FCC Vote Could Limit Cable Net Regulation

Federal regulators on Thursday voted to classify cable modem service in a way that could substantially limit its regulation by government.

Federal regulators on Thursday voted to classify cable modem service in a way that could substantially limit its regulation by government.

In a 3-1 vote, the Federal Communications Commission declared that cable modem service is an "information service" rather than a "cable service" or "telecommunication service" for the purposes of federal law. The decision is a first step in establishing rules covering cable modem service, and the Commission is seeking additional comment from interested parties as it goes forward.

In practical terms the decision could mean that the cable modem service providers may not be subject to "open access" requirements that force telecommunications companies to share their lines and equipment with competitors.

Additionally, Thursdays decision could prevent local government from charging a fee for the cable-modem services, similar to the tariffs imposed on video broadcast services by cable companies.

The FCCs cable modem decision follows on another decision earlier this year by the FCC to tentatively classify DSL (digital subscriber line) service also as an information service.

Both decisions have been defended by Commissioners Michael K. Powell and Commissioner Kathleen Abernathy as efforts to clear up regulatory uncertainty and promote the deployment of broadband services.

"I commend the Cable Services Bureau and my fellow commissioners for developing an analytical framework that not only represents the best reading of the Act but also serves important public policy objectives," said Commissioner Abernathy in a prepared statement after Thursdays vote. "Classifying cable modem service as an information service will promote our goal of fostering a minimal regulatory environment that promotes investment and innovation in a competitive market. It also provides the opportunity to create a more consistent regulatory framework across technological platforms."

Telecommunications providers, ISPs and some public policy groups supportive of the FCCs laissez-faire regulatory approach also argue that open-access requirements create economic disincentives to build and maintain broadband infrastructure.

FCC Commissioner Michael J. Copps, who was the lone dissenter in both broadband decisions, has charged, however, that the FCC is overstepping its bounds by setting competition policy, which, he argues, was reserved by Congress when it passed the Telecommunications Act of 1996. He and some consumer advocacy groups have argued eliminating open-access rules could reduce competition and raise prices.

Internet service providers with an interest in expanding their reach using other companies infrastructure are also critical of the decision. In a statement following the FCCs decision, Earthlink, Inc. vice president for law and public policy Dave Baker blasted the FCCs decision as "bad law and bad policy."

"We share the FCCs desire to encourage broadband deployment," said Baker. "EarthLink is one of the nations leading broadband ISPs. But broadband is already deployed to 85 percent of American homes. The challenge is not just providing more broadband connections, but giving consumers meaningful choices in their broadband providers over those connections. Encouraging broadband deployment does not mean sacrificing consumer choice. Unfortunately, todays FCC decision does just that."

Commissioner Abernathy noted in her prepared remarks that several major ISPs, such as AOL Time Warner, AT&T Broadband and Comcast have committed to offering a choice of ISPs on their broadband cable lines. However, she expressed concern "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. As the owners of the nation most extensive broadband architecture and as the leading providers of broadband service, cable operators have the potential to suppress competition. I believe that the Commission should not yet dismiss proposals to impose some kind of access requirement without better evidence that robust competition among broadband ISPs will develop on its own," she said.