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What's in a name?

For cable-modem service, 'information service' means plenty 2/24/2002 07:00:00 PM Eastern

After years of uncertainty in the courts and Congress, the FCC is expected in the next few weeks to chart its course on regulation of cable Internet and other broadband services.

Although conventional wisdom has long held that the commissioners believe they have the power to force cable systems to offer unaffiliated Internet service providers, they won't exercise that controversial option.

That call comes from a proposal the FCC is expected to unveil at its meeting March 14. Industry sources say the agency plans to classify cable-modem service as an "information service," a move that would bring big relief to the industry because it would deny local franchise authorities and other municipal regulators the power to impose ISP-access conditions themselves.

Still, the classification would have some drawbacks in the form of new fees the industry would be obligated to collect.

The nomenclature of cable-modem service classification would seem a terribly arcane subject, but its ramifications go far beyond the already important access issue.

Depending on how the FCC decides to classify cable broadband, local systems could be forced to pay additional local franchise fees or pay into the federal universal-service fund used to deliver telephone service to rural and other high-cost areas and to wire schools and libraries to the Internet. The FCC's other choices for classification are "telecommunications," which would carry access requirements, or "cable service," which would permit local franchise fees for broadband.

Under the information-services classification, cable is most likely to be susceptible to a new universal-service obligation. (Cable systems offering telephony already pay into the universal-service fund.)

The cable industry is mounting a lobbying campaign to fend off any new fee, of course.

On the other side of the competitive divide, telephone monopolies, which compete with cable broadband for high-speed digital subscriber line business, would like to keep the threat of new fees so long as phone companies still have ISP- access obligations.

According to talking points prepared by the National Cable & Telecommunications Association, cable executives are urged to call on FCC commissioners to stand their ground against cable ISP-access obligations and to insist that local authorities get no power to overrule the FCC.

Regarding franchise fees, the cable industry will fight against paying a new levy on cable-modem service but indicates that it will not to seek refunds from the handful of local governments that have collected fees on the service so far.

The FCC's plan, one of four broadband proposals the agency will have under way soon, is meant to eliminate the regulatory uncertainty that has caused an endless stream of court fights and congressional hearings over the open-access rules and broadband deployment since 1998, when high-speed Internet service became available.

 

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