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FCC Opens Interactive-TV Inquiry

The Federal Communications Commission launched a notice of inquiry
Thursday -- not a rulemaking -- on whether cable operators will be able to use
their networks to discriminate against competing providers of interactive

The cable industry opposed a plan for the FCC to launch a rulemaking,
claiming that the interactive-TV market was too new to justify any government

The FCC is seeking comments on whether cable operators have the incentive to
discriminate and, if so, whether the agency should impose nondiscrimination
rules to protect competitors that do not own cable facilities.

In a statement, FCC chairman William Kennard said he feared that cable would
have the power to launch interactive-TV services and to protect those services
by discriminating against competitors.

'Although ITV services are in the early stages of development, the [FCC]
would do well to get ahead of the curve,' Kennard said one day before he leaves

Republican commissioner Harold Furchtgott-Roth voted against the inquiry,
saying he doubted that the FCC had legal authority to regulate cable interactive
TV and he feared that the agency's proposal would 'raise the specter of
government regulation' of a market still in gestation.

'Cable interactive services, like all new innovative technologies, should be
allowed to mature free from unnecessary government involvement,' Furchtgott-Roth
said in a statement.

Democratic FCC member Gloria Tristani said she supported
a rulemaking, claiming that the commission 'must move promptly to ascertain the
public interest in nascent industries to ensure that appropriate measures are
timely vetted and resolved.'

'We're pleased that the commission has decided to conduct a
fact-finding inquiry, rather than a rulemaking, which presumes a regulatory
outcome,' National Cable Television Association president and CEO Robert Sachs
said in a prepared statement. 'But asking dozens of hypothetical questions about
regulating a business that has yet to take form still puts the cart before the
horse in regulatory terms.  Interactive TV is just starting to develop, and
it is likely to evolve in different ways.  There is no evidence to suggest
that government regulation is called for here.'