Cybertelecom
Cybertelecom
Federal Internet Law & Policy
An Educational Project
Cybertelecom Internet Law Notes:
Cable Open Access
| Notes | Cable | Open Access NOI |
These notes are not complete and there is no guarantee that they are accurate. They are presented simply as notes. Feel free to use them but as with all material on the Internet Telecom Project, you should consider them a beginning to your research and not an end.

Broadband Internet

 Definitions
Definitions Cable Broadband
Cable Service
Common Carrier
Information Service
Telecommunications
Telecommunications Facility
Telecommunications Service
Cable Regulatory Definition of Cable Internet Service Internet over Cable = Info Service + Telecom @Home Portland Offering Internet over Cable = Information Service + Telecom Service
Internet over Cable =/= Telecommunications Service
Internet over Cable =/= Cable Service @HomeInternet over Cable = Cable Service
Internet over Cable is Neither Cable or Telecom
Deference to FCC
2. Franchising Authority * If Not Cable Service, then no Franchising Authority
If Telecom Service, no authority
If Cable, No Restriction on Transmission Tech
If Cable, Then Cant Impose Common Carrier Regulation
If Cable then No Programming Regulation
Regulatory Proceedings Sec. 706 ProceedingBroadband BottleneckContent First Page
First Amendment Cable
Conduit - Circulation Conduit and Content Connected
Conduit Discrimination
Forced Access
DSL Broadband NPRM Background (what has changed)

Cases

Definitions

Cable Broadband

                Beyond the domain of cable-specific regulation, the definition of cable broadband as a telecommunications service coheres with the overall structure of the Communications Act as amended by the Telecommunications Act of 1996, and the FCC's existing regulatory regime. Elsewhere, the Communications Act contemplates the provision of telecommunications services by cable operators over cable systems. See, e.g., 47 U.S.C. S 224(d)(3) (authorizing FCC utility pole attachment rate-setting "for any pole attachment used by a cable system . . . to provide any telecommunications service."). In the Telecommunications Act, Congress defined advanced telecommunications capability "without regard to any transmission media or technology," in terms that describe cable broadband: "high-speed, switched, broadband telecommunications capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology." Pub. L. 104-104, S 706(c)(1), 110 Stat. 56, 153 (1996) (reproduced at note under 47 U.S.C. S 157). Consistent with our view, the FCC regulates DSL service, a high-speed competitor to cable broadband, as an advanced telecommunications service subject to common carrier obligations. See GTE Operating Companies Tariff No. 1 , 13 FCCR. 22466 (1998).
                 Among its broad reforms, the Telecommunications Act of 1996 enacted a competitive principle embodied by the dual duties of nondiscrimination and interconnection. See 47 U.S.C. S 201(a) ("It shall be the duty of every common carrier engaged in interstate or foreign communication by wire or radio to furnish such communication service upon reasonable request therefor"); 47 U.S.C. S 251(a)(1) ("Each telecommunications carrier has the duty . . . to interconnect directly or indirectly with the facilities and equipment of other telecommunications carriers"). Together, these provisions mandate a network architecture that prioritizes consumer choice, demonstrated by vigorous competition among telecommunications carriers. As applied to the Internet, Portland calls it "open access," while AT&T dysphemizes it as "forced access." Under the Communications Act, this principle of telecommunications common carriage governs cable broadband as it does other means of Internet transmission such as telephone service and DSL, "regardless of the facilities used." 47 U.S.C. S 153(46). The Internet's protocols themselves manifest a related principle called "end-to-end": control lies at the ends of the network where the users are, leaving a simple network that is neutral with respect to the data it transmits, like any common carrier. On this rule of the Internet, the codes of the legislator and the programmer agree.
      -- AT&T v. Portland, Case Number 99-35609 (9th Cir. June 22, 2000).

    Cable Service

       
      (6) the term ''cable service'' means -
        (A) the one-way transmission to subscribers of (i) video programming, or (ii) other programming service, and
        (B) subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service;
      47 U.S.C. § 522(6).

      (20) the term ''video programming'' means programming provided by, or generally considered comparable to programming provided by, a television broadcast station.
      47 U.S.C. § 522(20).

