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Cable open access: What's next?

Now that the FCC has indicated that no new laws are needed to regulate broadband services, where does that leave Portland, Oregon, and its case against TCI?

Now that the Federal Communications Commission has indicated that broadband services are rolling out in a "reasonable and timely" fashion and that, for now, no additional laws are needed, where does that leave Portland, Oregon?

The city is involved in a lawsuit with AT&T and Tele-Communications Incorporated over its recent ruling that requires TCI to open its cable networks to competitors.

But with no immediate support from the FCC, Portland is stuck out on a limb as the only government body willing to force TCI to open its pipes. Many other cities have studied "open access" laws as part of their approval of the megamerger--but are unlikely to make any rulings on the matter.

The FCC, in a report released yesterday, said that the push for advanced data services--typically deployed via broadband networks--has been significantly stepped up since Congress passed the Telecommunications Act of 1996.

Internet service providers (ISPs), including America Online, MindSpring Enterprises, have leaned on federal regulators and local governments for weeks, hoping to deliver their services on cable operators' extensive networks.

AT&T and TCI have been under intense scrutiny since announcing their $48 billion merger, a deal which has prompted much of the open access debate. But the companies, as well as some financial analysts, argue that there's no incentive for AT&T and TCI to invest in and upgrade networks if competitors can just jump on for a ride.

"[Yesterday's decision] says the FCC is looking forward to companies making investments that would lead to competition and that for them to make a decision would only put a regulatory burden on investment," said AT&T spokeswoman Sarah Duisik.

Experts are characterizing the FCC's non-decision as a blow to Portland and ISPs.

"The FCC really did put off the issue," said Melissa Roover, regulatory analyst for The Yankee Group. "Portland will probably have to ease off on some of its regulations. I don't see how they can be a lone standout."

High hopes
The commission did not rule out revisiting the open access issue. In fact, FCC chairman William Kennard said open access is a "serious issue" and "one that I feel we should keep monitoring very closely."

"We don't see that the FCC has irrevocably decided not to review open access. We still regard this as a living issue," said David Olson, director of cable communications for the city of Portland. "We recognize it was not a positive blessing yesterday, but we don't think it was negative. Maybe we're just eternal optimists."

Although the FCC was not scheduled to make a ruling on proposed open access laws, some thought that the report could signal the commission's sentiment over the issue.

"I think some people had hoped that [the FCC] might have said more about open access in this report," said Melinda Mullet, director of communications regulatory affairs for Arthur Andersen, a major professional services firm.

Mullet is not surprised that the federal agency put off any decisive judgments about the controversial issue.

"Change tends to be very incremental in the regulatory community?I don't think it was surprising that they took a minimalist approach, especially since the White House is adamant about leaving the Internet unregulated," she said.

Lease the lines instead?
With the open access issue shelved for now, some expect local ISPs, if not their larger brethren, to try a different route.

Internet Ventures, which runs broadband ISP Perkinet, continues its push for "leased access" to cable wires.

The Perkinet service is similar to the cable modem services of @Home and Road Runner, although Perkinet uses telephone lines--not two-way cable--for data uploads.

Internet Ventures contends it has a right to lease a 6 MHz channel from local cable operators under an existing law. The company is hoping the law, intended to give independent video programmers an avenue for cable TV carriage within single local franchises, will get the ISP a foot in the door. The company believes its chances are better in leasing--rather than in open access laws--and has already applied for leased access in Spokane, Washington, Ventura, California, and Stockton, California.

"I can picture some of the local ISPs and ISP associations going for leased access," said Don Janke, president of Internet Ventures. "A local ISP could potentially be in a stronger position to invoke leased access than a national ISP."

Some experts agree other ISPs may soon jump on board.

"I think if anything we'll see some attention on Capitol Hill on that issue," Arthur Andersen's Mullet said. "The ISPs may push to perhaps get some clarification on the issue and how it relates to them."

Oregon officials also are watching Internet Venture's push for leased access closely.

"We think they have traction on that issue and we're glad they're going forward," said Portland's Olson. "It's just another reason for the FCC to open a discussion on this sooner rather than later."