Press Release Thursday, July 29, 1999	Liz Rose or Jennifer Seeger (202)223-9541

Washington, July 29, 1999: Several of the nation's leading consumer and media policy advocacy groups provided evidence to FCC Chairman Bill Kennard today that the Commission's "hands-off" policy for broadband cable access, granting cable operators the right to exclude other Internet service providers (ISPs) from their high-speed networks, "would strip the Internet of the very qualities that have made it one of the most powerful vehicles for free expression and economic growth."

The groups-including Consumer Federation of America, Consumers Union, Media Access Project, and the Center for Media Education-also challenged the FCC Chairman's belief in promises made by AT&T and other cable system operators to provide "click-through" access to all areas of the Internet. Neither the cable industry's history as a tightly controlled delivery system, the groups insisted, nor the future of network technology now being deployed that will monitor, measure, and manage broadband network traffic, justifies the Chairman's faith. For the growing numbers of Americans whose online access comes through high-speed cable connections, the Internet will become a proprietary system.

In their letter, the groups provided additional documentation concerning the nature of cable broadband architecture and the potential use of network management practices to thwart competition from unaffiliated content providers. "It's clear that cable broadband technology allows the cable industry to impose a monopoly business model over the next generation of the Internet," explained Mark Cooper, Research Director of the Consumer Federation of America. "The Commission must act swiftly to ensure that the Internet doesn't become the victim of the same discriminatory practices that have long stifled competition in cable's video programming, resulting in more price increases and fewer choices for consumers and content providers alike."

The groups attached several recent "White Papers" and other materials from the Cisco Corporation-a leading cable broadband network provider-that demonstrated how the cable industry will be able to exercise tight control over network traffic:

* Designating proprietary content for the highest transmission speeds, while relegating unaffiliated and/or competitive material to less efficient transport.

* Placing restraints on the ability of specific users (or classes of users) to upload or download certain kinds of data (streaming video that might be seen as competing with the cable system's own offerings, for example).

* Restricting Internet bandwidth according to the origin or the destination of traffic, based on types of content, nature of service, or even particular brand of product.

* Establishing a pricing structure that encompasses several tiers of service, maximizes advertising revenues, and derives profits from online transactions.

In one of its "White Papers," for example, Cisco informs cable operators that they can "restrict" incoming content and "subscribers' outgoing access" to "discourage its use." But it adds that operators "could promote and offer your own or partners' services with full-speed features to encourage adoption of your services...." Operators could also "specify that video coming from internal servers receives precedence and broader bandwidth over video sources from external servers."

With its new networking technology, Cisco promises the cable industry, "you can optimize service profits by marketing 'express' services to premium customers ready to pay for superior network performance." What was once hailed as a democratic, participatory medium, in other words, the Internet under cable operators' control will become a distinctly pay-per-view experience.

"The impact of potentially discriminatory policies on competitive content providers would have a devastating impact on the capacity of the Internet to promote diversity," noted Andrew Jay Schwartzman, CEO of Media Access Project. Content providers ranging from nonprofit civic groups to new, start-up entrepreneurs will find themselves marginalized and excluded from twenty-first-century communications networks, he explained, as will traditionally underserved audiences that have so much to gain from a genuinely open Internet. "The fundamental nature of the Internet-its ability to support a wide range of distinctive applications and content providers-would be sacrificed if broadband networks are allowed to create traffic-management policies that can openly discriminate against competitors," observed Schwartzman.

"The ability to monitor every packet and create new classes of service based on ability to pay threatens to create an even larger digital divide," said Jeff Chester, executive director of the Center for Media Education. "Under such a scheme, the costs for Internet access will skyrocket, making it unaffordable for many. The cable industry's gain will be American society's loss."

"The FCC has spent more time supporting the cable industry's growing monopoly over multichannel television and the Internet than seriously investigating how such policies harm consumers and citizens," said Gene Kimmelman, co-director of the Washington office of Consumers Union. "Chairman's Kennard's watchful waiting' policy, ironically, has permitted the cable industry to begin building a system that will alter the basic character of the Internet. And in the process, 'the most participatory form of mass speech yet developed' will be dominated by a few large entrepreneurs who decide whose speech is valuable and whose speech does not deserve air time."

The groups challenged the FCC Chair to look closely at the evidence they presented, and to initiate a formal review of the negative implications of the cable industry's exclusive control of broadband access to the Internet. The FCC's current "wait-and-see" approach, the groups warned, will only serve to undermine the free flow of ideas on the Internet, placing the control of this essential public resource in the hands of a few cable conglomerates.