      Subject to limited exceptions, the Communications Act provides that "a cable operator may not provide cable service without a franchise." 47 U.S.C. S 541(b)(1). The Act defines "cable service" as "(A) the one-way transmission to subscribers of (i) video programming, or (ii) other programming service, and (B) subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service." 47 U.S.C. S 522(6). For the purposes of this definition, "video programming" means "programming provided by, or generally considered comparable to programming provided by, a television broadcast station, " 47 U.S.C. S 522(20), and "other programming service " means "information that a cable operator makes available to all subscribers generally." 47 U.S.C. S 522(14). The essence of cable service, therefore, is one-way transmission of programming to subscribers generally.
      -- AT&T v. Portland, Case Number 99-35609 (9th Cir. June 22, 2000).
       

      Cable service, defined in section 522, is "the one-way transmission to subscribers of (i) video programming, or (ii) other programming service, and subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service." 47 U.S.C. § 522(6)(A), (B) (1994 & Supp. II 1996).(30) The only difference between this definition of "cable service" and the definition included in the 1978 Act is the addition of the words "or use." According to the House Report accompanying the 1996 amendments, the inclusion of the words "or use" was meant to "reflect[ ] the evolution of video programming toward interactive services." H. Rep. No. 104-204, at 97, reprinted in 1996 U.S.C.C.A.N. at 64. This is the only sentence in the legislative history that attempts to explain Congress' change to the definition of "cable service." Although what it means to reflect an evolution of video programming toward interactive service is not exactly clear, it is clear from Congress' lack of discussion of this change that it was minor in both language and intent. If Congress by the addition of these two words meant to expand the scope of the "cable service" definition from its traditional video base to include all interactive services, video and non-video, it would have said so. Without any substantive comment, we will not read this minor change to effectuate a major statutory shift. See Walters v.
      National Ass'n of Radiation Survivors, 473 U.S. 305, 318, 105 S.Ct. 3180, 3187, 87 L.Ed.2d 220 (1985) (stating that without substantive comment "it is generally held that a change during codification is not intended to alter the statute's scope") (citing Muniz v. Hoffman, 422 U.S. 454, 467-74, 95 S.Ct. 2178, 2185-89, 45 L.Ed.2d 319 (1975)). How then did the addition of the words "or use" alter the definition of "cable service"? The statute's plain language and Congress' one sentence explanation suggest that Congress expanded the definition to include services that cable television companies offer to their customers to allow them to interact with traditional video programming.(31)

        --Gulf Power Co. v. FCC, Sec. V. (11th Cir. 4/11/200)

      Regulatory Definition of Cable Internet

        Cable Internet = Info Service + Telecom

    See CyberTelecom Internet Law Notes: Definitions: Information Services & Enhanced Service Providers.


The Commission first concluded that cable modem service is an “information service,” a conclusion unchallenged here. The Act defines “information service” as “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications . . . .” §153(20). Cable modem service is an information service, the Commission reasoned, because it provides consumers with a comprehensive capability for manipulating information using the Internet via high-speed telecommunications. That service enables users, for example, to browse the World Wide Web, to transfer files from file archives available on the Internet via the “File Transfer Protocol,” and to access e-mail and Usenet newsgroups. Declaratory Ruling 4821, ¶37; Universal Service Report 11537, ¶76. Like other forms of Internet service, cable modem service also gives users access to the Domain Name System (DNS). DNS, among other things, matches the Web page addresses that end users type into their browsers (or “click” on) with the Internet Protocol (IP) addresses1 of the servers containing the Web pages the users wish to access. Declaratory Ruling 4821–4822, ¶37. All of these features, the Commission concluded, were part of the information service that cable companies provide consumers. Id., at 4821–4823, ¶¶36–38; see also Universal Service Report 11536–11539, ¶¶75–79.

At the same time, the Commission concluded that cable modem service was not “telecommunications service.” “Telecommunications service” is “the offering of telecommunications for a fee directly to the public.” 47 U. S. C. §153(46). “Telecommunications,” in turn, is defined as “the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sentand received.” §153(43). The Commission conceded that, like all information-service providers, cable companies use “telecommunications” to provide consumers with Internet service; cable companies provide such service via the high-speed wire that transmits signals to and from an end user’s computer. Declaratory Ruling 4823, ¶40. For the Commission, however, the question whether cable broadband Internet providers “offer” telecommunications involved more than whether telecommunications was one necessary component of cable modem service. Instead, whether that service also includes a telecommunications “offering” “tur[ned] on the nature of the functions the end user is offered,” id., at 4822, ¶38 (emphasis added), for the statutory definition of “telecommunications service” does not “res[t] on the particular types of facilities used,” id., at 4821, ¶35; see §153(46) (definition of “telecommunications service” applies “regardless of the facilities used”).

