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Federal Communications Commission
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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

October 13, 1999
Michelle Russo 202/418-2358

FCC Chairman Kennard Releases Cable Staff Report on the State of the Broadband Industry
Provides Evidence of Emerging Competition and Importance of National Policy

Washington, DC - FCC Chairman William E. Kennard today released a report by the staff of the Cable Services Bureau on the state of the broadband industry. The report concluded the broadband industry is in its infancy and regulatory restraint continues to be warranted at this time.

Chairman Kennard said, "This report provides an objective and detailed snapshot of the broadband industry and a thorough overview of the technical and public policy issues related to this dynamic and promising market. I'm sure the report will prove to be a valuable resource to those seeking to understand the many competing issues and interests that must be balanced to insure that American consumers soon will be able to receive advanced services at competitive prices."

Chairman Kennard asked the Cable Services Bureau to convene monitoring sessions with key stakeholders and this preliminary report summarizes the findings from the meetings held thus far. The Cable Bureau, working with the Common Carrier Bureau, the Office of Plans and Policy and the Office of Engineering and Technology, will continue to engage in ongoing dialogue with various stakeholders and fulfill the Chairman's pledge to monitor the industry.

The monitoring sessions invited key industry stakeholders to weigh in with their opinions and observations. These included representatives from Internet service providers, online service providers, local exchange carriers, long distance telephone companies, cable operators, community organizations, financial analysts, academics and local franchising authorities (LFAs). The Cable Bureau asked the participants to engage in a candid, not-for-attribution, discussion of the major issues and challenges facing consumers, the industry, regulators and policy makers with respect to the deployment of broadband services.

The report outlined some preliminary findings about the broadband industry to date:

  • The broadband industry is in its infancy.
  • Cable modem deployment has spurred alternative broadband technologies, like digital subscriber lines (DSL).
  • Regulation or threat of regulation ultimately slows deployment of broadband.
  • Market forces will compel cable companies to negotiate access agreements with unaffiliated ISPs, preventing cable companies from keeping systems closed and proprietary.
  • If market forces fail and cable becomes the dominant means of Internet access, regulation might then be necessary to promote competition.
  • Rapid nationwide broadband deployment depends on a national policy.

The report acknowledged the risks associated with a regulatory policy of forbearance. Risks exist, such as the threat of a cable monopoly of broadband, the creation of an irreversibly closed system and the threat of inconsistent local regulation. Notwithstanding these risks, the Cable Services Bureau concluded that the better course of action is regulatory restraint. The Cable Bureau staff recommended that if the threat of a monopoly emerges, the Commission should move swiftly and consider regulatory options.

The report noted that the Commission's national broadband policy is facilitating vigorous deployment and competition. The Cable Bureau staff also said that this policy upholds the spirit of the 1996 Act's objective to promote competition and reduce regulation in order to secure lower prices and better services for Americans.

A full copy of the report can be found at the FCC website ( on the Broadband Internet Access page.


Report No. CS 99-14

Cable Services Bureau Contacts: Deborah A. Lathen, Adonis Hoffman, To-Quyen Truong, Clint Odom at (202) 418-7200.