News

NCTA: No Internet Role for Cities

2/20/2002 3:28 AM Eastern

In its boldest statements yet, the cable industry is urging federal
regulators to block local governments from imposing numerous regulations on
high-speed cable-modem service.

The National Cable & Telecommunications Association said local
governments should be barred from collecting franchise fees and imposing
public-access and customer-service obligations on cable-modem service.

The NCTA articulated its position in a five-page letter sent Feb. 19 to the
Federal Communications Commission, which is reviewing the regulatory
classification of cable-modem service in the wake of conflicting federal court
rulings.

The FCC is expected to classify cable-modem service as an information
service, and not as a cable service subject to a host of local regulatory
conditions.

Last week, the commission tentatively concluded that phone company-provided
broadband Internet-access service is an information service, and not a
telecommunications service subject to traditional common-carrier regulation.

'If the [FCC] finds that cable modem is an information service, there is no
legal basis or policy justification for subjecting it to local regulation,
including franchise fees,' the NCTA's letter said.

The trade group added that information services have traditionally fallen
within the FCC's exclusive jurisdiction and the global characteristics of the
Internet suggest that local regulation is inappropriate.

The imposition of the typical 5 percent franchise fee on cable-modem service
would require cable operators to collect an additional $2.50 per month (assuming
a $50 monthly bill) on cable high-speed-data customers, the association
said.

The NCTA suggested that a franchise fee on cable-modem service would be
discriminatory because competitors in the same market would not have to collect
franchise fees.

Requiring cable operators to sign new franchise agreements to provide
information services, while phone companies and other Internet-service providers
would be immune from such a requirement, would also place cable operators at a
competitive disadvantage, the NCTA said.

The NCTA's letter was intended to be a strong riposte to recent filings at
the FCC from the National Association of Telecommunications Officers and
Advisors and the FCC's Local and State Government Advisory Committee, both of
which urged the retention of local controls over cable operators in connection
with cable-modem service.

The NCTA urged the FCC to declare that in labeling cable-modem service as an
information service, it is also stating that cable-modem service is not a
telecommunications service and that no court or government actor may require
cable operators to carry competing ISPs involuntarily.

'Cable-modem service is interstate in nature, and the FCC should indicate
clearly that it is occupying the regulatory field. Failure to provide a clear
answer on this central question will cause continued uncertainty in the
marketplace, discouraging further investment in and expansion of cable-modem
service,' the NCTA said.

'Further, it will leave the cable industry vulnerable to numerous lawsuits
that would inevitably result from the lack of clarity,' the trade group
added.