Seen from the consumer’s point of view, the Commission concluded, cable modem service is not a telecommunications
offering because the consumer uses the high-speed wire always in connection with the information-processing capabilities provided by Internet access, and because the transmission is a necessary component of Internet access: “As provided to the end user the telecommunications is part and parcel of cable modem service and is integral to its other capabilities.” Declaratory Ruling 4823, ¶39. The wire is used, in other words, to access the World Wide Web, newsgroups, and so forth, rather than “transparently” to transmit and receive ordinary-language messages
without computer processing or storage of the message. See supra, at 4 (noting the Computer II notion of “transparent” transmission). The integrated character of this offering led the Commission to conclude that cable modem service is not a “stand-alone,” transparent offering of telecommunications. Declaratory Ruling 4823–4825, ¶¶41–43.

NCTA v. BrandX, No. 04-277, 545 U.S. __, Slip at 16-17 (S.Ct. June 27, 2005)


MediaOne's Road Runner service combines the use of a cable modem platform with access to the Internet. Road Runner's cable modem platform, separated from its Internet service component, is a telecommunications facility because it is a pipeline for telecommunications, that is, for "the transmission . . . of information of the user's choosing, without change in the form or content." Id. S 153(43) (defining "telecommunications").
. . . . .
The County makes a separate argument that MediaOne's facilities qualify as a "cable system" that cannot be said to include any telecommunications facilities. Under the Communications Act a cable system is defined as "a facility . . . that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community." 47 U.S.C. S 522(7). The County points out that MediaOne offers traditional "cable services," like video programming, over its facilities. It therefore asserts that because its system is "designed to provide cable service" it cannot be considered a telecommunications facility. According to the County, providing Internet access over its cable system does not magically transform the cable system into a telecommunications facility.

We disagree with the County. The Communications Act recognizes that some facilities can be used to provide more than one type of service. The Act therefore contemplates that multi-purpose facilities will receive different regulatory classification and treatment depending on the service they are providing at a given time. For example, under 47 U.S.C. S 522(7)(C) the definition of "cable system" does not include a facility of a common carrier that offers telecommunications services "except that such facility shall be considered a cable system . . . to the extent that such facility is used in the transmission of video programing directly to subscribers, unless the extent of such use is solely to provide interactive on-demand services." In addition, under 47 U.S.C. S 153(46) the term "telecommunications service" is defined as "the offering of telecommunications for a fee directly to the public . . . regardless of the facilities used." (emphasis added). Therefore, although MediaOne maintains a "cable system," its facilities can be properly classified as telecommunications facilities when they provide a transmission path to the Internet.
Mediaone Group, Inc v. Henrico County , 2001 WL 788864, __ F.3d __, at 14 & 15 (4th Cir Jul. 21, 2001), available at http://pacer.ca4.uscourts.gov/cgi-bin/getopn.pl?OPINION=001680.P


Although cable modem service includes a telecommunications component, in that the provider employs telecommunications to deliver Internet access to subscribers, that fact does not demonstrate that cable modem service is a “telecommunications service.” To the contrary, information services are by definition offered “via telecommunications.” 47 U.S.C. 153(20). Under the Act, therefore, a service is not a “telecommunications service” merely because it uses telecommunications. Instead, an entity provides a “telecommunications service” only by “offering telecommunications for a fee directly to the public.” 47 U.S.C. 153(46) (emphasis added). ... There is
no doubt that cable modem service has the characteristics of an information service. The Commission had previously concluded that Internet access service “is appropriately classified as an information service” under the Communications Act, id. at 91a; cable modem service provides the same functions as other forms of Internet access service, such as e-mail, news groups, and web-page hosting, see id. at 93a-95a; and no party to the FCC’s proceeding had suggested that cable modem service is solely a telecommunications service, see id. at 86a-87a n.135. Thus, the remaining question was whether cable modem service, in addition to being an information service under the Act, is in part a telecommunications service as well. - FCC v. BrandX, Petition for Writ of Certiori (U.S.) p. 16

