Kennard to NCTA: Power Struggle Destructive

Power struggles among media companies can erode public and regulatory trust in the cable industry, Federal Communications Commission chairman William Kennard warned attendees at the National Cable Television Association's annual convention in New Orleans last week. Kennard referred specifically to the recent squabble between Disney Corporation and Time Warner, which led to a blackout of Disney's ABC network in key markets earlier this month. Such actions call into question the ability of the industry to police itself, Kennard told cable executives.

Kennard stated that, for the most part, he would prefer his agency pursue a hands-off policy toward the industry. "The dispute between Time Warner and Disney/ABC raised demons of distrust among consumers," Kennard asserted, challenging the NCTA to "police your own" before consumers demand governmental action to prevent future program disruptions. "I believe that in this robust technological age, market-based solutions are the best and most efficient way to satisfy the demands of American consumers," Kennard said.

Kennard warned that a failure to do so could result in increased scrutiny of the industry by regulators and lawmakers. The Time Warner–Disney spat angered millions of TV viewers and "has called into question . . . whether your industry can be trusted to be an honest gatekeeper to the Internet," Kennard said, alluding to "lingering questions about the undue market power" of the cable industry.

Robert Sachs, president of the NCTA, called Kennard's remarks "healthy advice." This year's convention focused on the growing importance of the so-called broadband initiative, in which the nation's cable systems are beginning to move into the high-speed Internet market. Whether or not cable companies will provide their customers with a choice of Internet service providers has been a concern both within the industry and at the FCC, which in coming months must decide on large-scale mergers such as Time Warner's takeover by America Online Inc., and AT&T Corporation's merger with cable company MediaOne Group Inc.