Newport, R.I.-FCC commissioner Susan Ness last week applauded the cable industry's voluntary steps to provide access to a variety of Internet-service providers, claiming the effort validated the Federal Communications Commission's policy of allowing market forces to shape the access debate.
The industry's most recent move occurred late last month, when AT & T Corp. agreed to provide ISP choice in Massachusetts by July 1, 2002. AT & T is also planning an open-access trial with 10 ISPs in Boulder, Colo., starting in November.
AT & T's action came amid intense lobbying pressure. The Massachusetts Coalition for Consumer Choice and Competition, for example, was gearing up to put an open-access measure on the statewide November ballot.
"AT & T not only avoided a ballot initiative, but also demonstrated that we at the FCC are correct in our policy of vigilant monitoring of the marketplace to ensure that cable customers receive the benefits of competition," Ness said in a speech at the New England Cable Television Association conference here.
For some, AT & T's open-access plans are not occurring quickly enough in that competing ISPs won't be able to offer their own broadband services until after AT & T has signed up millions of subscribers.
But Ness indicated that FCC policies were already benefiting consumers, noting that some phone companies are slashing their prices for digital-subscriber-line service, the telcos' high-speed alternative to cable modems.
In Massachusetts, Bell Atlantic Corp. (now Verizon Communications) announced two weeks ago that it was cutting its basic DSL-service rate 20 percent, from $50 per month to $40.
"This is precisely the behavior that the commission most likes to see: New investment leading to new services leading to expanded options for consumers," Ness said.
At the direction of FCC chairman William Kennard, the commission is moving ahead with a plan to develop some regulatory definitions of Internet access offered by cable operators.
The cable industry said Internet access is a cable service not subject to federal, state or local open-access rules that apply to common-carrier phone companies. But the courts have split on this issue.
In May, a U.S. District Court judge in Richmond, Va., agreed with the cable industry and tossed out an open-access law adopted by Henrico County, Va., in a case now pending before the U.S. Court of Appeals for the Fourth Circuit.
But the U.S. Court of Appeals for the Ninth Circuit-in an open-access case AT & T won against the city of Portland, Ore.-emphatically declared June 22 that AT & T's Excite@Home Corp. service was not a cable service.
Instead, the three-judge panel in San Francisco said Excite@Home was an information service in terms of content and a telecommunications service in terms of the transmission of that content.
In separate remarks to a NECTA audience, Deborah Lathen, chief of the FCC's Cable Services Bureau, said agency staff is considering at least three options for carrying out Kennard's orders.
Lathen-who's played a major role in shaping the FCC's policy of monitoring cable Internet-access policy with a light hand-said the commission could launch a formal rulemaking or seek information through a notice of inquiry.
The third option is to study the issues within the context of an open-access petition filed July 7 by the U.S. Internet Industry Association, an ISP trade group based in Arlington, Va.
"We are studying a range of options that we are going to do with respect to that," she added.
In an important footnote, Lathen stated several times that an exploration of the regulatory issues stemming from the court decisions was not a signal that the FCC was about to force cable operators to carry competing ISPs.
"The policy hasn't changed," she said. "The policy remains that we believe this is a nascent industry and we believe market forces determine and allow this industry to go."
Since the Portland decision, open-access proponents have stepped up their pressure on the FCC and local governments to require cable to provide ISP choices.
Last week, the Competitive Telecommunications Association (CompTel), which represents long-distance companies and competitive local-exchange carriers, sent Kennard a letter saying that the Portland decision gave the FCC the authority to demand cable open access, and that the agency should do it.
The CompTel letter landed on Kennard's desk three days after the USIIA petition stating that the Portland case meant that open-access rules automatically applied to cable operators reached the FCC.
Lastly, the Consumer Federation of America released an "action plan" July 13 designed to prod local governments into requiring cable operators to open their Internet facilities to competing ISPs.
The CFA's plan urged local governments to explore the use of their police powers and their control over public rights of way to impose open access.
With regard to ISPs, the consumer group urged them to demand "interconnection agreements and non-discriminatory access from cable-modem-service providers," and to go to court if agreements can't be reached.