Cable Firms Urged to Share Lines With Net Providers

The cable industry must move voluntarily toward sharing its high-speed transmission lines with competing Internet access providers or risk a political backlash and government action, Federal Communications Commission Chairman William E. Kennard warned a gathering of cable executives on Thursday.

But he said the FCC remains reluctant to force the issue by regulation.

“Don’t underestimate the power of this issue to capture the attention, and the ire, of American consumers,” Kennard told a breakfast gathering at the annual Western Show of the California Cable Television Assn. The three-day show, held this year at the Los Angeles Convention Center, brings together thousands of representatives of cable companies, television programmers and hardware and software purveyors.

Among the burning issues of this year’s show is so-called open-access, which pits cable companies providing high-speed Internet service against America Online and other Internet service providers who want access to the cable lines.

The cable operators typically offer high-speed, or broadband Internet service to their customers via two cable-owned companies, @Home and Road Runner. They argue that they must have the exclusive opportunity to exploit the market for Internet access over their networks to justify the billions of dollars they have spent upgrading their lines to carry two-way data transmissions. AOL and its peers argue that this exclusivity will threaten to give the cable companies a lasting monopoly in the emerging new market.

Intense lobbying by AOL has already borne fruit: Several municipalities have tried to force cable operators to open their networks to Internet providers. And a federal judge in Portland, Ore., ruled earlier this year that the city had the right to impose such a rule on AT&T;, the second-largest cable operator in the country. That case is considered likely to reach the U.S. Supreme Court.

Kennard said that he and his fellow FCC commissioners have sympathy for the cable industry position and are loath to force them to open their networks to competitors.

In his speech and at a later meeting with reporters and editors at The Times, he said he believed that the cable industry would continue to upgrade its networks for broadband transmission even if it were forced to open them to rivals, but that the rate of rebuilding would slow.

“The dark cloud of regulation will slow the deployment of the broadband pipe,” he said at The Times. That, in turn, will slow the deployment of broadband technology by telephone companies, which are determined to keep pace with the cable industry.

Nevertheless, he said, the cable operators must take concrete steps to accommodate competing Internet providers to appease public opinion.

He endorsed as a “positive first step” an agreement in principle between AT&T; and MindSpring, one of the largest nationwide Internet providers, that will give MindSpring customers access to AT&T;’s high-speed lines after 2002.