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Proposed Redefinition of ISPs Sparks Criticism

WASHINGTON -- The Federal Communications Commission (FCC) on Thursday proposed rule changes redefining telephone-based broadband Internet access services that brought questions and dissent from its own members, industry watchdog charges of creating a new Internet monopoly and even prompted one commissioner to raise the specter of an Internet access tax.

Championed by FCC Chairman Michael K. Powell as a fast track to greater broadband deployment, the commission issued for comment rules that would classify Internet service providers as "information services with a telecommunications component," rather than their current status as a telecommunications service. As proposed by the FCC, information services would include voice mail and e-mail, which ride over telecommunications facilities.

Currently, incumbent local exchange carriers must interconnect with local telephone and broadband Internet providers on a non-discriminatory basis under open-access, common carrier rules. However, critics, including FCC Commissioner Michael J. Copps, fear the proposed new rules will remove the access requirement from the still-growing DSL broadband industry, and further shift market power to the four remaining incumbent local exchange carriers.

"I bristle at that suggestion," Powell told reporters after the meeting. "It is short sighted and incorrect. It is now time for fewer words and more action. With today's decision, among several others, we have stopped talking about promoting broadband and started acting."

Copps was quick to counter with his dissent.

"The majority frames this Notice as an exploration of the statutory classification of telecommunications, telecommunications services, and information services," he said. "But what we really are deciding is whether the transmission component for broadband services, including for Internet access should be offered outside the statutory framework that applies to telecommunications carriers. This is an enormously far-reaching decision and I, for one, am nowhere near ready to go there, even tentatively."

Jeffrey Chester, the executive director of the Center for Digital Democracy was quick to question the FCC action, suggesting that the proposed rule changes should be called the "Cable and Bell Internet Monopoly Act of 2002. By declaring that broadband is an information service, the FCC is giving gatekeeper control to a handful of cable and Bell super-monopolies."

FCC sources told InterntNews the criticism is unwarranted and were quick to point out only the proposed reclassification of Internet service providers has been made public. According to the sources, the proposed rules, which will be published in the next several days, are, in fact, only a series of questions asking how redefined ISPs "might" be treated under the law.

"We don't have anything proposed, we're only asking questions," one source said. "ISPs were originally classified in a narrowband environment."

Also proposed Thursday was a rule seeking public comment on whether to extend universal service obligations -- payments by common carriers to the government -- to providers of broadband Internet access, prompting Commissioner Kevin J. Martin to comment, "In particular I object ... that we will consider what is essentially an Internet access tax."

Martin added, "the item asks, among other things, whether non-wireline, facilities-based providers of Internet services may, as a legal matter, or should as a policy matter, be required to contribute; whether all facilities-based broadband Internet access providers should eb subject to the same contribution obligations; and whether the public interest requires exercise of our permissive authority to extend universal service obligations to non-wireline providers. In my view, we should not undertake such an inquiry at this time."