Barnyard Socioeconomics of Cable Access

One outspoken Federal Communications Commissioner favors a free range policy for this cash cow

by Patricia Fusco ISP-Planet Managing Editor [June 28, 1999]

If Federal Communications Commissioner Michael K. Powell's comments are taken as official FCC policy in regards to mandatory access of cable networks, Internet Services Providers aspirations to provide cable access may have bought the farm.

In a recent speech made before the Federal Communications Bar Association in Chicago, Powell declared mandatory cable network access tantamount to violating the Tenth Commandment—in barnyard socioeconomic terms.

After reviewing the biblical verse—'Thou shalt not covet thy neighbor's house, or wife, or donkey, or cow'—Powell said, "the moral of the story is that you are supposed to get your own cow. This dynamic of individualism and pursuit of self-interest is what drives a market. We should not take the cow from its owner, chop it up into steaks and distribute them to his neighbors without a compelling case for doing so."

The openNet Coalition and Internet Ventures, Inc. have increased their public outcry demanding that they get their fair share of cable access, now. As far as Commissioner Powell is concerned, they can complain about the lack of access to cable plants all they want because the FCC is in the business of protecting consumers, not competitors.

Day and night
Powell believes there are vast technological differences between dial-up access and cable modem services. The Commissioner fears that if the FCC isn't careful, it could clumsily apply telecommunication regulations based on technological phone service assumptions, to cable services.

He said, "there are clear and potentially very important differences between telephone dial up and cable modem Internet access services. For example, dial up connections offer a dedicated circuit for reaching the Internet. The cable configuration requires clusters of consumers to share access, much like a local area network. Consequently, the issues associated with shared access among competitors might be much more complicated. Rather than handing over a loop to a competing service, cable interconnection would require unprecedented joint/multi-provider coordination and cooperation that may prove too daunting."

Technological differences aside, GTE recently demonstrated how easily open access to cable networks can be provided in their Clearwater Fla., tests. However, cable access companies quickly labeled the test results as comparable to ox dung, and just as degrading to cable network services.

Powell said, "in the case of free markets versus government intervention, history has rendered a verdict, and that verdict is decidedly in favor of markets and against intervention … Markets unquestionably deploy resources better and more consistently than does the state."

Localized rumblings
Regardless of historic vindication, the Commissioner's quest for a judicious cable access policy is being undermined by current events in Los Angeles, San Francisco, Spokane and Portland. Powell said he feared that different state and local authorities throughout the country could impede the development of broadband deployment.

Powell said "if, in the wake of the recent decision in Portland, we see a contagion of different approaches proliferate throughout the country we will end up with an incoherent, disjointed policy melange that seems sure to impede the development of advance services, in any form, for our citizens."

The Commissioner insisted that the FCC is open-minded about policy concerning mandatory cable access. However, the federal agency has determined that last-mile delivery issues, public domain concerns, and consumer choice are not proof of a cable access monopoly at this time.

To summarize current FCC mandatory access policy:

• The FCC doesn't want to treat mandatory cable access like a raging bull by putting a regulatory ring through its nose for fear they might really step in it.
• At the FCC the differences between telecommunication and cable Internet technologies are as distinct as the differences between a virile Brahma bull and a docile newborn calf.
• Proponents of milking cable facilities can complain about AT&T/TCI monopolies until the cows come home. The FCC believes that history finds in favor of free market forces when in comes to inspiring innovation, maximizing public welfare, and creating competition within the herd.

 —End

Click here to read Mr. Powell's speech unedited.