Cable Has Telcos' Number

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The cable industry must get ready to fight Bell telephone companies’ efforts to avoid most federal or local regulation as they enter the Internet-video market, National Cabe & Telecommunications Association president Robert Sachs told the Washington Metropolitan Cable Club Tuesday.

If video competitors are allowed to cherry pick the markets they service, cable will be saddled with much higher costs of doing business as they maintain required infrastructure in low income areas.

He said SBC’s plans to offer Internet video to high-income and middle-income customers violate current communications law and will only be possible if the federal government and local cable franchise authorities go along.

”Cable operators must be vigilant about plans by phone companies to circumvent the local franchising process to gain unfair competitive advantage by red-lining or any other means,” Sachs said during what is likely his last appearance before the WMCC.

Sachs plans to leave NCTA soon after the trade group’s board names a successor.

Under the Communications Act, cable operators may not deny service to any group of potential residential subscribers because of the income level of the area in which they live.

An SBC request to escape FCC regulation of its Internet-based telecommunications is pending at the commission. SBC officials also maintain that all of the company’s Internet-delivered services are free of local regulation.

“It is not surprising that the NCTA, whose members must face this potential competition, would argue that the new entrants must be saddled with legacy franchise regulations,” SBC said in a statement released after Sachs’ speech. “SBC's aggressive, initial three-year rollout plan will reach approximately 18 million customers - over half of our current customer base - and is expected to expand after this initial three-year phase.”

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