Depending on who is asked, a new court ruling may oblige federal regulators to order carriage of unaffiliated Internet providers over cable companies' broadband networks. Supporters of government open-access rules are hot to test the new waters.
Texas and New York are likely to be among the next battlegrounds in the open-access fight, after a consumer group last week asked the FCC to put cable-modem service in those states under the same open-access obligations faced by telephone companies that provide high-speed digital subscriber lines. A two-year-old fight in Oregon also will continue after a Portland Internet service provider asked AT & T for interconnection with the telecom giant's cable network.
"Not one blade of grass is going to grow before people start asking for access," said Mark Cooper, research director, Consumer Federation of America.
Seeing no reason to wait for a deluge of open-access requests, FCC Chairman William Kennard last week said the agency will launch a formal review of the court decision's impact. "It is clear to me that the FCC will have to address the issues raised by the court," he said.
Open-access proponents concede it's no cinch that the FCC will impose an open-access policy, because the agency has the right to "forbear" or reject the need for regulation. But they predict it will be much tougher for the commission to justify formal forbearance than the current wait-and-see approach.
"The FCC's current policy violates the court's decision that cable broadband and DSL be treated the same," Cooper said. "In Texas, DSL is open and cable is not. How can an FCC attorney stand before a judge and justify that?"
As for the FCC, Kennard still says he doesn't want to set rules while the broadband market is in an infant stage and strongly indicated that he's willing to use the agency's forbearance authority.
On its face, the June 22 decision by the federal appeals court in San Francisco was a victory for the cable industry, because it blocks municipal governments from imposing open-access rules and lays that duty in the lap of federal-and possibly state-regulators. Specifically, the ruling struck down open-access conditions Portland officials imposed on AT & T's acquisition of the local Tele-Communications Inc. franchise in 1998.
The cable industry wants open access to be the domain of federal regulators because the FCC has refused to impose access rules. Even if states are found to have authority, however, that's still a partial victory for the industry because no legislature has been willing to pass open-access legislation.
But open-access proponents are taking heart because the three-judge panel in San Francisco also decided that cable-modem service is a "telecommunications service" under the jurisdiction of the FCC.
That means the agency must ditch its "hands off for now" policy, they say, and, once and for all, rule on the need for open-access conditions-at least in markets where federal regulators have ruled that incumbent telephone companies have opened local networks and high-speed digital subscriber lines to competition.
(On June 13, the Justice Dept. ruled that SBC had opened the Texas market to competition. The FCC has indicated that Bell Atlantic had done the same in New York.)
"We believe that the FCC must establish broad principles for open access that apply to all advanced service providers," Cooper wrote in a June 27 letter to Kennard. "But in these markets, where DSL service has been irreversibly opened, the need for action is especially urgent."
Whatever the eventual impact of the court's ruling, the decision is binding only in Oregon, California and the other seven states of the U.S. 9th Circuit. In the rest of the country, the decision serves only as guidance.
Internet Partners Inc., an ISP in Portland, last week decided to test the open-access side's interpretation by asking for the right to connect with AT & T's cable network. Consumer groups undoubtedly will also use the court's decision as another reason to demand that the FCC impose open-access conditions on America Online's acquisition of Time Warner.
Although AT & T officials deny they face any obligations to connect, Internet Partners is hoping to keep its request a private business negotiation rather than appealing to the federal government. "It could be that some groups out there are determined to drag this issue into FCC," said Ted Mittlestaedt, systems administrator for Internet Partners. "We are only determined to connect with AT & T."
Cable industry officials say CFA is reading too much into the court decision, which clearly barred local regulators from imposing open-access rules but gave the FCC wide discretion.
The FCC is under no obligation to decide at this point because that duty would apply only if cable operators sold access to their broadband network as a stand-alone product, said Daniel Brenner, general counsel for the National Cable Television Association.
"Neither AT & T nor any other cable operators yet offer that as a service," he said. "You cannot have a regulatory regime for a service nobody offers."
If the FCC finds no action is necessary, Cooper said, the open-access side will try for regulation in the states, which may regulate some telecommunications services if federal regulators have not ordered them to forbear.