Court Rules Against Open Access, Again

An appeals court decision Wednesday evening struck a blow to open cable
Internet access advocates and handed another victory to the nation’s number
one cable operator.

The fourth district Court of Appeals in Washington, D.C., upheld a lower
court ruling that stated Henrico County in Virginia doesn’t have the
authority to force MediaOne, owned by AT&T Corp. , to open
its facilities to rival Internet service providers (ISPs).

Judge Blane Michael, in his written opinion, reaffirmed the court’s
insistence that federal regulators, not the states, should decide the issue
of opening cable networks to ISPs.

“We do not have to reach the question of whether MediaOne’s bundled Road
Runner service is a cable service, a telecommunications service or an
information service,” Michael wrote. “For the time being, therefore, we
are content to leave these issues to the expertise of the Federal
Communications Commission (FCC).”

In June 2000, the ninth district Court of Appeals reversed a decision in
Portland, OR, saying the lower court had overstepped its authority by
requiring AT&T to open up its cable network. In the Portland decision, the
appeals court ruled the 1996 Telecommunications Act called for federal
jurisdiction, not local, to decide whether cable networks should open up,
since the ruling dealt with telecommunication services.

This time around, the courts ruled that local entities, Henrico County in
this case, could not force MediaOne to open up its telecommunications
facilities. It’s a slight distinction from the Portland case, but enough
for cable network operators to continue controlling the schedule it opens
up the network for competitive services.

Mark Rosenbloom, vice president for law at AT&T, said the ruling marks the
last local challenge by the lower courts to put conditions on its operations.

“It affirms what we’ve argued since the forced access debate emerged three
years ago in Portland: Federal law very clearly prohibits municipalities
from requiring cable companies to provide telecom services or facilities as
a condition to obtaining a license to operate,” Rosenbloom said. “We hope
this puts an end to the argument that municipalities should mandate forced
access for cable companies.”

Advocates for open access have been trying for years to get a ruling from
the FCC, which has been sitting on a notice of inquiry since last year.

Dr. Mark Cooper, director of research for the Consumer Federation of
America, said its long past the time when the FCC should step in and make a
ruling on open access.

“It’s quite clear that the FCC ought to definitively sort out this issue,”
Cooper said. “The only question is whether this FCC will have the backbone
to stand up and try and figure out what it is and how they’re going to deal
with it, other than just letting it lay out there.

“From our point of view, the important part is to get the cable networks
open,” Cooper continued. “We have been asking the FCC to make a ruling for
several years. The only reason we went to the state level was because the
FCC abdicated its responsibility to make a choice.”

AT&T and other network owners, like AOL Time Warner and
Comcast , have been dragging their feet over open access
since the mid-1990s, when scientists found they could offer another
high-speed Internet option to copper-based digital subscriber line (DSL)
service, this time over the cable network.

From the start, cable companies have said it was technologically
impossible to open up the network to competition, despite the successes
experienced in Canada with its own open access trials. Only last year,
when the FCC threatened to block the merger of America Online, Inc., and
Time Warner, did open access trials begin in earnest.

But the FCC hasn’t come down with a definitive ruling on open access, yet,
other than its stated conditions in the AOL/TW deal, which requires the
second-largest cable operator in the U.S. to open up the network to three
other ISPs in a particular area before AOL does.

According to Michelle Russo, a spokesperson at the FCC’s cable bureau, the
agency started proceedings on the open access debate last September. The
comment period, which ended in January 2001, gave anyone who had an
interest and opinion the chance to be heard.

Seven months later, the FCC is no closer to a decision than it was at the
beginning of the year. “We’re still reviewing the comments,” Russo said.

AT&T, along with AOL/TW and Comcast, has been conducting open access trials
throughout the U.S. this year, but don’t expect to open up access anytime
soon. AT&T doesn’t plan to open up their networks before June of next year.

Strategically speaking, it doesn’t make financial sense for cable owners to
open up their lines any sooner than they have to, since ISPs will then be
able to sign up customers cable owners consider their own. It’s no
coincidence that cable companies refer to the issue as the “forced” access
debate.

Advocates have been trying to use the state courts to force the FCC into
making a decision. A favorable ruling, they hope, would speed up the
timetable to open up the networks. As it stands, AT&T, AOL Time Warner and
Comcast already have a commanding lead over the competition.

AT&T and Comcast, among others, have a big stake in [email protected] , a cable ISP with 3.2 million subscribers. AOL Time Warner
owns the Road Runner service, which provides high-speed cable access to 1.2
million users. Cox Cable has slightly more than 500,000
subscribers, while Charter Cable and Cablevision round out the major cable players with more than 300,000 cable
Internet users each.

Not surprisingly, Robert Sachs, president and chief executive officer of
the National Cable & Telecommunications Association (NCTA), the mouthpiece
of the cable industry, was pleased with the decision.

“The Fourth Circuit’s decision in the Henrico case offers the strongest
judicial affirmation yet that public policy decisions regarding cable modem
services are not within the jurisdiction of local governments,” Sachs
said. “(Wednesday’s) court decision will further encourage the rapid
deployment of high-speed cable Internet services to consumers.”

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