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ISPs Put Heat on FCC to Compel Access

Washington-Cable competitors are stepping up pressure on the government to force cable operators to open their Internet facilities following last month's court decision nominally won by AT & T Corp. against Portland, Ore.

The case has spawned several interpretations, but so far, only cable competitors have exploited it to urge the Federal Communications Commission to step in and decide some key issues, such as the rights of competing Internet-service providers to interconnect at nondiscriminatory rates.

The cable industry, in contrast, has not asked the FCC to issue an order that would allow MSOs to continue to deploy cable Internet facilities with the knowledge that ISP competitors may gain access as a result of business negotiations, rather than government fiat.

Last week, the Competitive Telecommunications Association (CompTel) sent FCC chairman William Kennard a letter praising his June 30 decision that the agency would develop a framework for addressing cable-access issues.

Kennard moved after the U.S. Court of Appeals for the Ninth Circuit, in the Portland case, held last month that AT & T's Excite@Home Corp. service was an information service in terms of actual content, but a telecommunications service in terms of content transmission.

"In light of the.Portland case that the cable platform used to provide Internet access is a telecommunications service, the FCC now has the legal authority to require that cable-broadband providers offer multiple Internet-service providers.access to their facilities," CompTel president H. Russell Frisby Jr. wrote in a one-page letter to Kennard.

Frisby went on to say that competitive fairness required the FCC to end its policy of monitoring cable-access issues with a light hand and to mandate that ISPs have equal access to the Excite@Home platform.

"CompTel believes the most effective means to ensure that cable-TV consumers have competitive choices among ISPs is for the FCC to establish a national policy that ensures nondiscriminatory access by ISPs to these cable facilities," said Frisby, a former chairman of the Maryland Public Service Commission.

CompTel represents some of the biggest long-distance and competitive local-exchange carriers, including MCI WorldCom Inc., Cable & Wireless Communications plc, RCN Corp. and McLeodUSA. AT & T is a non-voting CompTel member.

The CompTel letter landed at the FCC three days after Kennard received a formal request that he apply common-carrier regulation to cable broadband Internet service, mirroring rules that apply to local phone companies.

The filing was made by the U.S. Internet Industry Association, which said that because broadband cable access was classified a telecommunications service by the court, cable operators had a duty under federal law to allow other telecommunications carriers to interconnect with their facilities.

The USIAA said the FCC's policy of forbearing from regulating cable Internet access was legally untenable and damaging to ISPs that need to compete in broadband if they don't want to see their businesses wither on the vine.

"The FCC's failure to act and its continuing efforts to postpone considerations of these issues will result in substantial and irreparable harm to the Internet industry and to consumers," USIIA chairman Dennis C. Hayes said.

National Cable Television Association spokesman David Beckwith said CompTel and the USIIA were redundant in light of Kennard's prior commitment to explore cable-access issues.

"The FCC has already said it would look into these matters, and these filings don't add anything to the debate," Beckwith added.

In the Portland case, AT & T argued that Excite@Home was a cable service, which the law exempts from common-carrier regulation. By requiring non-discriminatory access, Portland imposed common-carrier regulation in violation of the exemption, AT & T argued.

The court did not agree that Excite@Home was a cable service, claiming that the definition of cable service as the one-way transmission of video programming to subscribers did not fit with the Internet's abundant two-way features.

But the court sided with AT & T in ruling that Portland's requirement of nondiscriminatory access to ISPs forced AT & T to offer a telecommunications service. The court said local governments do not have that authority, and it voided the city's law.

By saying that Excite@Home was in part a telecommunications service, the court opened the door for opportunistic cable competitors to call on the FCC to impose open access on the basis that telecommunications carriers that offer telecommunications services have a duty to interconnect with competitors and treat them in a nondiscriminatory fashion.

In response, the cable industry has said that reading an open-access mandate in the court's decision was erroneous. Interconnection, the industry argued, meant the exchange of traffic, including e-mail, and that is going on today on the Internet.

In terms of nondiscrimination, the cable industry has said that it cannot be forced to provide a transmission path to competing ISPs because cable operators do not offer that service as a product, although they someday might.

When he announced the FCC's probe of cable access, Kennard said the court's decision did not mean that competing ISPs automatically had access to cable facilities.

Citing the decision, Kennard said the commission has the authority to exempt cable from such regulation on the basis that open access could be better achieved through the marketplace than through regulation.

"My preference is market forces, but if the market doesn't work, then we'll have to step in," Kennard said in a prepared statement.

On that score, both AT & T and America Online Inc. (after buying Time Warner Inc.) have promised open access after their exclusive agreements with Excite@Home and Road Runner expire in June 2002 and December 2001, respectively.