WASHINGTON — In a momentous win for the cable biz, the FCC on Thursday began mapping cyberspace and ruled that cablers don’t have to open up their high-speed Internet lines to competitors.
The 3-1 vote classifying cable modems as an “information” vs. a “telecommunications” or “video” service means no burdensome local and state regulations. Rather, cable modem lines are viewed as interstate.
It also means cablers offering high-speed Internet won’t be required to make their lines available to competing Internet service providers.
And the FCC tentatively ruled that local governments can’t charge cablers offering Internet service a franchise fee — a cost generally passed on to customers. The agency will launch a public review in the comings weeks to determine if the fee ruling should be made permanent.
“Today’s FCC decision establishes a needed national policy framework for cable high-speed Internet services,” National Cable & Telecommunications Assn. prexy-CEO Robert Sachs said.
When consummating its merger, AOL TW voluntarily agreed to open up its cable modem lines to several competing ISPs. Thursday’s FCC action does not relieve the conglom of its obligation, since the open-access agreement was part of a consent decree signed off on by Washington antitrust officials.
Still, the FCC action was clearly a landmark victory for giant cablers like AOL TW and AT&T Broadband, since it means they can call more of the shots when offering high-speed Internet service.
Consumer advocates derided FCC topper Michael Powell, saying cablers shouldn’t be excused from having to keep their valuable pipes open to competitors.
“Michael Powell’s FCC has struck a deadly blow to the future health of the Internet and has given a great victory to the cable industry lobby. Cable will be able to become an even more powerful media gatekeeper, controlling much of what will be digitally distributed into U.S. homes,” Center for Digital Democracy exec director Jeff Chester said.
The FCC’s partisan vote — with Democratic commish Michael Copps the lone dissenter — is likely to spark intense debate on Capitol Hill, where solons are torn about whether the FCC should be left alone to decide the rules of the Internet.
Local phone companies, which wield great lobbying power, are none too happy that they have to make their Internet lines available to competitors. The FCC in recent days launched a parallel study of whether local phone companies should be relieved of this rule.
Powell insisted the FCC was well within its authority to make the ruling. He also made it clear that the subject isn’t closed and that the agency will continue to deliberate the fee franchise issue. It also will allow the public to further comment on the open access issue.
Copps criticized his FCC colleagues for taking too giant of a leap.
“How America deploys broadband is the central infrastructure challenge our country faces. With so much at stake, I would have hoped for a little more modesty and measured pace on our part,” Copps said.
Current numbers show that about 7 million Americans use cable modems, about twice as many customers paying for DSL lines through their phone companies.
Sachs said the decision does not make the playing field uneven and that the market is robust.
“The classification of cable modem service as an ‘information service,’ and not a telecommunications service, sends a strong signal that cable Internet services will be able to continue to develop in a business environment that favors competition over regulation and encourages new investment,” Sachs said.