Panel predicts Internet’s future

(U-WIRE) WASHINGTON – The heads of some of the largest Internet access companies testified before the Senate Commerce Committee Tuesday about the prospects of government regulation and the future of the industry.

“It is important to ensure that the enormous benefits of advanced telecommunications services are accessible to all Americans, regardless of where they live, what they do or how much they earn,” said Sen. John McCain (R-Ariz.), Senate Commerce Committee chair. “High-speed data service finally gives us the chance to assure that all people really are given a fair shake in terms of economic, social and educational development.”

The hearing addressed the debate between the cable and telephone industries about consumer access to Internet service providers. Cable companies have been developing cable modems that provide access along with cable service, McCain said.

But other Internet service providers, including America Online, believe cable modem technology deters competition. They want the government to create regulations that provide non-discriminatory access for the last mile to a home.

The telephone industry has been working to provide Digital Subscriber Lines through telephone wires. This service gives consumers access to any Internet service provider that uses the technology. Telephone companies say regulations in the Telecommunications Act of 1996 hurt their ability to deploy DSLs in rural and low-income areas, McCain said. The telephone companies want the government to end regulations that prevent their expansion.

James Robbins, president and CEO of Cox Communications, urged the government to stay out of the Internet field and not regulate the industry.

“Many industries are investing billions of dollars in private risk capital to deploy broadband infrastructure,” Robbins said. “Injecting the government into the way competitive high bandwidth Internet access services are provided would have an entirely predictable result – to slow their investment and deployment.”

The cable industry has invested more than $10 billion in network upgrades, he said, and government regulation will drive up the cost of access for consumers.

Charles Brewer, founder, chairman and CEO of MindSpring Enterprises, said government regulation is the only way to ensure access to the cable and telephone wires needed for Internet communication to all service providers.

“This is the only way we can have a vibrantly competitive market for the core telecomm services of the future,” Brewer said.

Solomon Trujillo, president and CEO of US West, said without action from Congress, telephone companies will not serve low-income areas.

“Those regulations have excluded millions of Americans from the benefits of the Information Age,” he said. “The rules now in place give new market players no incentive to invest in under-served areas and at the same time prohibit companies like US West from filling the void.”

William Schrader, chairman and CEO of PSINet Inc., said the regulation of the telephone companies is in the consumer’s best interest.

“I am also skeptical of Bell Company claims that `just one more regulatory break, and we’ll roll it out,'” Schrader said. “This sort of compromise has been struck before and, invariably, the fabled services never quite materialize.”

-by Matt Berger, U-WIRE Washington Bureau

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