FCC declares cable Internet an information service

The Federal Communications Commission (FCC) defined cable Internet services as an "information service" on Thursday, potentially placing cable Internet on the same regulatory footing as high-speed Internet services offered by phone companies.

The definition is preliminary, and open for public comment for the next 60 to 90 days. The FCC also ruled in its monthly open meeting at FCC headquarters in Washington, D.C., that cable Internet broadband services travel across state lines, establishing the legal framework for federal regulation.

Last month, the FCC issued a notice of proposed rule-making for DSL technology and other high-speed data services offered over phone lines, tentatively classifying them as information services.

Broadband is a new service compared to other areas regulated by the FCC, such as television signals, radio, or satellite communications, and particularly newer than the hundred-year-old telephone network, which bears the greatest regulatory burden in modern communications.

By classifying cable Internet service as an information service, it takes it out of the regulatory realm of cable television service and casts it into a nebulous, emerging set of rules. The FCC's notice of proposed rule-making for cable Internet information services asks how state and local jurisdiction will affect broadband regulation, what impact the ruling will have on cable franchise fees, and whether cable companies will be required to open up their lines to competing Internet service providers, much like the dominant incumbent local phone companies must make their facilities available for use by competitors.

Telephone companies like Verizon Communciations and BellSouth must share their computerized switching offices with local phone service competitors, such as Covad Communciations, if the incumbent wants to be able to offer long distance services. The rule was put in place to ensure competition with the local incumbents, which for years had local phone service monopolies. Cable television companies also often have local service monopolies, but aren't under the same open access requirements for television services.

With today's decision, it appears unlikely that the FCC will mandate open access for cable Internet service, said David Rohde, a senior analyst with the TechCaliber telecommunications consulting firm in Washington, D.C.

"If you look at all the building blocks, at all the things that the FCC is doing... it adds up to Tauzin-Dingell, with a few more enforcement provisions and a little more logic thrown in," he said, referring to the deregulation bill passed last month by the U.S. House of Representatives and currently under Senate consideration. The Tauzin-Dingell bill would allow local phone incumbents to offer long-distance data services without having to provide open access to local data service competitors. The bill would likely kill off all competition for DSL services, according to upstart competitors, but the incumbent phone companies argue that it would put them on the same regulatory playing field as cable Internet service.

AOL Time Warner was required to make its cable lines open to Internet service competitors as a prerequisite to its merger last year. Other cable companies such as AT&T and Charter Communications have been experimenting with allowing access by competitors. But the cable companies have fought efforts by state agencies to mandate open access.

The FCC is looking concurrently at the rules for both DSL and cable broadband. In the baby steps being taken toward a fully grown set of regulations, commissioners have come to some basic conclusions, said Sara Lee Boteler, a spokeswoman for incumbent phone carrier SBC Communications.

"They've said, 'customer choice is good,'" she said, adding that the commissioners haven't made up their minds about how to bring it about.

The debate among consumers, incumbent providers and upstart competitors, however, is over how best to promote competition -- whether or not to force entrenched players to open access to their networks to competitors.

The IDG News Service is a Network World affiliate.