FCC opposes local cable internet rules

XCITenews.gif CHICAGO (Reuters)- U.S. regulators are considering a range of options to minimize the effect of a court decision two weeks ago allowing local authorities to regulate cable Internet services, a top official said Tuesday.
Federal Communications Commission Chairman William Kennard warned that the cable industry's high-speed Internet offerings could be delayed or even wrecked if thousands of local governments each impose a different set of regulations.
"The information superhighway will not work if there are 30,000 different technical standards or 30,000 different regulatory structures for broadband," Kennard said in a speech to the National Cable Television Association here. "We have to have a national policy."
A federal district court in Portland two weeks ago ruled that local cable franchising authorities had jurisdiction to require AT&T Corp. to allow competing Internet service providers onto its system. AT&T is planning to appeal.
Kennard said the FCC was considering its options, but declined to be specific. Among possible actions, the agency could ask the court to temporarily set aside its ruling during an appeal, enter the case on appeal on the side of the cable industry, or even possibly use some of its own broad authority to supersede local regulations.
"We can't overreact to one federal district court decision," Kennard told reporters after his speech "We're very early on in this. There are a number of options that we can explore. At this point we need to allow the legal process to play out a little bit more."
Kennard's first approach appeared to be to try to convince local authorities not to act.
"We're going to work closely with our local franchising authorities," Kennard told reporters. "I don't want to give anybody the misimpression that we're not going to be dialoguing with them because some of them do have some serious concerns in this area."
Echoing a similar warning issued by AT&T chairman Michael Armstrong Monday, Kennard said regulation of cable Internet service by thousands of localities would create "chaos."
In his speech, Kennard repeated what he has said many times since the FCC in February refrained from regulating cable Internet services while saying it would monitor the nascent market.
"We do not have a monopoly in broadband," Kennard said. "We have a 'no-opoly' because the fact is, most Americans don't even have broadband. We have to get these pipes built."
The FCC and Congress have so far declined to regulate cable Internet services, which require that consumers accessing the Internet over cable also use a cable-owned company to get Internet services like e-mail and Web page hosting.
About 750,000 people currently use cable modems to reach the Internet at speeds 50 times or more faster than the tens of millions more who still log on over ordinary telephone modems.
Some local cable franchising authorities, heeding warnings from Internet service providers and consumer groups that exclusive Internet service deals were anti-competitive, have tried to require cable companies to allow competing providers onto their systems.
The Portland court ruling has pulled down some cable stocks, especially that of AtHome Corp., the leading cable-owned Internet service provider.
(Updated 2:35 PM ET June 15, 1999 By Aaron Pressman)