Posted: 09/1999
Lemme In!
ISPs Banging on Broadband Cable's Door
By Kim Sunderland
Don't believe for a minute the cliché that a watched pot never boils. Case in point: the increasingly volatile debate between Internet service providers (ISPs) and cable TV companies over access to broadband cable, an issue that stews even now. It's almost too hot to touch for fear someone's going to get burned.
The ISPs are stirring it up in two different kitchens. In one there's open access, the cable access strategy sought by America Online Inc., Dulles, Va., which wants new laws enacted that let ISPs access cable networks. In the other is leased access, the favored strategy of Internet Ventures Inc. (IVI), Redondo Beach, Calif., which says laws already exist that give ISPs that right of entry. Cable companies are against such strategies saying they've got too much vested in their own networks to open them up to competitors.
"As long as the cable industry is allowed to be the gatekeeper for high-speed broadband Internet, the cable industry--and the cable industry alone--will decide who gets access, and at what price," says Christopher Matern, IVI's general counsel, which is at the center of the cable leased access controversy. "Already, there are signs that cable is using that power to protect its core video business and to cripple competition." He cites claims by ISPs that certain cable companies refuse to accept advertising from ISPs because of their respective ownership stakes in their own broadband Internet services.
Right now several local jurisdictions are haggling over the issue, the Federal Communications Commission (FCC) has been pouring over comments submitted in its cable leased access proceeding and broadband legislation has emerged on Capitol Hill that would extend leased access provisions to all high-speed data services.
IVI forced the issue in June when it asked the FCC to expand its thinking on Internet content. IVI argues that a portion of the Communications Act requiring cable operators to carry local broadcast TV channels also should apply to Internet services. IVI wants the FCC to confirm "that Section 612 of the Communications Act requires that cable operators provide leased access channels to ISPs."
Specifically, IVI's petition asks the FCC to deem Internet video streaming as video programming. So far, the act's 'must-carry' provisions haven't been interpreted to apply to Internet access. "The FCC must break cable's self-imposed and self-serving bottleneck," says IVI President Don Janke. "They have to allow the Internet to grow up to be video."
"Video programming is part of the multimedia experience that the Internet is evolving to, and broadband access will dramatically enhance the quality of video over the Internet," says Flavio Andrade, sales director for ISP dotSTAR Communications, Pensacola, Fla. "By claiming that video programming cannot be delivered through the Internet, cable operators are denying a simple, verifiable fact. We challenge them to ... prove to someone that what is being offered there is not video programming." dotSTAR also plans to file a complaint with the FCC against Cox Communications Inc. for not complying with the cable leased access provisions of the Telecommunications Act of 1996.
IVI and dotSTAR say they can't gain cable carriage in many of the markets where they've applied. For instance, Cox Communications, the local cable operator in Pensacola, says the law is there for video programming only, and Internet access is not video programming. Competitors believe if cable modem system owners don't provide open access, the outcome will be that:
- monopolistic pricing and other anti-competitive practices will be encouraged;
- established and wealthy companies will be favored at the expense of start up companies; and
- consumers will have controlled access to economic, political and entertainment content.
So far, Portland, Ore., and Broward County, Fla., agree. Portland officials refused to renew AT&T's cable franchises without open access, while Broward County simply required open access of AT&T's networks for unaffiliated ISPs. Other ISPs, including Midwest Communications Inc., Dubuque, Iowa, and 10 others in Texas, have embraced the leased access cause and expect similar rulings around the country. In San Francisco, however, council members agreed with AT&T that the telecom giant's cable modem service enhances competition because the Bells are forced to offer better pricing and services.
Still mulling the issues over are local regulators in Boston; Detroit; Los Angeles and Oakland, Calif.; Miami; and Richmond, Va. A petition also has been filed in Massachusetts to put open access cable to a statewide vote. The measure would make it a law in Massachusetts that all cable TV companies offering high-speed Internet access be required to open their systems to competitors. Under Massachusetts law, the open access initiative ballot will require the collection of approximately 58,000 signatures. Once enough signatures are collected, the state legislature can opt to pass the open access initiative this fall rather than putting it to a statewide vote. If the legislature doesn't act, the measure would appear on the November 2000 ballot. FCC Chairman William E. Kennard wants a national policy to govern high-speed access to the Internet via cable TV lines. He believes "chaos" would ensue if all local regulators set separate rules.
So far the commission hasn't supported open access. But all the heat in the kitchen may push the FCC to put the issue on its September agenda. Reply comments on IVI's petition were submitted to the FCC in late July, so with a compiled record, the situation now is ripe for discussion.
The FCC's "slowness [on this issue] has always gotten in the way," IVI's Janke says. "Eliminating that is what this is all about."
