FCC Launches Inquiry on ITV

DAVID CONNELL

Interactive television services will go under the Federal Communications Commission's microscope, and the cable industry's not happy about it.

The move, promised when the commission approved AOL's merger with Time Warner and formally put into a Notice of Inquiry last week, faced opposition from some of the regulators.

FCC Commissioner, and top candidate for the chairmanship, Michael Powell said he only "reluctantly" approved of an ITV proceeding.

To the National Cable Television Association, an inquiry is more palatable than a Notice of Proposed Rulemaking on the subject would have been.

"We're pleased the Commission has decided to conduct a fact-finding inquiry rather than a rulemaking, which presumes a regulatory outcome," said a statement from the NCTA. "But asking dozens of hypothetical questions about regulating a business which has yet to take form still puts the cart before the horse, in regulatory terms."

Interactive TV is just starting to develop and is likely to evolve in different ways, the NCTA said, adding there is no evidence to suggest government regulation is called for.

In the Notice of Inquiry the FCC said comments filed during the AOL Time Warner merger raised the possibility a "vertically integrated cable operator/interactive television service provider could discriminate in favor of affiliated interactive services."

The notice asks if these vertically integrated companies would have the ability and incentive to discriminate against other programmers. The commission also asks if it would be in the public interest to impose a nondiscrimination requirement on a multichannel video provider "with a substantial advantage in delivering ITV services."

The FCC wants comments that provide a suitable definition for ITV services.

However, the NOI identifies three technical "building blocks" needed to provide an ITV service, including a video pipeline, a high-speed Internet connection and specialized customer equipment, such as an ITV set-top box.

Outgoing FCC Chairman William Kennard addressed the controversy behind the notice saying that "although ITV services are in the early stages of development, the commission would do well to get ahead of the curve."

"It seems clear to me that cable television will be an important platform for the delivery of ITV services, at least in the near term," he added, "I am concerned that a vertically integrated ITV service provider might have the incentive and ability to discriminate against unaffiliated ITV service providers."

Predictably, Commissioner Harold Furchtgott-Roth, who voted against the NOI, said it was too soon for the commission to be acting on the issue, adding the FCC lacks the legal authority to address interactive services.