The courts and, probably, Congress are the next stops for a controversial FCC decision last week shielding cable broadband services from Internet-access obligations and nearly all local regulation.
After conducting an 18-month inquiry, the FCC declared that local governments cannot force cable companies to carry competing ISPs, nor will the commission exercise its right to impose that obligation any time soon. Its rationale is that, by discouraging investment, mandatory access would impede the roll-out of broadband services.
The 3-1 decision was an expected but nevertheless critical victory for the cable industry.
"The FCC has established a needed national policy for cable Internet services," said Robert Sachs, president of the National Cable & Telecommunications Association. "This sends a strong signal that cable Internet service will develop in an environment that promotes competition rather than regulation and encourages new investment."
Proponents of open-access requirements, however, accused the FCC of handing the cable industry control of the Internet.
"This will make the cable MSO the god of your computer screen," said Harold Feld, associate director of Media Access Project, which will take the FCC to court over the decision. Other critics of the FCC's plan say there have been so many conflicting court rulings over access that Congress may have to step in.
Feld predicted a world in which cable companies block video streaming, travel reservation services and other Web businesses that don't pay to have their services carried.
Democratic Commissioner Michael Copps read a scathing dissent that shattered the collegiality usually accompanying FCC meetings. He accused his GOP colleagues of straying "far afield" from congressional intent with ostensibly tentative rulings that will be all but impossible to repeal later.
Agency Chairman Michael Powell, who refused to look Copps's way as the dissent was voiced, said the increasing availability of broadband over competing cable, telephone and satellite platforms will eventually make today's debate seem "quaint and unimportant." He added that the FCC "must faithfully apply a statutory definition based on the nature of the service" and not on anybody's "preferred regulatory consequences."
Specifically, the commission ruled that cable modem service is an "information service," which places nearly all oversight of the business with the FCC and very little with local regulators. The decision does give the FCC authority to impose access obligations later if it sees fit, but the panel decided to continue its hands-off policy.
Other options would have been to label cable broadband offerings a "cable service," which would have ruled out the threat of future FCC access rules. Public advocates insist that cable broadband is a "telecommunications service" bound by the same access obligations as telephone digital subscriber lines.
The regional telephone monopolies praised the ruling as an indication that the FCC, in a rulemaking launched last month, will absolve them of current DSL access requirements.
The commissioners also tentatively concluded that local cable regulators may not impose franchise fees on cable modem service, nor impose higher rights-of-way fees when operators add broadband service over their existing lines.
"We are very unhappy about this. They are carrying water for the cable industry," said David Olson, director of Portland, Ore.'s, cable franchise authority, which two years ago persuaded a federal appeals court in San Francisco to uphold open-access rules in 11 western states.