With ink barely dry on FCC’s ruling that Internet service delivered over cable was “information service,” coalition of consumer groups filed suit challenging agency’s decision. Media Access Project (MAP), representing Consumer Federation of America, Consumers Union and Center for Digital Democracy, didn’t reveal substance of its arguments in one- page filing to U.S. Appeals Court, D.C., saying only that ruling was “arbitrary, capricious, an abuse of discretion, contrary to statutory authority, and otherwise not in accordance with law.” MAP Pres. Andrew Schwartzman said FCC’s ruling violated public’s First Amendment rights to engage in uncensored “social, artistic and political discourse, as well as to receive information.” Specifically, groups objected to FCC’s determination, saying it freed cable operators delivering Internet services from any “open access” requirements, which would give subscribers choice among multiple ISPs. Schwartzman said FCC should have called product telecom service, which would have made it subject to common carrier regulation. Common carriers providing DSL must offer multiple ISPs under current govt. rules.
ORLANDO -- FCC and NTIA officials at CTIA Wireless 2002 show here Sun. cautioned that tough spectrum policy choices lay ahead in light of new homeland security considerations, including re-evaluation of how well current priority access service (PAS) rules are working. Panelists on homeland security roundtable repeatedly stressed importance of making sure public safety community had adequate spectrum and that existing allocations were being used efficiently. Several officials also pointed to complicated govt. jurisdictional issues raised by factors such as PAS, particularly as some states contemplate legislation on their own version of wireless priority access. While Administration hasn’t formulated stance on what should be done with priority access service, “the concern that we would [do so] is against classification of network where you could have displacement of emergency calls from individuals because of priority access calls coming from government,” said NTIA Deputy Asst. Dir. Michael Gallagher.
FCC declared Thurs. that cable modem service interstate was “information service” and said Internet delivered over cable wasn’t subject to common carrier regulation that required unbundling or -- in cable parlance -- “open” or “forced” access. Ruling marked critical turn for cable, which has become country’s No. 1 provider of high-speed Internet access and feared that it would become subject to access requirements and vulnerable to new fees and taxes imposed by states and municipalities. In addition to declaratory ruling, which was passed in 3-1 vote, Commission issued Notice of Proposed Rulemaking (NPRM) to measure regulatory treatment of cable modem service against that of DSL. FCC last month made tentative conclusion that wireline- delivered broadband, too, was information service (CD Feb 15 p1). NPRM will examine which govt. agencies, if any -- FCC, state or local franchising authorities (LFAs) -- have power to regulate cable modem service and invited comment on whether, “in light of marketplace developments, it is necessary or appropriate at this time” to require multiple ISP access. Marjorie Green, assoc. chief of Cable Bureau, said in her presentation that some cable companies had begun offering multiple ISPs to customers on their own.
If FCC were to define cable modem service as information service without providing guidelines for local regulation, local franchising authorities (LFAs) would prefer to maintain regulatory status quo until issues were resolved, said Libby Beaty, exec. dir. of National Assn. of Telecom Officers & Advisors (NATOA). Addressing Cable TV Public Affairs Assn. forum in Washington Tues., she said no LFA would be anxious to set up new regulatory regime, only to have it changed later when FCC provided guidelines. As result of different court interpretations of classification of cable modem, some operators now pay franchise fees and some don’t, she said, and LFAs would like cable operators to opt for status quo until FCC comes out with guidelines. Calling assurances of LFA preference for status quo refreshing, Billy Ferry, Charter regional dir.-govt. relations, predicted LFAs would move to change regulations if they saw new revenue source. Asked whether FCC would require LFAs now collecting franchise fees for cable modem to refund fees if it deemed it information service, Beaty said FCC didn’t have retroactive rulemaking authority. LFA contention was that franchise fee was rent for use of public rights-of-way, she said. On refund issue, Ferry said he saw potential for class action lawsuits because of disparate treatment of operators paying franchise fees for cable modem in some localities, while others were free from fees. Local govts. had feared such suits in aftermath of 9th U.S. Appeals Court, San Francisco, ruling that cable modem was telecom service, Beaty said, but none materialized. Panelists agreed it was unlikely that cable regulation would move to state from local level in near future, although cable would like to see some uniformity in regulations.
Assuming FCC will declare Thurs. how cable modem service should be classified, Commission also is poised to adopt Notice of Proposed Rulemaking (NPRM) examining who has jurisdiction to regulate service. Question is important because, if FCC classifies cable modem service as “information service,” as is widely expected, cable operators could be vulnerable to additional demands from local franchising authorities (LFAs) for new taxes, fees, etc., Cable Bureau Chief Kenneth Ferree, who soon will head up new Media Bureau, said in interview Mon. He said NPRM would take “granular” look at implications of particular classification, whether it be as “information service,” “telecom service,” “cable service” or some other animal. He declined to say which it would be, but gave some insight into NPRM that’s expected at FCC’s agenda meeting: “The second step is, well, what does that [classification] mean? What are the implications?” Specifically, NPRM will seek to determine who has jurisdiction and what role FCC and LFAs will have in overseeing cable modem service. Ferree said he would like to see issue resolved before end of 2002.
