The FCC took another major step yesterday toward radical revision of the rules governing broadband Internet services by classifying cable modem service under the minimally regulated category of “information services.”
The move pushed the regulatory environments for cable modem and DSL services much closer to the “level playing field” the ILECs have been campaigning for, although many questions remain to be answered before it is know precisely how alike the regulatory regimes for the two industries will be. The commission still has not issued the notice of proposed rulemaking (NPRM) under which it intends to consider classifying DSL as an information service with an underlying telecommunications component. Just where that NPRM, announced a month ago (see the Feb. 15 XCHANGE online story), will draw the line with regard to unbundled access or resale of DSL is not known, although the commission’s intent appears to be to minimize such constraints on ILECs, based on the comments of various commissioners at the time of the announcement.
As for cable, the commission’s declaratory ruling got cable operators off the hook with respect to the issue of whether cable modem service should be classified as a telecommunications service, which means the common carriage access provisions of the Telecom Act will not apply. But precisely what the new classification means for cable remains to be determined by the commission in an NPRM proceeding that it announced with issuance of the order yesterday.
That rulemaking will look at “whether there are legal or policy reasons why [the commission] should reach different conclusions with respect to wireline broadband [DSL] and cable modem service,” the commission said. And it will determine “whether, in light of marketplace developments, it is necessary or appropriate at this time to require multiple ISP access” to cable data links.
That point was discussed in a statement issued by commissioner Kathleen Abernathy, who noted that while AOL Time Warner is required to offer multiple ISPs access under terms of the AOL Time Warner merger agreement and certain other major MSOs (multiple system operators) have begun voluntarily to do so, the commission might find that some degree of regulation is necessary. “I remain concerned that some cable operators may continue to offer consumers only a single brand of ISP service or that cable operators generally may offer only two or three options,” Abernathy said. “As the owners of the nation’s most extensive broadband architecture and as the leading providers of broadband service, cable operators have the potential to suppress competition.”
Abernathy noted that, under the commission’s Computer II and III rules, information services provided by common carriers remain subject to open access requirements, whereas those rules would not apply to cable information services. “If the commission decides to maintain some form of access obligation at the conclusion of the Wireline Broadband proceeding [the NPRM covering DSL], we would need to develop a compelling rationale if we were to refrain from imposing an analogous requirement on cable operators,” she added.
As he did with the DSL NPRM, commissioner Michael Copps issued a dissenting statement against the cable ruling in which he chastised the commission for moving beyond what he believes is the intent of the Telecommunications Act. In this case, he said, freeing cable modem service from the regulations, under Title VI, that govern cable video service or from the Title II rules that affect cable voice services, opens the door to cable operators’ offering both voice and video in Internet protocol format without being subjected to any of the normal regulatory bonds. “I cannot conceive that Congress intended to remove from the statutory framework core communications services such as the one at issue in this proceeding,” Copps said.
The commission’s action was welcomed on both sides of the cable/telco divide. At BellSouth, Bob Blau, vice president for executive and federal regulatory affairs, issued a statement saying, “BellSouth is encouraged and certainly commends the commission’s effort to rethink the type of regulatory framework that should apply to cable modem and DSL services and, more importantly, whether these services need to be regulated at all. They don’t.”
Robert Sachs, president of the National Cable Television Association, said the commission’s action established “a needed policy framework” for cable data services. “The classification of cable modem service as an information service and not a telecommunications service sends a strong signal that cable Internet services will be able to continue to develop in a business environment that favors competition over regulation and encourages new investment,” Sachs said.
