Cable scores key victory on ISP competition

Mar 18, 2002  •  Post A Comment

In a victory for cable, the Federal Communications Commission last week defined cable’s broadband Internet service in a way that should preclude the industry from having to open its networks to competing access service providers.
Some consumer groups and local franchise authorities have been lobbying vigorously during the past couple of years for regulations that would force operators to give fair access to competing Internet service providers.
Representatives of consumer groups argue that access regulations are needed to prevent cable systems from discriminating against Internet access services they don’t own.
But in a 3-1 vote last week, the FCC’s GOP majority (with Michael Copps, the FCC’s sole Democrat, dissenting) held that it was bound by congressional mandates to define the service in a way agency critics say will preclude meaningful regulation.
“The commission is not permitted to look at the consequences of different definitions and then choose the label that comports with its preferred regulatory treatment,” said FCC Chairman Michael Powell. “The commission must apply the definition and then accept the regulatory regime that adheres to that classification and that which Congress chose.”
Mr. Copps said the ruling, while not absolutely precluding an access rule, suggests that the agency is unlikely to ever adopt one. “I do believe that some access requirement is necessary in order to ensure that consumers have choices of ISPs,” Mr. Copps said.
Watchdog groups vowed to appeal, contending that the decision gives cable operators too much power.
“Michael Powell’s FCC has struck a deadly blow to the future health of the Internet and has given a great victory to the cable industry lobby,” said Jeff Chester, executive director of the Center for Digital Democracy.
Rep. Edward Markey, D-Mass., blasted the FCC ruling as “wrong on the law and wrong on the policy.”
But a cable industry source said marketplace forces are already encouraging operators to offer customers a choice of access providers.
“Given the vigorous competition between cable modem, digital subscriber line and satellite-delivered broadband Internet services, a policy of regulatory restraint is particularly appropriate,” said Robert Sachs, president and CEO of the National Cable & Telecommunications Association.
Industry critics, however, insist that without access rules, cable will be in the driver’s seat in determining who gets to sell high-speed access services to its customers and will even be in a position to dictate what the Internet service providers sell. “In the absence of access requirements, network owners can run a price squeeze that stifles innovation on the Internet,” said Mark Cooper, research director of the Consumer Federation of America.
Also last week, the FCC launched a related rulemaking to determine, among other things, whether, “in light of marketplace developments, it is necessary or appropriate at this time” to require systems to offer at least some competing Internet access services on their networks.