FCC takes a stand over cable open access

The Federal Communications Commission plans to go to court to say regulation of cable Internet access is a national issue, not a local one--a position that essentially supports AT&T's stance against cable open access.

After months on the sidelines, the FCC has finally jumped into the high-stakes battle over opening high-speed cable lines to competing Internet service providers (ISPs). FCC chairman William Kennard said his agency would file a brief in a recent Portland, Oregon court case that has opened the door for local regulation of cable networks.

The agency's position would essentially support AT&T in its battle against America Online and GTE, which contend that they should be allowed to use cable networks for their own subscribers.

At issue is the fight by ISPs to gain access to cable companies' high-speed networks. Today, most cable companies require their Internet subscribers to use an affiliated ISP, such as Excite@Home or Road Runner.

AOL and GTE say this gives cable companies virtual monopoly power over broadband connections. Yet Kennard said he has deliberately pursued a hands-off approach to open access to encourage firms to continue to build new high-speed networks. But recent local regulators' decisions have undermined this strategy, he added.

"As I've said before, it is in the national interest that we have a national broadband policy," Kennard told a group of communications lawyers Tuesday. "The FCC has the authority to set one, and we have. We have taken a deregulatory approach, an approach that will let this nascent industry flourish."

The move drew sharp criticism from ISPs and local phone companies, which have spent considerable time and money in recent months lobbying local officials.

"The FCC brief will have little bearing on the issue, we think," said Brianna Gowing, a GTE spokeswoman. "We think [local governments] do have the right to rule on this as far as the law is written."

A spokeswoman for the OpenNet Coalition, a group of ISPs led by AOL and MindSpring Enterprises, questioned the FCC's stance. "We're astonished that a high public official would put the federal government at the service of a giant communications company, as William Kennard has done," the spokeswoman said. "For the FCC to take sides in a lawsuit is like the referee holding down one boxer while the opponent pummels him."

AT&T, however, welcomed the FCC's new action on open access.

"We agree with chairman Kennard that if 30,000 localities each had its own Internet access regulations, the result would be chaos," said AT&T spokeswoman Rochelle Cohen. "There is no need for such regulations, which would only serve to slow the development of local phone competition and the delivery of new high-speed data services to consumers."

Open access has recently been most hotly debated on the local level. Some cities and counties, as part of the transfer of cable licenses following AT&T's purchase of Tele-Communications Incorporated, have decided to push for cable open access.

Last month, a federal court decision upheld the city of Portland's right to force AT&T to open its cable lines as a condition of approving the transfer of local cable franchise rights. AT&T has appealed the case, but the initial decision sparked similar activity by other local governments. Florida's Broward County has followed Portland down the open access road, and San Francisco is scheduled to vote on open access next week.

In an interview with CNET News.com earlier this week, Kennard said that creating a "patchwork" of local regulations across the country would lead to "chaos" in the broadband market.

"If you look at the folks who have taken the time to really investigate and research this issue, they come up with the same viewpoint of the FCC," Excite@Home spokesman Matt Wolfrom said, referring to a five-month study by Los Angeles suggesting open access laws are unnecessary. "The market's working, quite frankly--let the market decide."

Kennard said he'd asked his general counsel to file a brief in AT&T's appeal of the Portland case "so we can explain to the court why it's important that we have a national policy."

"In the meantime, the FCC will continue its active monitoring of the broadband marketplace," he added. "And this includes listening to the very real concerns that local franchising authorities have."

AT&T's appeal of the Portland ruling has been granted a fast-track status by the court, and will have its first hearing in October. The FCC may file its brief on the case anytime before then.

If the appeals court overturns the original Portland decision--as the FCC will now ask it to do--the move will badly undermine other local governments' ability to enforce cable open access requirements.

A reversal of the decision would allow AT&T to offer its Excite@Home service in Portland without having to give other ISPs direct access to its cable wires.