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Restraint Urged on High-Speed Regulation

Bloomberg News

U.S. regulators should maintain a hands-off approach to overseeing the high-speed Internet business to encourage the fledgling technology’s growth, a Federal Communications Commission staff report concludes. America Online Inc., the No. 1 online service provider, is leading a campaign to make cable companies such as AT&T; Corp. open their high-speed systems to unaffiliated Internet service providers. Though the FCC has opted not to impose such a requirement, several local governments have voted to require the so-called open access. The report found only about 1 million of 40 million residential Internet subscribers have high-speed hookups. The report is aimed at discouraging more local governments from taking action because the technology is still in its infancy. The FCC’s Cable Services Bureau, which wrote the report, concluded that “the mere threat of regulation could slow down this deployment” of high-speed services, Bureau Chief Deborah Lathen said. Consumer groups blasted the FCC’s report, saying that issuing a report was incompatible with the agency’s stated goal of “watchful waiting” on the issue. AOL shares fell $2.94 to close at $111.06; AT&T; fell $2.13 to close at $45.75. Both trade on the NYSE.

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