Bill Would Let ISPs Lease Data Channels

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Washington -- A House bill introduced late last month would
allow Internet-service providers to lease high-speed-data channels from cable operators --
one more legislative bid to impose new carriage obligations on a resisting cable industry.

The bill, sponsored by Rep. Earl Blumenauer (D-Ore.),
arrived at a time when the Federal Communications Commission is considering a petition on
whether current law is sufficiently broad to allow data-service providers to lease
channels.

It also appeared just a few weeks after a House Judiciary
Committee hearing on a bill (H.R. 1686) that would allow ISPs that have been denied cable
access to file antitrust suits against cable operators with "market power in the
broadband-service-provider market."

The cable industry, which is opposing the antitrust bill,
claimed that leased access is a right granted to companies that provide "video
programming." The industry said the law never contemplated Internet access as a
candidate for leased access, even though some video programming is widely available over
the Internet.

But Blumenauer's bill (H.R. 2637) would bypass
cable's objection by amending existing cable law so that leased access could be used
by both video programmers and ISPs that are unaffiliated with the cable operator.

Blumenauer, who is in his third term, represents the city
of Portland -- the first major city to require cable operators to open their broadband
facilities to third-party ISPs.

"His biggest concern is that he thinks communities
should have the ability to choose [among ISPs]," Blumenauer spokeswoman Shannon
Jacobs said last week.

National Cable Television Association spokesman Scott
Broyles said Blumenauer's bill would harm competition and cause cable operators to
reconsider their broadband-investment plans.

"The legislation introduced by Rep. Blumenauer would
force cable operators to provide access to the broadband facilities they've risked
billions of dollars to build," Broyles said in a prepared statement.

"Rather than promoting competition and enhancing
consumer choice, the bill would have the opposite effect by creating regulatory
uncertainty and slowing down deployment of high-speed services," he added.

FCC chairman William Kennard spoke out in June after U.S.
District Court Judge Owen Panner held that Portland could use its cable-franchise-transfer
authority to require AT&T Broadband & Internet Services to open its facilities to
third-party ISPs.

Chief among Kennard's concerns was that investment in
high-speed-data facilities would slow to a crawl if thousands of local governments decided
to regulate terms and conditions between cable operators and parties seeking access.

The FCC is expected to file a brief opposing Panner's
decision in about two weeks, a commission source said last week.

Blumenauer's bill would address Kennard's
concerns by authorizing the FCC to establish "fair, reasonable and
nondiscriminatory" interconnection terms, which must be "functionally and
economically equivalent to the interconnection provided to any other Internet-service
provider, whether or not [that ISP is] affiliated with the cable operator."

Blumenauer aide Stephanie Vance said the FCC could, if it
chose, adopt national standards. Before those standards came into effect, unaffiliated
ISPs could rely on the leased-access provisions in the bill, she added.

Internet Ventures Inc., an ISP that has been seeking FCC
approval to lease cable channels, issued a statement in support of the bill even though
IVI believes current law protects unaffiliated ISPs that are seeking to gain cable access.

"This proposed legislation highlights the need for the
FCC to expeditiously grant the petition and force cable operators to abandon their desire
to monopolize the provision of these vital services, and to allow ISPs such as IVI to also
do so," IVI president Donald Janke said.

In other provisions, the bill would expose cable operators
to common-carrier regulation if provision of Internet access were deemed a
telecommunications service rather than a cable service. Passage of the bill would not
interfere with AT&T Broadband's appeal of the Portland case.

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