Surprise! FCC Cable Ruling Challenged

In a move that came as no surprise to anyone in the telecommunications
industry, the Media Access Project (MAP) filed a lawsuit Monday afternoon
against the Federal Communications Commission (FCC) over its decision to
keep America’s cable networks closed.

Nearly two weeks ago, the FCC took a major step towards deregulating
the telecommunications industry by ruling high-speed Internet services via
cable an “information” rather than “telecom” service, freeing cable
operators from provisions of the Telecommunications Act of 1996.

MAP filed with the U.S. Court of Appeals for the District of Columbia on
behalf of the Consumers Union, the Center for Digital Democracy and the
Consumer Federation of America, its three citizens groups, to challenge the
ruling.

Andy Schwartzman, MAP president, said he expects his lawsuit to join a raft
of other challenges to the FCC ruling, given the anticompetitive nature of
the rulemaking.

This is a First Amendment concern, he said, which strikes at the heart of
the American consumer’s freedom to choose interactive services. Failure to
overturn the FCC’s decision, he added, would take away that choice.

“If (the decision) is not reversed on appeal, users will have a closed
network that will replicate all of the problems that monopoly cable
television service has brought to the public over the years,” Schwartzman
said, “no choice of provider, lousy customer service and content that is
selected and controlled by the cable operator, rather than by the user.

Verizon Communications , one of four incumbent telephone
companies providing digital subscriber line (DSL) service, chimed in
with a petition filed at the FCC Monday evening.

The petition respectfully called the FCC ruling “arbitrary, capricious and
an abuse of discretion,” when compared with the treatment of the incumbents
and their broadband service.

The telephone companies are required by the Telecom Act to provide “open
access” to its network for ISPs, at below-cost prices. The cable companies
have no such stricture, and likely won’t if the FCC’s ruling sticks.

Bob Bishop, Verizon spokesperson, said the petition isn’t just the latest
round of maneuvering between the two industries for position, but an
attempt for parity.

“We filed the petition based on the disparate treatment of cable modems and
telephony broadband when they are a like service,” Bishop said. “Our petition
was simply filed to preserve our argument that these two services should be
treated alike in the regulatory arena.”

Many ISPs consider the telephone company’s attitude towards “parity” a
thinly-veiled attempt to gain regulatory relief from the FCC itself to
control their network. Despite more leeway from the pro-business Bush
Administration appointee to chair the FCC, Michael Powell, the Baby Bells
have been pushing harder than ever to free themselves from the Telecom Act.

“We would not wish the regulatory regime that exists on our broadband
service, on the cable people — that is not the solution to the problem,”
Bishop said. “We feel, that insofar as their service is deregulated, our
service should be treated the same in the regulatory environment.”

Open access, or forced access if you are a cable company owner, would allow
independent Internet service providers (ISPs) a chance to provide
competitive high-speed Internet service on cable networks — similar to how
providers offer digital subscriber line (DSL) access on telephone company
lines.

To date, only one major cable operator, AOL Time Warner ,
has open access to its network — one of several of conditions placed by
the FCC and the Federal Trade Commission (FTC) to ensure industry
competitiveness for the nation’s second-largest cable operator, No. 1
dial-up ISP and “old media” giant.

AT&T Broadband , the largest cable network in the U.S., and
the other national networks, free from regulatory oversight, have
incremental open access plans and won’t start allowing ISPs access to the
network until later this year at
the earliest in select markets.

Both the petition by Verizon and the MAP lawsuit are months away from any
resolution. Schwartzman said the courts likely won’t look at the suit for
another several months, while the Verizon complaint doesn’t have any sort
of deadline for resolution.

If successful, the MAP suit could negate the FCC rulemaking or force the
agency to revise their position. Something similar, though with exactly
the opposite effect, happened back in May 2000, when a federal judge overturned
a decision by the Henrico County, Va., board of supervisors to force AT&T
to open up its cable network in the county.

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