FCC chief urges industry to keep consumers in sight

<br>CHICAGO (AP) _ The head of the Federal Communications Commission is prodding cable companies to keep consumers at the forefront as they zoom into the digital world with new TV, Internet and phone products.

Wednesday, June 13th 2001, 12:00 am

By: News On 6

CHICAGO (AP) _ The head of the Federal Communications Commission is prodding cable companies to keep consumers at the forefront as they zoom into the digital world with new TV, Internet and phone products.

Commission Chairman Michael Powell gave the cable industry high marks for transforming itself from a service loathed by Americans and feared by regulators to one on the brink of the communications revolution.

``Hating one's cable company became a national pastime,'' Powell said Tuesday at the National Cable & Telecommunications Association meeting here. But the cable industry's story is like a fairy tale, he said, and ``there has been a digital kiss placed on that toad.''

Lest cable companies get ahead of themselves and ruin that happy ending, Powell urged them to think carefully about the consumer impact of moves such as hiking their rates.

``Consumer value must always remain high with the products and services you deliver,'' he said. Powell pressed the industry to look for ways to make high-speed Internet access affordable and broadly available.

He also warned cable companies to be careful in how they use their strategic position as a gatekeeper of TV content and Internet services that reach their consumers.

``Cable will be one of the great digital gateways to the consumer,'' Powell said. But, he told the group, ``you must be cognizant of not misusing that power.''

If companies don't heed that advice, it ``could result in the erosion of the healthy regulatory environment that currently exists,'' he added.

Competitors in the Internet and programming markets have raised concerns that cable operators will discriminate against their services in delivering them to consumers. For example, some TV programmers are developing interactive content that would allow consumers to do things like get more information about a team by clicking a button on the TV screen.

Developers are worried that cable operators won't pass all these special features through to consumers. Programmers and Internet providers want the government to place more requirements on cable operators to prevent them from favoring their own content or restricting offerings by rivals.

The FCC is studying both issues. But in general, Powell has indicated his preference for letting the marketplace work rather than having the government step in with heavy-handed regulation.

Powell also recommended other steps for the industry to preserve good will with Washington and consumers. He said cable companies should work with broadcasters to help move along the transition to digital broadcast TV.

Broadcasters and cable companies have butted heads on a number of issues related to digital TV. For example, broadcasters want both their analog and digital signals to be carried on cable systems until they begin airing shows only in digital. Cable companies say such a requirement will use up too much space, forcing them to drop popular cable networks.

Consumer advocates said Powell's efforts to encourage the industry into good behavior do not go far enough.

``His urging doesn't openly protect consumers,'' said Jeff Chester of the Center for Digital Democracy. Chester said Powell's remarks won't stop cable companies from using their networks ``to make the openness of the Internet into a closed system.''