FCC: Walking the regulatory tightrope

In a response to recent local court cases over cable open access, the FCC plans to go to court to argue that regulating high-speed Internet services is the job of the federal government--not cities and counties. In Kennard's view, local policymakers have effectively undermined the FCC's hands-off policy toward the nascent broadband market.

The move essentially supports AT&T in its fight to keep rival Internet service providers like America Online from sharing its cable network. It would be the FCC's first decisive intervention in what has quickly become one of the Internet's most contentious debates.

While AT&T and its affiliates quickly welcomed Kennard's decision, proponents of cable open access blasted the chairman's move.

"It is astonishing that the chairman would step in and attempt to influence local decisions," said John Raposa, assistant general counsel for GTE. "The hands-off approach he espouses abdicates the responsibilities of the FCC."

Kennard is used to this kind of criticism. As chairman since late 1997, he's taken a lead in establishing a federal policy toward the Internet. This issue especially has subjected him to considerable criticism from companies and from Congress.

Yet Kennard has never strayed from his beliefs. The FCC is dedicated to keeping deregulation a policy priority with regard to the Internet, and is not ready to impose any regulations on nascent broadband technologies, he said.

In a recent interview with CNET News.com, Kennard elaborated on his hands-off approach and the state of high-speed Net access.

CNET NEWS.COM: Do you think broadband is being introduced fast enough? What do you think government and the FCC can do to assist?
About 40 percent of American households today have home computers and about half of those are hooked up to the Internet. And, almost every one of those computers has more computing power than can be accommodated over narrowband pipes. So we have to have a real sense of urgency about this because if we can get broadband deployed more quickly and more ubiquitously, it's going to open up a whole new horizon for Americans.

Most Americans today are used to having pretty fast Internet access in offices. Because of some of the pro-competitive practices of the FCC, we have more competition, more data CLEC [competitive local exchange carriers] companies in the business space. But then they go home at the end of the day and boot up their home computer, and it's the World Wide Wait on the World Wide Web. So we really have to have a sense of urgency about this because the demand is there, Americans want it. I travel around the country and people complain to me all the time, "How can you speed up the Internet? It's going too slow!"

You've expressed some concern about the direction local governments are taking with regard to access to cable TV networks. What is your opinion of the way local authorities are developing their own policies for cable access?
Well, let me be clear about one thing. I think that the motives of local government officials who are doing this are very high-minded, and we share those goals. We want to do what's best for consumers, for our constituents. And certainly, I don't disagree with the ends. We want to have an open broadband platform. The question is how do we get there? Do we regulate our way there? Or do we allow the marketplace to evolve, and step in when we see tangible abuses?

I much prefer the latter course. When you look at the local jurisdiction, I think it would be chaos if we had a patchwork of different and sometimes inconsistent regulation developing at the local level. If we've learned anything about the Internet over the past five to ten years, it's that it is a national, indeed an international network, and that calls for a national broadband policy. We're engaged in a dialog with a lot of regulators at the local level, and many of them agree with this point of view.

Do you see an open market for broadband into the home as cable, DSL, and wireless become available through multiple providers, or do you see the market adopting competition between the differing technologies?
Competition between the platforms is the way to get there. If we had four or five broadband pipes into every home in America, we wouldn't be having this discussion. And that's where we need to go as a country. I fundamentally believe you're not going to regulate your way there. What you're going to do is give people the incentives to invest, so that you have multiple choices. And that's really my vision of where this marketplace should go.

What's the advantage for the average consumer in speeding up the Internet?
They will be able to participate more meaningfully with the technology. The technology is there--it's just a matter of getting it into consumer's homes. It will mean, for example, that e-commerce will be expedited in the country. And we know that e-commerce represents just a huge boon for our economy. The faster we can get this broadband technology out there, the faster people are going to be able to recognize and use e-commerce in a meaningful way.

Silicon Valley has been fairly resistant to having the government do anything that looks like regulating the Internet. What do you see as the FCC's role in helping to speed the introduction of broadband?
We [recently] released a paper called the Unregulation of the Internet. Basically we looked at the history of government policy toward the Internet over the past 30 years. And the fundamental conclusion of that paper is that, the best thing the government did with respect to the Internet is to adopt a hands-off policy. It allowed the Internet to grow in essentially an unregulated space, and that's been wonderful for consumers because it's created a really robust competitive marketplace.

And, people in government--people in jobs like myself, in Congress, and at the state and local level--we all have to have a sense of humility about this technology. It is going to grow and serve consumers best and fastest, if we realize that we don't know where it's going and the best thing for us to do is keep our hands off it. Let the entrepreneurs and the creative community and the engineers do their jobs and build this wonderful network.

Telephone and cable companies, which are both planning on offering voice, video, and data, have very different regulatory schemes. Should they be put on a level playing field as quickly as possible?
Ultimately we want to get to a level playing field. But you don't necessarily get to a level playing field by trying to impose more regulation. My vision for a broadband future is one in which we have multiple broadband pipes into the home. Not only cable and DSL, but terrestrial wireless, terrestrial broadcast, and satellite. All of these technologies have the potential to bring high-speed data into every home in America. And when we get to that point in our policy, then we don't have to worry about regulating access, because everyone will have multiple choices. But we'll only get there if we create a regulatory environment that promotes investment, and investment quickly. 

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