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Canadian ruling may fuel U.S. open access fight

A Canadian regulatory ruling gives Internet service providers north of the border something ISPs in the United States badly want: access to cable TV wires.

A Canadian regulatory ruling has given Internet service providers north of the border something their U.S. counterparts badly want: access to cable TV wires.

The Canadian Radio-television and Telecommunications Commission yesterday decided to require cable operators, such as Rogers Cablesystems and Shaw Communications, to sell discounted access to their cable-based high-speed Internet networks to competing Internet service providers (ISPs) within 90 days.

The commission's decision High speed pipe dreams? opens the door for third-party ISPs to resell cable Internet access to their own customers, something U.S.-based ISPs such as America Online, MindSpring Enterprises, and groups like the OpenNet Coalition are lobbying for in the United States.

Many ISPs are lobbying local and federal officials for new regulations over cable access. Yet the cable industry has fought the open access movement, saying that there would be no incentive to upgrade the costly networks if they are forced to share them with competitors. Cable executives would prefer business-to-business agreements, rather than regulatory interference.

Now the Canadian decision is likely to give domestic ISPs and their representatives new fuel for their open access fight. To date, ISPs have successfully persuaded local governments in Oregon and Florida to require open access regulations, but have failed so far with federal regulators.

"Certainly if Canada goes smoothly--or if it's a nightmare--it will provide ammunition for either side of the debate," said Michael Harris, president of Kinetic Strategies, a broadband market research firm.

Indeed, ISPs believe the ruling will bolster their cause in the United States, and is further proof that cable open access is technically feasible--something that has been called into question by the cable industry in the past.

'This certainly raises the pressure on U.S. policy makers to give U.S. citizens the same choice," said Greg Simon, director of the OpenNet Coalition, an ISP group seeking equal access to cable wires.

But Harris doubts the Canadian ruling will have much impact domestically.

"If you follow that rationale, we should all have state-sponsored health care like they have in Canada. It's a far different regulatory and governmental environment there," he said.

The Federal Communications Commission has clearly indicated it prefers competition between different technologies as opposed to forcing access to cable or DSL networks. "I don't think the Canadian decision is going to affect [the FCC's] decision," Harris said.

"I don't think this will affect the case in the U.S. The FCC has been very consistent," said Matt Wolfrom, a spokesman for Excite@Home, the nation's largest cable modem service.

The controversial issue, according to industry observers, has been considered in Canada since at least 1996, underscoring the difficulties of reaching agreement on new regulations.

"Mandating access and making it work are two different things," Wolfrom said. "It's a very complex and difficult thing to get done."

Likewise, the debate over cable access already has been a long and contentious one in the United States. Oregon officials first required what is now AT&T's cable TV unit to open its network to other ISPs last November, touching off a nationwide debate and a lawsuit that is now in a federal appellate court.

Despite the 90-day deadline, observers expect the process to move slowly in Canada.

"You're probably going to see stonewalling for sure," Harris said of Canadian cable operators. "They're going to go kicking and screaming into this."

As an incentive, the Canadian ruling requires cable companies to offer access at a discounted rate of 25 percent below their lowest retail price until competing ISPs are able to connect their networks with those of the cable carriers.

"If [Canadian cable operators] had opened their networks instead of playing games, they probably could have had market-negotiated rates instead of having the government set a discount rate," OpenNet's Simon said.

"There's a clear message here for the U.S. cable industry: If you do the right thing sooner rather than later, then it's better for everybody."