FCC Begins Access Rules Proceeding

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Washington-The Federal Communications Commission last week started a proceeding that could result in the adoption of rules that would require cable operators to provide access to competing Internet-service providers by next year.

FCC officials told reporters the agency is trying to develop a record on a range of cable-access issues, both legal and technical, in light of clashing court decisions.

But agency officials insisted the proceeding was not designed to be the first step toward the creation of cable-access rules barring exclusivity between cable operators and ISPs. Over the last two years, the FCC has pursued a hands-off policy toward cable.

Specifically, the agency released a notice of inquiry in which it asked dozens of questions about cable-modem service and how it should be regulated, if at all. Its goal, the FCC said, was to create a national policy "to instill a measure of regulatory stability in the market."

If the FCC decides to impose access requirements on cable, it would have to start a new proceeding.

Realistically, FCC adoption of any open-access rules would not come until the middle of next year at the earliest.

"I view it as further delay, pointless delay," said Media Access Project president Andrew Schwartzman, an open-access proponent. "We have thought that doing an NOI borders on the pointless."

FCC officials claimed the cable-access proceeding was entirely separate from its review of America Online Inc.'s merger with Time Warner Inc. It has been reported that the agency may make open access a condition of that deal.

"You should not be tying AOL-Time Warner to this notice of inquiry," an FCC official told reporters.

Nevertheless, two agency officials went on the record with comments that suggested they're ready to impose access rules.

In a statement, FCC chairman William Kennard said he wanted the marketplace to resolve cable access issues but "it is unclear.whether a marketplace solution will develop absent some form of intervention."

FCC commissioner Gloria Tristani, also in a statement, indicated that AOL and Time Warner should not use the proceeding to make a case against applying open-access conditions to the merger.

"I strongly caution those who may believe the adoption of this item signals an intent to limit or constrain the [FCC's] ability to impose conditions in any particular case," Tristani said.

The National Cable Television Association said it welcomed the FCC's action, saying the FCC's 24-page inquiry did not "presume a regulatory outcome."

One cable-industry lawyer said the FCC appeared to agree with the U.S. Court of Appeals for the 9th Circuit's ruling that cable-modem service is an information service on the content side and a telecommunications service on the distribution end.

"It seems they want to go in the direction of declaring the transmission component of the cable service to be 'telecommunications,' because that leaves them the option of treating it as common or private carriage," the cable lawyer said.

The FCC does not regulate information-service providers. By classifying cable's transmission component as telecommunications, the FCC builds a foundation either to require open access or forbear from imposing that requirement.

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