ISPs Air Grievances at ISPCON

SANTA CLARA, Calif. — A coalition of smaller Internet service providers Monday expressed concerns that they are being regulated right out of their jobs.

While trying to resuscitate their industry financially, the sector has been bombarded with legal issues of late, including the pending extension to the Internet tax moratorium in the Internet Freedom Act and the cable open access appeal in the 9th Circuit Court..

For example, Jim Pickrell, president of Brand X Internet says companies like his and other independent ISPs desperately need access to connect to customers.

“We see the biggest problem with cable companies, the current administration and the FCC, which is hostile to competition,” Pickerell said to attendees at the ISPCON event here.

Brand X is at the center of the FCC’s recent Wireline Broadband decision, which classified a cable modem service as an interstate information service making it subject to FCC jurisdiction. The FCC determined that cable modem service is not a “cable service” as defined by the Communications Act. The FCC also said that cable modem service does not contain a separate “telecommunications service” offering and therefore is not subject to common carrier regulation.

Earlier this month, the Court upheld the claim of the Calif.-based ISP that the cable companies are required by law to provide non-discriminatory access to competing Internet service providers. The ruling says companies like AOL and Comcast Pickerell says the reversal is just the first step in opening up cable modem network access to independent ISPs.

“The battle is not over yet. If you plan on being around next year you better wake up and get involved in some of these issues, ” he warned.

Brand X is finding support in some high places including from Earthlink

Company VP of Law and Public Policy Dave Baker told despite the ISP’s station as a national provider they are still at the mercy of carriers.

“When it comes to the Bells and cable companies, we stand on the side of smaller ISPs,” Baker said. Mostly, we’re concerned that stretching the definition of providers to include telecom services benefits the Bells and not the providers.

For example, Baker points to a DSL loop, whereas if a telco like Verizon sells a DSL loop to a Verizon subsidiary it creates a virtual tax-free situation. By contrast, he said Verizon selling to an ISP like Earthlink would be taxed at both the state and federal level.

In a similar situation, Baker said a court ruling earlier this month that allows Vonage to conduct regulation-free IP telephony services, yet does not have to register as a telephone company in order to conduct business in Minnesota.

Both Baker and Pickerell say ISPs need to press Congress on the issues. A House vote is due November 7 on the issue.

“Done right, this will make a moratorium on access rights,” Baker said. “Done wrong it could have strong anti-competitive effects.”

But with recent subscriber stats showing two-thirds of Internet-using Americans still on dial up, California ISP Association (CISPA) Executive Director Mike Jackman says customers are starting to look to alternatives to both DSL and cable.

“I’m seeing many more ISPs delve into wireless broadband as many dialup customers are leery of relying on the LECs and cable companies as their ISP,” Jackman told “I’m also seeing many more ISPs adding, ‘accelerated dialup’ as a service offering. In California, for example, Pac-West and o1 Communications are big wholesalers of this service.”

The plus here, says Jackman, is that the user doesn’t have to change their “mode of operating.”

“They just get 2-3 times their normal 56K speed at a fraction of the price,” he said.

ISPCON is co-produced by Jupitermedia, the parent company of this Web site.

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