation of enforcement process, followed by retransmission consent process, due 3 months after bill's signing. As result, he said rulemaking could come out as soon as this week (Dec. 20-24). Bureau also has to deal with existing satellite rules on syndicated nonduplication and exclusivity and blackouts that have developed over last 20 years in series of Cable Bureau decisions. Eventually, he said, Bureau will develop DBS must-carry rules, which will include report to Congress on possible changes in Grade B contour definition. FCC Plans & Policy Chief Robert Pepper said SHVIA and DTV must-carry have "important link" in that extent to which SHVIA "creates increased competition and creates a differentiated component in the market... it will lead to more aggressive dealmaking on retransmission consent" between cable and DTV stations, decreasing need for must-carry.

Lathen said "the AT&T-MediaOne merger is the big item we're working on [though] digital must-carry is still on top of our agenda." Johnson said Bureau still is wrestling with how to handle digital must-carry during transition, when cable systems would have to carry 2 channels per TV station. Still, he said, "the agency has quite a lot invested in the transition to digital television, and we're not happy to just let it languish."

There was disagreement among FCC staffers, cable attorneys and U.S. Copyright Office senior attorney Bill Roberts on likelihood of eventual compulsory license for Internet, issue that arose at last min. in debate on SHVIA in Congress. Roberts said "it's logical [for Internet] to have a similar regulatory scheme" to cable in retransmission, but "the Internet is not like cable or satellite in that it holds no boundaries." As result, lawmakers will have to iron out issues of compensation, video integrity and extent to which copyright holder wants distribution geographically, he said. While his political superiors oppose compulsory licenses in general, "we keep adding more," he said, and when SHVIA comes up for renewal in 2004 "if they [Internet] don't have one, they're most likely to get one then." He said he had to resist last-min. pressure from members of Congress in SHVIA negotiations to draft compulsory license language "in an afternoon."