FCC at agenda meeting March 14 will address cable operators’ concerns about regulatory classification of Internet delivered over cable. Commission said Thurs. it would consider declaratory ruling and Notice of Proposed Rulemaking (NPRM) on legal classification and appropriate regulatory framework for Internet service when delivered over cable. At moment, that’s considered “cable service.” In fact, Supreme Court, in case on pole attachments earlier this year, dealt with issue and some justices expressed dismay that Commission had not yet classified service (CD Jan 17 p1). Industry insiders believe Commission is likely to reclassify it as “information service,” which would protect it from being called “telecom service” and all common carrier regulations that would naturally follow. Cable executives have been lobbying FCC intensively on almost daily basis in recent weeks in hope that if it chose to call it “information service,” agency would ensure that local franchising authorities (LFAs) would have no regulatory jurisdiction over high-speed data. Item had been widely expected by cable industry, especially since Commission opened proceeding addressing Internet via wireline at its last agenda meeting. Meeting is scheduled for 9:30 a.m., Rm. TW-C305, FCC hq. Commission also will consider: (1) Order on streamlined procedures for transfer of control applications by domestic telecom carriers. (2) Order and rulemaking dealing with charges for changing end users’ presubscribed interexchange carriers. (3) Notice of Proposed Rulemaking seeking comments on how to address interference to public safety systems in 800 MHz band. Last fall, Nextel submitted White Paper to Commission that proposed reconfiguration of operations at 700 MHz, 800 MHz, 900 MHz and 2.1 GHz to mitigate interference that public safety licensees were receiving from wireless operators such as Nextel. Proposal has been expected to seek comments on wider range of potential solutions than the one put forward by Nextel. (4) Further action on new Multichannel Video Distribution and Data Service (MVDDS) in 12.2-12.7 GHz band. Meanwhile, FCC originally planned, then postponed, consideration of proposed amendment of Parts 2 and 25 of Commission rules to permit frequency sharing between nongeostationary orbit fixed satellite systems with GSO and terrestrial systems in Ku-band frequency. It also delayed review order that allows terrestrial companies to use DBS satellite spectrum in 12.2-12.7 GHz band that included applications of Northpoint, PDC Broadband and Satellite Services.
EarthLink urged FCC late Fri. to maintain regulatory restraints on ILEC broadband services because unaffiliated ISPs were dependent upon those services and ILECs had enough market power to make it hard for ISPs to obtain them. Commenting on FCC proposed rulemaking (CC 01-337) that could ease ILECs’ classification as “dominant” for some services, EarthLink said “the regulations under consideration here… will determine whether the incumbent LECs can stop thousands of other ISPs from also investing in and delivering… broadband applications that consumers may demand.” Company said it didn’t believe Sec. 10 of Telecom Act permitted FCC to forbear from regulating ILEC advanced services, especially those sold on wholesale basis to ISPs. “The Commission should carefully analyze the wholesale DSL market that exists today where the incumbent ILECs maintain significant market control,” EarthLink said: “Faced with a dominant carrier, the appropriate regulatory response should be to require tariffing and tariff review, to demand cost justification of rates and to scrutinize for anticompetitive activities. Without this, incumbent LECs have every incentive and ability to stall and foreclose intramodal competition among ISPs, leaving consumers without Internet service choices.” Expressing similar concerns about ILEC dominance, ALTS said FCC “should not declare the ILECs nondominant in the retail broadband market while they continue to possess market power in the wholesale market.” ALTS said ILECs “have the incentive and the means to use their market power in the wholesale market to negatively affect the retail market, and this should be a prime concern for the Commission.” SBC, which had filed petition seeking nondominant treatment along lines proposed by FCC, said Commission “should take decisive action to remove dominant carrier regulation… that is both unnecessary and harmful to competition and broadband deployment.” SBC said ILECs should be declared nondominant when they provide broadband services to mass market customers, for example high-speed Internet access, as well as services “that enable larger business customers to transmit and route packetized data.” SBC said those markets were “intensively competitive” and ILECs posed “no threat to exercise or acquire market power” in them. In providing high-speed Internet access, ILECs compete against facilities- based cable modem, satellite and wireless providers. Situation is similar for provision of broadband services to larger business customers, SBC said: “Ever since packet- switched services were introduced in the early 1990s, the Commission has recognized that the market in highly competitive and that the incumbent LECs were new entrants in the market.”
Capitol Hill was awash with lobbyists Mon. as supporters and opponents of data deregulation Tauzin-Dingell (HR-1542) bill prepared for House floor debate beginning Wed. Along with visits to House members and staff, advocacy groups flooded Hill with letters and released still more reports arguing why bill would either boost competition in broadband or cripple it. Despite flurry of lobbying, most observers viewed bill’s passage in House as foregone conclusion, in part because wavering members felt safe in voting for it knowing that Senate Commerce Committee Chmn. Hollings (D- S.C.) had no intention of letting it advance in Senate. At NAB conference Mon., bill’s chief sponsor, House Commerce Committee Chmn. Tauzin (R-La.), predicted victory in House, “then a fight in the Senate, as you know” (see separate story).
It’s “tremendously urgent” that Commission appeal U.S. Appeals Court, D.C., decision Tues. that overturned FCC’s cable-TV station ownership rules and remanded national TV station ownership cap (CD Feb 20 p1), FCC Comr. Copps told reporters Thurs. at his monthly press breakfast. He said he was concerned that court ruling could add major administrative burden because it appeared to change way FCC conducted biennial reviews of regulations as required by Telecom Act. Comrs. Martin and Abernathy and Chmn. Powell have expressed similar concern (CD Feb 21 p1) but Copps is only one so far to call for appeal to U.S. Supreme Court. “If we have to go through this kind of rulemaking every 2 years, it will add an administrative burden that will be impossible for the Commission to discharge,” he said: “This is a decision that cries out for Supreme Court review.”
Requiring broadcasters to air public service announcements (PSAs) would raise First Amendment problems, FCC Comrs. Abernathy and Martin told Kaiser Family Foundation seminar in Washington Thurs. Comr. Copps didn’t disagree, but said if broadcasters and cable didn’t improve their efforts to serve public interest, “there’s going to be a reaction,” without explaining what he meant. On public interest requirement for cable, Abernathy said: “I don’t see the government stepping in.”