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To: t2 who wrote (32678)	10/13/1999 9:44:00 PM
From: Jim Lamb	Respond to of 41369

FCC staff wants no new regulation of cable Internet WASHINGTON, Oct 13 (Reuters) - Federal regulators monitoring high-speed Internet services on Wednesday reported that the market was continuing to develop and no new regulation was needed. A report by the staff of the Federal Communications Commission urged the agency to continue to allow the so-called broadband market to develop without regulation. The ``very preliminary' conclusions in the 60-page report echoed two decisions by the FCC earlier this year not to impose new regulations on cable companies offering high-speed Internet service over cable wires. ``Faced with no evidence of anti-competitive and monopolistic practices, the commission should continue to pursue its policy of not regulating cable Internet access,' the report concluded. The document was not a reflection of official FCC policy, but represented the recommendations of the agency's professional staff. FCC Chairman William Kennard said the report was a result of the agency's policy of closely monitoring the broadband market. ``The commission pledged...that we were going to monitor this industry and this is a step in that process,' Kennard said. ``It's going to be an ongoing process.' ``We're really going to step up the intensity of our information gathering and analysis,' he added. As of the middle of 1999, just over 1 million out of more than 30 million U.S. households that access the Internet used high-speed cable or telephone lines, the FCC noted. High-speed services are growing quickly and could have 33 million subscribers, or half of a much larger market, by 2005, the report said, citing reports by Wall Street analysts. By law, telephone companies that offer high-speed Internet access over standard phone lines cannot require a customer to use any particular Internet service provider. But cable companies offering high-speed access over cable wires are requiring their customers to purchase Internet service from a cable owned provider like ExciteAtHome Corp.(NasdaqNM:ATHM - news) or privately-held RoadRunner. Cable companies have argued that they need the exclusive deals to finance expensive upgrades to their cable networks to enable high-speed Internet offerings. Leading Internet service providers like America Online (NYSE:AOL - news), along with consumer groups and major telephone companies, have backed regulations requiring the cable companies to allow unaffiliated providers onto cable networks. Without free competition, cable companies could gain a monopoly on high-speed service and limit choice on the Internet, they said. Repeating earlier decisions, the FCC staff report said competition from other types of high-speed service, as well as pressure from consumers clamoring to access all Internet content, appeared to be enough to prevent the cable companies from misusing their broadband service. ``We believe for now that the emergence of alternative broadband providers, with their competitive service offerings, features and prices, mitigates the risk that cable will become the gatekeeper of the Internet,' the report said. Other choices include Digital Subscriber Line service from telephone companies as well as expected wireless and satellite broadband offerings. Consumer and public advocacy groups blasted Wednesday's report, which they said ignored concerns they had raised. The FCC ``should not become a partisan for one side in a debate taking place at the local and state level as well as the federal level,' five consumer and public advocacy groups said in a letter to FCC Chairman William Kennard. --------------------------------------------------------------------------------