August 18, 2003 2:46 PM PDT

FCC chief dubious about new cable rules

ASPEN, Colo.--The nation's top telecommunications regulator expressed skepticism Monday about a proposal to impose rules aimed at keeping cable companies from favoring some Internet sites over others.

Michael Powell, chairman of the Federal Communications Commission, told attendees at an annual conference organized by the Progress and Freedom Foundation that he sees no need to act on a request for controversial new rules aimed at establishing "Net neutrality." The request, which Amazon.com, Microsoft, eBay and Yahoo submitted in November, is pending before the agency.

"We talk about it," Powell said. "I don't know yet that I see anything that says we need a rulemaking on it."

Powell warned that action by the FCC could interfere with legitimate future business models that broadband providers might devise.

"The problem is: We don't know yet what the whole suite of services is that consumers will value and pay for," Powell said. "We don't know what business model is going to finally identify that sweet spot."

A loose coalition that also includes Apple Computer has been trying to pressure the FCC to impose additional regulations on the cable industry, warning that cable operators might try to interpose themselves as gatekeepers between customers and Internet content. In response, the National Cable and Telecommunications Association sent a letter to the FCC in February that said "cable operators have no intention of blocking access to content" and that no government regulations are necessary to guarantee this.

Powell's comments to the three-day technology policy summit appear to be his most detailed yet on the topic, although FCC Media Bureau Chief Ken Ferree expressed similar views in June.

Ferree said there are "powerful market incentives already for broadband providers to make their systems consumer-friendly--that is, to ensure that their networks largely are open--without the heavy hand of the government mandating it."

Powell also warned the audience of about 250 business executives and lobbyists, who paid up to $1,900 each to attend the event, that a new regulatory push was under way in Washington, D.C., that could harm the technology and telecommunications industries.

"I see a rise again of a regulatory ethos," Powell said, warning that if that happens, "this country will find itself falling behind."

In response to a question about his possible departure due to growing criticism from Democrats in Congress, Powell said: "I'm going to stick around for a while. Absolutely."

 

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