Cable operators tend to offer their high-speed Internet customers only one ISP, the one affiliated with the cable company. Open-access advocates want consumers to have a choice and are calling on the federal government to force cable operators to allow other ISPs to operate on their networks. This is considered critical in areas where cable may be the only high-speed Internet option.
FCC Chairman William Kennard has resisted holding this inquiry for two years, citing "vigilant restraint." The commission is only conducting it because of conflicting court decisions. But there is no guarantee that an FCC inquiry will lead to a process for drafting new regulations. And given that it seems increasingly likely Texas Gov. George W. Bush will be the next president, 2001 could see a new FCC with a new chairman and senior staff.
Bush campaigned on a platform of deregulation and market forces in the new economy, exactly the arguments being made by open-access opponents, which wouldn't bode well for those who hope this inquiry is the first step toward opening up cable networks.
"Any further delay in establishing and enforcing a national open-access policy will deprive consumers in this fast-moving market of the basic choice of services and content that are the hallmark of today's Internet," wrote Kristan Van Hook, co-director of the OpenNet coalition, a group of nearly 1,000 ISPs and related companies.
OpenNet favors a ruling by the U.S. Court of Appeals for the Ninth Circuit this June that ruled cable Internet service should not be regulated as a cable service but as a telecom service, which would force cable operators to unbundle their networks much as a Baby Bell has to.
But the National Cable Television Association (NCTA) in its report said, "Under no circumstances is (cable modem service) a telecommunications service."
NCTA argued that under the law, a telecommunications service offered the public a transport, such as carrying a phone call. Cable companies, by contrast, enter private carriage agreements with ISPs for cable modem service, NCTA said.
Claiming the First Amendment
Both sides insist that regardless of what current regulatory law says, the FCC should be guided by the First Amendment. The two sides just happen to have starkly opposite interpretations of what that amendment says.
A U.S. district court in Miami last month ruled that imposing access requirements on a cable company violates that cable operator's First Amendment rights, and the NCTA backs that position.
But a coalition of consumer groups--Consumers Union, Consumer Federation of America, Center for Media Education, and Media Access Project--in a joint filing said that it is the cable companies that are in the position to violate the First Amendment rights of consumers by restricting choice in high-speed providers and through technology that can favor the transmission of one provider's content over that of another.
This argument has popped up in the America Online-Time Warner merger debate, for example, because AOL could in theory direct consumers to Time Warner's Cartoon Network Web site over Disney.com.
"Essential to the value of the Internet is the ability of citizens to speak to one another, to be publishers and broadcasters as well as readers and listeners," the consumer groups said.
Market vs. regulation
Cable operators told the FCC that they don't have the power to disrupt the ability of anyone to speak to one another, because providers of alternative broadband connections are gaining market share daily.
"The wisdom of the FCC's deregulatory policy is evident by the steady growth in cable modem subscribers and the aggressive deployment of competing broadband services such as DSL," said AT&T general counsel Jim Cicconi in comments filed with the commission. AT&T is the largest cable operator in the United States.
Cicconi noted that in Canada, where open access has been the law for four years, the country "continues to be mired in complicated proceedings" and is no closer than the United States in connecting multiple ISPs to a cable network.
AT&T is gearing up for a multiple ISP trial in Boulder, Colo. "Our Boulder trial, under marketplace conditions, is far more likely than cumbersome and generic regulations to promote a wide range of customer choice," Cicconi said.
"It would have been extremely unfortunate if the technological and procedural aspects of this trial were predetermined by a regulated 'one size fits all' cable access arrangement," he said.
The consumer coalition, however, argued that the market is not one of equal partners, but rather one where ISPs are at the mercy of cable operators. OpenNet argued that is particularly true for small ISPs. As for the voluntary agreements that ISPs such as Earthlink and Juno have been forming recently with cable operators, the consumer groups said such pacts "are insufficient" and lack enforceable rights.
"The unaffiliated ISPs party to these agreements are unlikely to be able to compete vigorously for customers against the cable-affiliated ISPs" such as Excite@Home and Road Runner, the consumer groups wrote.