rh@well (02/04/89)
FCC Commissioner Patricia Diaz-Dennis charmed about 100 Washington lawyers, reporters, trade association representatives and consumer activists at a "brown bag lunch" Thursday (2 Feb) as she argued that the American public would benefit from competition between cable-TV and telephone companies in the development of broadband services. She may not have changed many minds, though, because fundamental questions about how such competition would be structured were left unanswered. At least initially, "video services are the most promising area of competition" between cable and telcos, the Commissioner asserted. "For consumers, the promised land would be video on demand" - no need to rent tapes or wait for the network to schedule a particular program. One-way broadband delivery coupled with 2-way narrowband signalling thus might be the way such systems would start off. But Ms. Diaz-Dennis wouldn't predict the kinds of services that might prove popular later on. The FCC should encourage cable systems to experiment with optical fiber, she said, to start validating the predictions made by the industry in numerous filings at the Commission. On the other hand, telcos shouldn't be allowed to enter the broadband service field simply by buying existing cable systems, she cautioned. She favors requiring telcos to build new systems from scratch. She also felt that telcos entering the broadband field should be required to operate as common carriers, and to the extent that broadband services are unregulated, the system costs should not be added to the phone system rate-base. During the question period following her presentation, Gene Kimmelman, head of the Consumer Federation of America, asked if cable TV companies offering competing broadband services would likewise have to act as common carriers. Ms. Diaz-Dennis said she'd reached no conclusion on that yet, but recognized it would be a big change in the way cable systems operate. Would prices for broadband services be regulated or set by competition? Would they be allowed to subsidize - or be subsidized by - other communications services? Would channels have to be set aside for community organizations and free public access, as most cable franchises now require? What about the impact on over-the-air broadcasting and FCC spectrum allocation decisions generally? These questions were addressed - inconclusively. They are, of course, difficult ones, with no clear consensus yet on the proper answers. We'll just have to wait for the results of the Commission's current inquiry on telco entry into the field of cable. In other FCC news, NYNEX has petitioned for a ruling on whether the company's proposed gateway, "INFO-LOOK," can be considered as a "basic service." NYNEX had listed it as such in its Open Network Architecture plan last winter, and recently tested it successfully in Vermont. The NYNEX petition, filed on 17 January 1989, argues that INFO-LOOK is different from other proposed gateways, (which are generally considered "enhanced" rather than "basic" services), and is more analogous to existing "basic" network services such as directory assistance. Should the Commission not rule on this issue, NYNEX asks permission to conduct a 3-year trial of its "basic gateway" anyway. Finally, the Commission approved a waiver request by Southwestern Bell, to allow market trials of enhanced voice and data gateway services in Houston, Texas for approximately one year starting 1 March 89. The Commission added that other Bell regionals can conduct similar trials in their service areas if they meet these conditions: the trial lasts less than 8 months; costs are allocated according to the approved Cost Allocation Manuals; end users must be informed that prices and services available during the trial may not be available later on; competing enhanced service providers (ESPs) must receive equal access at equivalent prices for all basic services used in the trial; ESPs are informed of the trial's start at least 90 days in advance; and CPNI and network disclosure rules must be observed. The Bell companies must also notify the Commission 90 days before commencing a trial, describing the service and how the above conditions will be met. For more information, see "Memorandum Opinion and Order," CC Docket No. 88-616, released 30 January 1989.