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Powell: Cable Spurring Telco DSL

Facing a panel of senators, Federal Communications Commission chairman
Michael Powell said Thursday that he wants to spur cable deployment of
high-speed Internet access as a means of prodding phone companies to respond
with a competing product.

Powell, appearing before the Senate Commerce Committee for confirmation to a
second five-year term, said phone companies are reacting to cable-modem service
by rapidly deploying digital-subscriber-line service.

He added that local telcos had been reluctant to sell DSL before because they
didn't want to 'cannibalize' more lucrative T-1 lines. But pressure from cable
has made them think twice.

'Phone companies are starting to respond,' Powell said. 'I think the
competitive threat of cable is starting to spur them.'

Sen. Sam Brownback (R-Kan.) said Sumner Cable TV in Wellington, Kan., offered
cable-modem service, but the local phone company didn't offer DSL. He asked
Powell whether this was the result of regulatory disparity between cable and
phone companies.

'I think you see cable leading the way on this technology not just [because],
as some would suggest, of the regulatory freedom, which is a real part of it,
but because cable was very committed to expanding video-programming capacity by
digitizing their systems,' Powell said.

'If anything, I worry to make sure cable companies continue to have
incentives focused on the data side as much as they do on what their traditional
biases have been, which is more capacity, more television,' he
added.