Regulators To Study Interactive TV

Friday, January 19th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) â€” Federal regulators said Thursday they would take a closer look at whether rules are needed to shape the emerging market for interactive television, which lets consumers use the Internet from their TV sets.

The process was triggered by the federal review of the AOL Time Warner merger. The combined company is expected to make steep inroads in offering the new service by drawing on Time Warner's content and AOL's wide Internet reach.

In examining the merger, the Federal Communications Commission heard from consumer advocates and content companies that recommended safeguards to ensure choice as this new service develops. Particularly, those parties expressed fears that a cable company could steer viewers to its own interactive programming and away from competing content.

The FCC did not impose any specific conditions dealing with interactive television on AOL Time Warner. But the agency said it would study the issue more broadly.

Interactive programming carries special signals that allow consumers to access data or Internet information from their sets. For example, interactive signals might let a viewer look up profiles of players during a televised game or get more data on a news report.

But some worry that cable operators that both distribute programming and create their own could discriminate against rival interactive content. For example, a cable operator could carry competing programming but refuse to pass through the special signals needed for interactivity, critics say. That could limit viewer choice and leave them with only certain interactive programming.

The cable industry bristled at the initiative to examine such a nascent industry.

``Asking dozens of hypothetical questions about regulating a business which has yet to take form still puts the cart before the horse,'' said Robert Sachs, president of the National Cable Television Association. ``Interactive TV is just starting to develop and is likely to evolve in different ways. There is no evidence to suggest that government regulation is called for here.''

The decision by the agency to study the issue does not guarantee that any rules will be written. If the FCC does implement new regulations, it could take months to propose those steps.

The agency acknowledged that interactive television is still an emerging service but said it wanted to address early on any competitive concerns.

Interactive TV ``has the potential to bring huge benefits to the American consumer, not to mention substantial revenues to service providers,'' said FCC Chairman William Kennard. ``This proceeding is a valuable step in making sure that the public can benefit from a robust, competitive marketplace.''

Consumer groups said the FCC step should put cable companies on notice that they cannot abuse their role of transmitting programming to consumers' homes.

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On the Net: Federal Communications Commission site: http://www.fcc.gov

National Cable Television Association: http://www.ncta.com/