MCI WorldCom, America Online, and other Internet companies again urged federal authorities to bar cable operators from striking exclusive deals on new high-speed services, said participants in closed-door talks on Monday.
ISPs want to be sure that consumers will enjoy the same open access to their services via cable that they now have over phone lines. Otherwise, consumers will be bowing to cable operators by paying twice.
See also: Kennard Takes Up AOL’s Cause
Federal Communications Commission staff heard detailed pitches from the Internet companies along with responses from cable operators, who oppose any new regulations.
The meeting was to continue on Tuesday as part of an “informal, educational” session on the convergence of the cable and Internet industries, attendees said.
The FCC has twice turned aside Internet companies’ pleas regarding cable Internet services, but AT&T’s planned acquisition of MediaOne Group — the long-distance giant’s second major cable purchase — has renewed the interest of regulators and lawmakers in Congress as well.
Under current law and FCC rules, phone companies offering high- or low-speed Internet access must offer customers a choice of Internet service providers. But the same rules do not apply to cable operators.
AT&T, for example, requires customers of high-speed cable Internet access to purchase the services of AtHome, a cable-owned provider controlled by AT&T, for a single price. Cable Internet customers may use AOL or other ISPs, but must still pay for AtHome.
Internet companies argue that by effectively forcing customers to pay twice to reach them, the cable companies are stifling competition and could potentially exercise undue control over Internet content.
MCI WorldCom chief policy counsel Jonathan Sallet said that the FCC ought to make open access to cable Internet service a prerequisite to approving AT&T’s merger with MediaOne.
“We believe open access to the nation’s cable systems will guarantee that consumers can use the Internet any way they choose,” Sallet said.
Cable companies say that the FCC has no authority to interfere, and that the exclusive deals are needed to pay for the expensive upgrades necessary to allow Internet service to be offered over cable wires.
AT&T spokesman Jim McGann said that MCI and others “happen to be wrong.” According to McGann, AT&T was acquiring cable companies primarily to compete in the local telephone market against the regional Bell companies.
On the open-access issue, McGann said, “The FCC has looked at it. They said they will monitor it and that’s the appropriate role for the government at this point.”
Last week, FCC Chairman William Kennard asserted that his agency had the authority to require cable operators to change their practices. However, Kennard said that he had not heard a good suggestion for how open-access rules could be crafted without creating excessive regulation.
In addition to MCI, AT&T, and AOL, other companies expected to speak at the two-day meeting included Cox Communications, Bell Atlantic, and the Commercial Internet Exchange.
FCC officials attending included top staff from the agency’s cable and common carrier bureaus. They had little comment on the Monday meetings, but said that a statement might be issued on Tuesday.
Copyright© 1999 Reuters Limited.
