The FCC's Insecurity

Thursday's monthly meeting of the FCC was supposed to include a discussion of the "open access" cable issue. It failed to even open up the debate, let alone deliver a national broadband policy.

by Patricia Fusco
Associate Editor, ISP-Planet
[September 15, 2000]

After trimming its agenda from seven to four items, Federal Communications Commission Commissioner Gloria Tristani asked that the regulators also postpone discussing the hotly contested cable issue. Tristani expressed outrage that The Washington Post had published a draft copy of the regulatory agency's tentative proposals concerning its review of cable access in the U.S.

The article said that FCC was closely coordinating its review with the Federal Trade Commission, which is strongly inclined toward forcing cable companies to share their systems with rivals as a part of its current review of the America Online Inc., Time Warner Inc. merger.

To kill a mockingbird
Tristani said the article "makes a mockery of our system," adding that, "it's a troubling breach because everyone who had access to the draft must be questioned."

FCC Commissioner William Kennard has put all staff members on notice and said that he considered the incident a very serious breach of the Commission's procedures. Kennard ordered that the Inspector General investigate the incident immediately.

Kennard then agreed to postpone the cable discussion, as long as Tristani agreed to vote on the item within a two-week timetable.

In doing so, Kennard said it was very important that the regulators work quickly to address the cable issue.

"It's time that we step up to the plate and establish a record on cable access," Kennard said. "Stay tuned, we will issue a decision very soon."

Summertime dream
The five federal regulators announced the inquiry into cable access at the end of June. Kennard said that the time was right for the FCC staff to develop a framework for addressing cable issues.

The U.S. 9th Circuit Court of Appeals ruled that broadband access to the Internet over cable systems is a "telecommunications service." Known as the "Portland Decision," the ruling opened the door for FCC review by deciding that cable should be treated like copper and regulated in a similar manner.

A call to arms
The openNET Coalition, which has remained relatively silent on the issue over the summer, issued a preemptive reaction to the alleged results of the FCC's Notice of Inquiry.

The group, representing more than 1,000 independent Internet service providers across the nation, renewed its call for the FCC to take definitive action and guarantee consumer choice of ISPs over cable broadband networks by the end of the year.

Kristan Van Hook, openNET co-director, said that the group was frustrated that it's taken nearly two years of national debate for the FCC to finally begin a formal review of the open access issue.

"We are disappointed that the FCC is issuing a call for further discussion rather than proposing concrete steps that will ensure consumer choice on cable broadband systems," Van Hook said. "We urge the FCC to act as quickly to require open access as the industry is moving to provide cable broadband services."

The openNET coalition and other consumer groups asked that the FCC uphold the principles supported by the Court and establish a national policy mandating open access.

The issue of cable-based Internet access and the opportunity for providers to gain access to MSO networks has taken center stage in the proposed America Online Inc. (NYSE:AOL), Time Warner Inc. (NYSE:TW) deal.

Waiting for go
Both AOL and Time Warner signed a memorandum of understanding in February agreeing to provide competitors access and company executives said they considered the policy binding.

Juno Online Services Inc. reached an initial agreement to access Time Warner's cable system in July and the national ISP is participating in shared access tests taking place in Columbus, OH. But the terms of the deal have not been finalized and no date has been announced for when users can access the ISP of their choice over Time Warner's system.

MindSpring, now owned by EarthLink, Inc. (NASDAQ:ELNK) struck a similar deal with AT&T Corp. (NYSE:T). But the deal is delayed until exclusive contracts among principal partners of Excite@Home (NASDAQ:ATHM) expire in June 2002.

Rich Bond, openNET co-director, said the memos of understanding between major cable broadband and a few providers say that consumers may have a choice of ISPs in the future, but that the agreements are merely lip-service that feign support of open access.

"Prompt and effective FCC action is needed to safeguard the open architecture of the Internet and ensure that consumers of cable broadband services nationwide have non-discriminatory access to the ISP of their choice," Bond said. "Delay in protecting the basic openness of the Internet is depriving consumers the benefits of lower prices, better service, innovation, and choice in broadband services."

The openNET Coalition has been promoting the adoption of a national open access policy since its inception in 1998, but this is the first time the organization called on the FCC to take action, when federal regulators were reportedly poised to do just that.

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