High-speed Internet access offered by television cable networks has created a parity problem for Internet service providers and the U.S. Congress should take steps to regulate it using a "light touch," America Online Chairman Steve Case yesterday said before a U.S. Senate committee.
While Case said he opposed a broad, complex regulatory structure for the Internet, Congress should address issues raised by convergences, including the cable industry's practice of offering broadband Internet access exclusively through their own content service.
The issue is how to preserve competition that exists in today's narrowband world as the industry moves to broadband, according to Case.
"I don't think imposing common carrier-like regulation on top of cable is the right way to go. We don't think that's necessary or appropriate," Case said before the Senate Committee on Commerce, Science and Transportation. "We do believe that having some simple, non-discriminatory approach is the better strategy."
Thanks to Congress, U.S. consumers are guaranteed nondiscriminatory access to different channels; that kind of light touch at the infrastructure level is the right approach, he said.
Case made the comments at a hearing called by Senator John McCain, a Republican from Arizona and chairman of the committee, whose goal was to explore ways of increasing broadband Internet access. Cable modem service, McCain noted, is bundled with the cable companies' own Internet portal service so that access to other Internet service providers is more limited and more expensive.
McCain also asked Case and the other four panelists what rules they would change and how their changes would benefit consumers.
Charles Brewer, chairman of MindSpring Enterprises, a competitor to AOL, said what's needed is a signal from Congress to Federal Communications Commission that it should enforce rules already on the books.
"I don't know that legislation is required," Brewer said. "I think existing legislation is not being applied as it should. Perhaps the faster, easier path is a signal-a command if that's possible-from the committee to make the cable companies obey the law."
Whether the FCC actually has the authority to open the cable industry's broadband business isn't clear, Case said.
Brewer also said MindSpring's experience in dealing with the cable companies has been discouraging. Of at least 20 cable companies that MindSpring has contacted, only one was open to negotiating a business deal with the ISP. The others haven't so much as replied to MindSpring's inquiries, Brewer said.
"There is a strong mindset in the (cable) industry of running a closed, proprietary system," Brewer said. Opening its networks "just does not come naturally," he said.
The only cable company representative on the panel, James O. Robbins, president and chief operating officer of Cox Communications, painted a different picture as he warned emphatically against any regulation.
"Call it whatever you want, light touch, whatever, it is regulation and it will scare capital away and mess up a natural marketplace," said Robbins, whose Atlanta-based cable operator estimates that of the approximate 30 million online customers in the U.S. today, 500,000 to 600,000 access the Internet over a cable ISP.
Robbins said it bothered him that some people think, "...some sort of light tampering would be okay. That would be truly catastrophic to the industry," he said. "It's a very young, very evolving, very dynamic world we are talking about here. Government regulation will impede its progress, not help."
Cox Communications would be willing to negotiate a deal to provide another ISP's content over its network, Robbins added.
In response to McCain's question, the other two witnesses, Solomon Trujillo, president and CEO of U S West, and William L. Schrader, chairman and CEO of PSINet, said they opposed additional regulation. Trujillo advocated total deregulation of all data telecommunication arguing that there are no incentives under current law to broadly deploy broadband services.
"There is a need for legislation that would simply deregulate the data world," Trujillo said. Current regulations prohibit some companies from moving data across the entire extent of their networks, and therefore they have no incentive to invest in improving their data transmission capabilities.
At the conclusion of the hearing several senators said the discussion was enlightening, adding that the issues brought before them clearly demanded some form of resolution, but there is no legislation currently on the table that approaches this issue.
"We aren't tripping over ourselves to come up with regulations," said Senator Ron Wyden, a Democrat from Oregon. "But we do have to come up with a policy that gives all of you and others to be stakeholders in broadband."
