IN A VICTORY FOR THE CABLE TV INDUSTRY and phone companies seeking deregulation of their DSL networks, the U.S. Supreme Court has upheld an FCC ruling that frees cable operators from requirements to open their broadband lines to other Internet service providers. This is bad news, however, for Web content providers like Yahoo! and Internet phone firms like Vonage Holdings Corp., which need access to the phone and cable broadband networks to deliver their services.
The high court ruled in late June that the FCC had the right to treat cable-modem service as an “information service,” a classification that is subject to fewer regulations than those by which regional phone carriers must abide.
The 6-3 ruling overturning the U.S. Court of Appeals for the Ninth Circuit dealt a blow to Brand X Internet LLC, a California-based Internet service provider, and other ISPs such as EarthLink Inc. seeking access to the cable broadband networks controlled by Comcast Corp., Time Warner Cable and other large cable operators.
It also gave the biggest local phone companies fuel to lobby the FCC to deregulate their DSL networks. “We look forward to working with [FCC Chairman Kevin Martin] and the entire commission to move forward at full tilt with its nearly four-year-old proceeding to provide the same flexibility to the broadband service of phone companies,” says Forrest Miller, group president of SBC Communications Inc., the second largest local phone company.
Following the ruling, Martin indicated the commission plans to treat all broadband providers the same. “This decision provides much-needed regulatory clarity and a framework for broadband that can be applied to all providers,” he said. “We can now move forward quickly to finalize regulations that will spur the deployment of broadband services for all Americans.”
Phone companies whose current form of broadband — DSL — has been classified as a “telecommunications service” must open their high-speed networks to other ISPs on nondiscriminatory terms and follow other common carrier rules.
Three years ago, however, federal regulators indicated plans to deregulate the DSL market. The FCC tentatively concluded wireline broadband Internet access services are information services, with a telecommunications component, rather than telecommunications services. But the federal appeals court in San Francisco put a wrench in any anticipated change in policy when it ruled in 2003 that the FCC improperly had classified cable-modem transmission as an information service.
Consumer groups voiced dismay with the Supreme Court’s decision and contended the FCC’s rulings could choke the advancement of broadband by exempting the phone companies and cable operators from requirements to open their networks to other Internet providers.
Meanwhile, Rep. Joe Barton, the Texas Republican chairing the House Committee on Energy and Commerce, commented:
“While I am pleased that the court has removed the clouds of uncertainty regarding the proper regulatory framework for broadband services, this decision and the uncertainty that has existed in the market since the Ninth Circuit’s erroneous decision demonstrate why Congress needs to modernize the Communications Act,” he says.
“Congress needs to remove the ambiguity regarding what broadband services are and how they should be regulated.”
— josh long
| Links |
| Brand X Internet LLC www.brandx.net Comcast Corp. www.comcast.com EarthLink Inc. www.earthlink.net FCC www.fcc.gov Legg Mason www.leggmason.com SBC Communications Inc. www.sbc.com Time Warner Cable www.timewarnercable.com Verizon Communications Inc. www.verizon.com Vonage Holdings Corp. www.vonage.com |
