9th Circuit Overturns FCC's Cable Modem Decision

Decaffeinated Jedi writes "According to this Washington Post article, a federal appeals court in California has overturned a Federal Communications Commission decision that many smaller companies claim has kept them locked out of the high-speed cable Internet business. As Chris Murry of Consumers Union (publisher of Consumer Reports) notes, 'Many consumers hate their cable companies' privacy policies and their failure to deal with spam effectively. Giving consumers a choice of Internet service providers would open the door to more competition, and let people choose services with better privacy and less spam.' As noted in News.com coverage of this decision, however, FCC chairman Michael Powell plans to appeal the ruling." Reader rednaxela provides some more insight (and a link to the ruling itself), below.

rednaxela writes "The 9th Circuit today issued a decision overturning the FCC's classification of cable modem service as an 'information service,' stating instead that cable modem service consists of both an 'information service' *and* a 'telecommunications service.' Telecommunications services are classified under Title II of the Telecommunications Act of 1996, and are subject to all kinds of regulation. Information Services are classified under Title I, and are largely free from regulation. If upheld, this decision will likely require cable modem providers to open their networks to competing ISPs. Further, this is likely to derail, or at least complicate, the FCC's plans to classify DSL service (which is provided primarily over incumbent telco facilities) as a unified 'information service." Bottom line - the 9th Circuit's decision may well have preserved open access for competing ISPs on all forms of wireline networks.' Here is the 9th Circuit's ruling (PDF).

Comments

Re:I'm in Canada

[Pieroxy]

I have trouble understanding the FCC on this one. USA is a country with anti-trust laws, which basically means they know that a monopoly can kill a market, screw people, do a lot of bad things. They know it. And yet they enforce that a cable company will have a monopoly on their small (sometimes ridiculously small) geographic area.

How can you enforce something you know is bad for the market/consumer and therefore bad for the economy overall.

I used to live in Sunnyvale, CA (Not really far far away from the next city, just in the heart of the silicon valley), and where I lived, just *one* provider for cable: Castle Cable. They don't even provide internet cable!!!!!!

Guess who got my 39.99 broadband bill? SBC. No choice. Unless I rent a T1 or something...

Note that SBC is not so bad, so I'm globally happy.

Re:Competition=good thing.

[dilvie]

I didn't say that. Actually, I dislike most of the regulation in the telecomunications industry, but I also can't overlook the possibility that competition could lower my cable bill, or at least give me an alternative provider that might not screw up my billing every month

Build competing networks!

[Brian Stretch]

Seriously. The telcos and cable companies shouldn't have to share their hardware. However, local governments need to make it as easy as possible for competitors to get approval to build new networks. Fiber-to-the-home, anyone? HDTV over IP multicast? The "monopolies" are vulnerable if anyone wants to give it a shot.

If the "monopolies" started doing dumb things like blocking Internet traffic between their subscribers and Mom & Pop Internet Co., then you'd have a case for regulation, assuming the free market didn't smack them for such foolishness first. But making companies share their plant to the point that the "competitor" is just a marketeer slapping their name on the same service is silly. Powell is right.

Re:Question

[softweyr]

There is a lot more at stake than just the wire. The phone companies and in many cases the cable companies were given easements by local governments to run wire under streets, were often given land to place exchange offices on, etc., because they provide a "public good." These days, such rights-of-way can be sold for money, but the telcos and cable companies get a free ride off your tax dollars because they are supposedly providing a public service.

The irony in this is Qwest, generally one of the lousier Baby Bells, has a great DSL service offering. They'll partner with just about any ISPs that will pony up the bucks to drop in a local T-1 or greater connection to the QWest network, and offer dozens to hundreds of ISPs at reasonable rates (starting at roughly $22/month for 256K symmetrical, exclusive of ISP fees).

The cable companies have long complained what a burden it will be to provision cable modems with multiple ISPs, but it's just not true. All they have to be able to do is associate a subscriber, via the MAC address in their cable modem, with a DOCSIS config file that tells them which ISP to communicate with.

The telcos do have a bit of a head start, in that they have a logical and well-defined way to get the data off their network and onto the ISP: they require the ISP to buy telco services, in the form of T-1 or greater lines, to shovel the data across. I'm pretty certain the cable companies will be able to solve this problem in a cable company kind of way, too, if they just put their minds (well, engineers) to it. So let's have it, CableLabs, give us a cable standard for an ISP interconnect over cable.

This decision is more akin to the federal government requiring airlines to fly you to your destination regardless of which rental car company and hotel you will be using, rather than allowing them to refuse to fly you unless you use their rental cars, their hotels, etc. You wanna carry bits around on wire, fine. You wanna provide internet end-point services, that's fine too. Just don't tie the two businesses together.

Re:Question?

[softweyr]

I thought the cable companies totally funded the ... system.

As with most things in the USA, some did and some didn't. Some communities laid down cable themselves, some granted rights-of-way in existing underground conduits or on existing poles. Some cable companies strung the cable themselves, over public rights-of-way.

In some cases the early cable operators even strung the cable on poles that belonged to the local telco, without asking permission, and then were granted the ability to keep them by imminent domain laws, after the Bell System was broken up. Isn't that a wonderful sick twist on the whole affair?

Re:No need to worry...

[Schmucky The Cat]

Somebody else paid for?

Are you forgetting that cable operators in almost all areas have municipal charters? Government granted monopolies designed decades ago to spur investment. They've got their ROI. They can still charge for the lines use, but it's about time (and it shouldn't have taken a court to do it) that someone stood up and said it's time to end the cable monopolies.