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To: margin_man who wrote (26055)	9/9/1998 11:58:00 PM
From: Rainmaker	Read Replies (1) \| Respond to of 36349

FCC takes a closer look at Internet access via cable By John Simons THE WALL STREET JOURNAL WASHINGTON -Faced with the convergence of telephone, cable and Internet services, the Federal Communication Commission is taking a harder look at whether to regulate Internet services that are delivered over cable-television wires. The agency's internal hand-wringing comes on the heels of a proposed merger between long-distance telephone carrier AT&T Corp. and cable-TV giant Tele-Communications Inc. The combined company plans to offer high-speed Internet access via cable wiring. IN A "WORKING PAPER" released last week, Barbara Esbin, associate chief of the FCC's cable services bureau, said the FCC faces a quandary. As the Internet, cable and telephone services begin to merge into a single medium, the FCC has had difficulty fitting them into its decades-old, narrow regulatory slots. Last April, for instance, it delayed a decision that would have classified companies that offer Internet phone calls as telecommunications services. And last month, it began to grapple with questions about the regulatory status of Internet delivered over cable systems. The FCC is now seeking industry and consumer comment to help it answer the central question: Is Internet over cable a "cable service," a "telecommunications service" or an "information service"? Each is subject to varying degrees of FCC regulation. Regulators and industry leaders see cable as a way to quickly bring high-speed Internet to millions of American homes, since cable wiring can carry data to personal computers 100 times faster than copper phone wires. Several companies already use cable as an Internet conduit. Indeed, TCI has a 38% interest in AtHome Corp., which offers the service to about 150,000 subscribers; Road Runner Group, a subsidiary of Time Warner Inc., offers it in some 29 cities. Any cable/data regulation would spark opposition from many quarters, Congress and the White House among them. And FCC officials are divided as well over creating another set of regulatory guidelines. But they note that Ms. Esbin's paper is aimed at sparking discussion within the agency, and between government and industry. It could also help Congress frame the issue, since any expansion in the FCC's regulatory powers would need congressional approval. "The whole point," said Ms. Esbin, "is to say, hey, we've got this problem, and it's a big problem. When you have the capability that the Internet provides - now you can do almost anything over one medium - you have to start thinking which rules are applicable, or whether any of our rules are applicable at all." The paper suggests that Internet access provided over a cable network could be defined as a "cable service," which is subject to regulation. But Ms. Esbin points out that cable services are forced to pay franchise fees to local governments, which would raise consumer prices for cable/Internet services. And because the FCC forces telecommunications carriers to share their networks with competitors, cable companies don't want to be defined as such. Companies that offer data via cable would prefer their services be labeled as "information," which would exempt them from regulation, or as cable. The cable definition is closer to how the industry views itself, said David Pine, vice president and general counsel for AtHome. Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved.