FCC Launches Inquiry Regarding High-Speed Internet Service

The Federal Communications Commission (FCC) is moving forward to explore issues surrounding high-speed Internet service, particularly that which is provided over cable systems, so-called “cable modem services,” by issuing a Notice of Inquiry (NOI). The critical issue in the NOI is whether or not the Commission should require access to cable and other high- speed systems by Internet Service Providers (ISPs).

The NOI seeks comment on the appropriate legal and policy approach to be accorded to high-speed Internet service provided over various platforms, including cable, wireline, wireless, satellite, broadcast and unlicensed spectrum technologies.

With respect to access by ISPs to high-speed cable systems, the Commission ‘s approach has reflected one of regulatory restraint, which has resulted in an industry movement toward voluntary agreements allowing access to cable modem platforms by ISPs unaffiliated with the cable system operator. However, recent court cases have placed cable modem service under various regulatory classifications, resulting in some uncertainty and confusion in the marketplace.

Earlier this week, the opening phases of a trail began before the U.S. Court of Appeals for the Fourth Circuit in Richmond in which Henrico County, Va., asks that cable modem service be classified as a telecommunications service and should be recognized as such. Verizon Communications is supporting Henrico County’s defense of its cable open access ordinance, which requires cable companies to open their high-speed networks to independent ISPs, in the same manner that telephone companies provide nondiscriminatory service to ISPs

While the Commission has exercised regulatory restraint in the area of high-speed Internet services, it at the same time has sought to reduce barriers to market entry, to encourage market investment, and to promote the rapid and widespread deployment of high-speed Internet services by all providers. These initiatives have proven successful, as subscribership to high-speed cable systems grew 150 percent last year, with other high-speed service providers experiencing similar growth.

In this NOI, the Commission seeks input as to whether it should continue its existing policy for cable modem service in the context of a national policy framework for promoting deployment and competition in high-speed Internet services. The Commission’s goals in initiating this proceeding include:

“EarthLink is pleased that the FCC has issued a Notice of Inquiry on the issue of open access. While we hoped that the FCC would have acted sooner and more decisively, we are glad that they are now taking steps to address this issue,” said vice president for law and public policy at EarthLink Inc. “We hope this inquiry leads to a Notice of Proposed Rule Making and that the Commission will ultimately establish a national framework to ensure consumer choice in cable Internet access.”

In December 1999, the Henrico County Board of Supervisors passed a cable open access ordinance as a condition of transferring MediaOne’s cable license to AT&T, as part of its merger. The cable industry challenged the County’s ordinance in the U.S. District Court for the Eastern District of Virginia. In May, the court found that the County’s franchising authority was preempted by federal law but did not decide whether cable modem service is properly classified as a telecommunications service or a cable service.

Henrico County and Verizon appealed the district court’s decision and the proper classification of cable modem service is now the threshold issue before the appeals court. Agreeing with Verizon, the openNET coalition — representing nearly 1,000 independent Internet service providers and Internet-related companies — filed a friend-of-the-court brief arguing that cable modem service is a telecommunications service.

The Henrico open access ordinance is designed to ensure that consumers have a cho

ice of ISPs without having to use and pay for the ISP affiliated with their cable company.

In June, the Ninth Circuit Court of Appeals in San Francisco ruled in an identical case involving the City of Portland that cable modem service is a telecommunications service.

“The Ninth Circuit was right on the money,” said John Raposa, Verizon vice president and associate general counsel. “High-speed, two-way Internet communications whether provided by the telephone company or a cable company is a telecommunications service. As such, lightning-fast cable Internet access should be open to independent ISPs, giving Henrico County residents and all cable broadband customers a choice of ISPs.”

Of course, one of those ISPs would be Verizon, formed by the merger of Bell Atlantic and GTE. Verizon companies are the largest providers of wireline and wireless communications in the United States, with 100 million access lines and more than 25 million wireless customers.

In its brief and before the court, Verizon argued that Internet access offered by cable companies is a telecommunications service and should be open to independent ISPs, just like high-speed, DSL (digital subscriber line) service provided by local telephone companies. However, if the court believes instead that cable modem service is a “cable service,” then Henrico County, as the local cable licensing authority, has the right to require open access.

“This case sets the stage for the future of the Internet,” Raposa said. “Open access to telephone networks has fueled the explosive growth and innovation of the Internet. Cable companies are poised to choke off that growth and innovation, and absent open access can censor Internet content available to consumers. America can’t afford to let cable companies dictate the future of the Internet.”

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