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Open access is a shut case

The cable industry says the law is on its side as the FCC considers whether operators must allow Internet service providers to offer high-powered services over cable's high-capacity networks.

So-called "open," or "forced," access has been debated and passed over in legislatures in nearly half the states in the Union, and has been given the thumbs down in three federal courts, NCTA attorneys say. Because of this widespread rejection of the notion that the industry needs new rules to follow, the cable industry should be left on its own to negotiate access deals in the marketplace, the lawyers say.

Moreover, the market is embracing open access on its own, says NCTA President Robert Sachs. AT&T is conducting a test in Boulder, Colo., allowing eight ISPs to offer services on its cable system there. MSO Comcast has announced a similar test. AOL Time Warner this month signed a contract to carry ISP EarthLink. And both AOL Time Warner and AT&T have signed "memorandums of understanding" (MOU) saying that they have every intention of opening their networks up for ISPs' use.

Regulators aren't ignoring the progress, but the MOUs, while frequently waved around as proof of cable's efforts, have done little to assuage regulators' concerns. And Federal Trade Commission officials don't seem as impressed with AOL Time Warner's EarthLink deal as the mega-entertainment company had hoped.

The FTC still is considering the conditions it will levy on the merger between AOL and Time Warner, at least some of which are expected to be open-access provisions. The FCC also has opened a notice of inquiry on open access, which leaves open the door to federal regulation. That means the cable industry faces at least the possibility of open-access requirements, which it wants to avoid at all costs.

The FCC's proceeding will determine how regulators define cable-modem service. The Ninth Circuit Court of Appeals in San Francisco has ruled that cable-modem service is not a telecommunications service, which means cable operators are not required to open their networks as telephone-service providers are. But that court left the final decision to the FCC, which responded by launching an inquiry.

"Cable-modem service is a cable service, or at most an information service," NCTA says. "Under no circumstances, is it a telecommunications service.

"Under the Communications Act, a 'telecommunications service' is the offering of transport to the public for a fee. Cable operators do not offer pure transport capability for a fee to any member of the public, and thus cable-modem service does not fall within the statutory definition."

NCTA Senior Vice President Dan Brenner says competition will solve the problem. "There is fierce competition in the narrowband market. The broadband market is growing nicely now. With this kind of competition, you wouldn't want the government to take the viewpoint that it did [previously], using the old model of AT&T as the monopoly telecommunications provider."

Even though the FCC has opened an inquiry, Cable Services Bureau Chief Deborah Lathen would prefer to leave the matter to the market. "I believe the companies are going to see that it is to their benefit to have open systems," she said during a panel at the Western Show. "But I'm an incredible optimist."

The first round of comments in FCC's inquiry were due Friday. AT&T in its filing credited the FCC's "hands-off" policy for fueling the industry's deployment. By keeping cable free of access obligations, the industry has been better able to apply the competitive pressure that forced telephone companies to accelerate their rollout of competing DSL services.