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AOL-Time Warner out of FCC spotlight, for now

The FCC launches an inquiry into whether it should impose open access requirements on cable operators but warns it should not be tied to any decision about the AOL-Time Warner merger.

The Federal Communications Commission today launched an inquiry into whether it should impose open access requirements on cable operators but warned that this inquiry should not be tied to any decision about the America Online-Time Warner merger.

The inquiry was postponed two weeks ago when Commissioner Gloria Tristani objected, saying an inquiry was premature when the open access issue remained unresolved in the FCC's review of the AOL-Time Warner merger. But today all five commissioners voted in favor of the inquiry.

Tristani issued a statement today saying she supported the inquiry but added "I strongly caution" anyone who believes the inquiry means the commission somehow will be unable or unwilling to impose open access unilaterally on Time Warner as part of its merger approval. Still, an FCC official involved in the merger review said, "You should not be tying AOL-Time Warner to this notice of inquiry."

Internet service providers (ISPs) have been pressing for open access to cable networks for two years, fearing that cable operators will prevent them from entering the high-speed Internet market. A subscriber to high-speed Internet service through a cable company has to choose the ISP affiliated with that cable provider or pay extra if they want a different ISP.

Most major cable companies have committed to allowing multiple ISPs on their systems, but local cable providers have not. Several U.S. communities have tried and failed to impose open access on local cable providers. As a result, three separate court decisions have come down on the issue, with the only common position being that the issue is best decided by federal regulators.

One agency official said the commission could follow the inquiry either with a formal process to draft new rules, or could simply clarify existing rules to explain to the courts what the government's position is on open access.

The commission will invite comment on ways to promote high-speed, or broadband, services, how to create a uniform regulatory framework for all broadband providers, and whether a formal ruling is needed.

"I have strongly advocated a policy of regulatory restraint" for cable Internet services, FCC Chairman William Kennard said in a statement. But he added that "it is unclear, however, whether a marketplace solution will develop absent some form of intervention."

A high-ranking FCC official said the inquiry was on a "fairly aggressive timetable," with all comments to be filed within 75 days. Still, another official acknowledged that the earliest any action might come as a result of the inquiry would be next year. That's of interest because the new administration, be it George W. Bush or Al Gore, likely will want its own people at the commission.

The debate continues
Some cable operators "do not plan to offer any choice for years," OpenNet co-director Rich Bond said after the initial vote was postponed. "And many other cable operators refuse to support open access at all." He called for "prompt and effective FCC action" beyond a mere inquiry.

But despite predictions that broadband growth would put a number of so-called mom-and-pop dial-up ISPs out of business, IBM's Michael Nelson says the number of U.S. ISPs actually has ballooned in the last two years to more than 7,700 and continues to grow.

"The broadband market will be as wide open as dial-up" as a result of increasing bandwidth and content, said Nelson, director of Internet technology and strategy and the head of Big Blue's Next-Generation Internet initiative. He said the growth of ISPs without open access regulation shows that "the private sector is working."

RealNetworks chairman Rob Glaser is similarly bullish on the broadband, or high-speed, market. He told a conference in Los Angeles yesterday that broadband "will get big over the next couple of years, just as narrowband got big in the 1990s."