The Federal Communications Commission is considering redefining broadband access as an information service, regardless of whether it is provided by a telephone company, a cable company or any other vendor.
But what sounds like a lot of regulatory minutiae comes down to one main issue: Who will offer low-cost broadband services in the future if telephone companies no longer have to give rival carriers access to local networks?
Information services are not subject to the panoply of federal regulations regarding interconnection, resale and network access—as well as public safety and law enforcement rules—that telecommunications services are subject to. Today, broadband access sold by a cable company is deemed an information service, but broadband access sold by a phone company is deemed a telecom service.
"Government policy is unfair. Its wrong; its outdated," Thomas Tauke, senior vice president for government relations at Verizon Communications Inc., in Washington, said to lawmakers last week. "Were regulated to beat the band. This isnt right."
For residential broadband users, the question of deregulating the telcos broadband services perhaps isnt grave. Cable is available to most homes in the United States, guaranteeing at least two broadband pipes into most residences.
For enterprises that rely on low-cost broadband, however, the situation is different. While the major cable companies have talked about hooking into the business world, most enterprises cannot buy broadband from them today. In addition, cable connectivity typically does not provide the upstream capacity businesses need.
Generally, businesses have a choice of low-cost broadband access from the telephone company or CLECs (Competitive Local Exchange Carriers), which usually rely on the telcos for last-mile connections to customers. According to Thomas Jones, a partner with the law firm of Wilkie, Farr & Gallagher, which represents Allegiance Telecom Inc., Time Warner Telecom Inc. and other CLECs, eliminating the telcos obligation to rent local loops to competitors would likely destroy competition in the business broadband market.
ISPs are also concerned about the potential definitional change. David Baker, vice president of law and public policy at EarthLink Inc., in Atlanta, told Congress last week that the FCC is "tilting the playing field in favor of incumbent providers."
The telcos have many allies in Congress in both parties working to relieve them of regulatory burdens.