The threat of regulation of the nascent interactive television (ITV) marketplace would be a major mistake and could jeopardize the very development of an ITV marketplace, the National Cable Television Association told the Federal Communications Commission today.

“ITV’s development is nowhere near as far along as cable modem services, which the Commission has wisely refrained from regulating in part because of their incipient nature,” the comments on the FCC’s Notice of Inquiry on ITV services state. “In the case of ITV, there is simply no basis for assuming a problem and proposing regulatory ‘solutions.’”

The NCTA filing sharply questioned the value of trying to establish a regulatory framework for services that, for the most part, do not yet exist. “If, as the notice suggests, interactive services someday ‘could provide tremendous value to American consumers,’ the best way to foster that outcome is to allow the marketplace and emerging technology to determine which services are developed and which services succeed,” the NCTA said. “Merely by sending a signal that nascent technologies and services are in its sights as possible candidates for regulation, the Notice has lowered a dragnet over this emerging, but struggling new industry.”

The NCTA’s filing included two studies, by Harvard Law School Professor Einer Elhauge, an anti-trust expert, and by Georgetown University economics professor Marius Schwartz and John Gale of the Brattle Group. These studies demonstrate that premature government regulation would forestall rather than promote ITV development and that such intervention would disserve competition in the ITV market.

The NCTA’s filing also warned of unintended consequences from a government regulatory endeavor, which could stifle investment and innovation in an industry sector already threatened by the dot-com “meltdown.” The value of companies involved in the development and deployment of interactive television has plummeted over the past twelve months, and the “threat of regulation can only to serve to exacerbate their precarious financial situation,” the filing states.

The NCTA also pointed out the very limited authority to regulate ITV under the Communications Act and the potential to violate the First Amendment rights of cable operators by regulating ITV services. “Regulate first, in the absence of real products and services, and there will be no future market,” the NCTA concludes.

NCTA is the principal trade association of the cable industry in the United States, representing cable operators serving more than 90 percent of the nation’s cable television households. It also represents more than 100 cable program networks as well as equipment suppliers and providers of other services to the cable industry. (www.ncta.com).

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