          @Home

[6] Like other ISPs, @Home consists of two elements: a "pipeline" (cable broadband instead of telephone lines), and the Internet service transmitted through that pipeline. However, unlike other ISPs, @Home controls all of the transmission facilities between its subscribers and the Internet. To the extent @Home is a conventional ISP, its activities are one of an information service. However, to the extent that @Home provides its subscribers Internet transmission over its cable broadband facility, it is providing a telecommunications service as defined in the Communications Act.
-- AT&T v. Portland, Case Number 99-35609 (9th Cir. June 22, 2000).
        Cable Internet = Info Service + Telecom Service

[5] Our holding in Mesa Verde, along with that of the Supreme Court in Neal, requires our adherence to the interpretation of the Communications Act we announced in Portland. There, we concluded that cable broadband service was not a "cable service" but instead was part "telecommunications service" and part "information service." Because the Commission's Declaratory Ruling agreed with our conclusion that cable broadband service is not "cable service," but disagreed with our conclusion that it is in part "telecommunications service," we must
[6] AFFIRM in part, VACATE in part, and REMAND for further proceedings not inconsistent with this opinion.14
-- BrandX v FCC, Sec. III, 9th Cir 10/6/2003


In AT&T v. City of Portland, 216 F.3d 871 (9th Cir. 2000), we reviewed the open access conditions a local franchise author-ity had placed on the sale of a cable franchise. As discussed in detail below, we held that cable modem service did not qualify as a "cable service" and that it contained both information service and telecommunications service components. As a result, the local franchise authority could not impose conditions on the sale.  At approximately the same time, a court in the Eastern District of Virginia invalidated a local ordinance that imposed open access requirements on cable modem service, concluding that cable modem involved a telecommunications component and that it also qualified as cable service. Mediaone Group, Inc. v. County of Henrico, 97 F. Supp. 2d 712, 714-15 (E.D. Vir. 2000), aff'd, 254 F.3d 356 (4th Cir. 2001). See also Gulf Power Co. v. FCC, 208 F.3d 1263, 1277 (11th Cir. 2000), rev'd, 534 U.S. 327 (2002) (holding that the FCC could not regulate pole attachments for internet services because they did not qualify as telecommunications services).
-- BrandX v FCC, Sec. I, page 14757, 9th Cir 10/6/2003

Offering

This construction passes Chevron’s first step. Respondents argue that it does not, on the ground that cable companies providing Internet service necessarily “offe[r]” the underlying telecommunications used to transmit that service. The word “offering” as used in §153(46), however,does not unambiguously require that result. Instead, “offering” can reasonably be read to mean a “stand-alone” offering of telecommunications, i.e., an offered service that, from the user’s perspective, transmits messages unadulterated by computer processing. That conclusion follows not only from the ordinary meaning of the word “offering,” but also from the regulatory history of the Communications Act.

Cable companies in the broadband Internet service business “offe[r]” consumers an information service in the form of Internet access and they do so “via telecommunications,” §153(20), but it does not inexorably follow as a matter of ordinary language that they also “offe[r]” consumers the high-speed data transmission (telecommunications)
that is an input used to provide this service,§153(46). We have held that where a statute’s plain terms admit of two or more reasonable ordinary usages, the Commission’s choice of one of them is entitled to deference. See Verizon, 535 U. S., at 498 (deferring to the Commission’s interpretation of the term “cost” by reference to an alternative linguistic usage defined by what “[a]merchant who is asked about ‘the cost of providing the goods’ ” might “reasonably” say); National Railroad Passenger Corporation v. Boston & Maine Corp., 503 U. S. 407, 418 (1992) (agency construction entitled to deference where there were “alternative dictionary definitions of the word” at issue). The term “offe[r]” as used in the definition of telecommunications service, 47 U. S. C. §153(46), is ambiguous in this way.

It is common usage to describe what a company “offers” to a consumer as what the consumer perceives to be the integrated finished product, even to the exclusion of discrete components that compose the product, as the dissent concedes. See post, at 3 (opinion of SCALIA, J.). One mightwell say that a car dealership “offers” cars, but does not“offer” the integrated major inputs that make purchasing the car valuable, such as the engine or the chassis. It would, in fact, be odd to describe a car dealership as “offering” consumers the car’s components in addition to the car itself. Even if it is linguistically permissible to say that the car dealership “offers” engines when it offers cars, that shows, at most, that the term “offer,” when applied to a commercial transaction, is ambiguous about whether it describes only the offered finished product, or the prod-uct’s discrete components as well. It does not show that no other usage is permitted.

The question, then, is whether the transmission component of cable modem service is sufficiently integrated with the finished service to make it reasonable to describe the two as a single, integrated offering. See ibid. We think that they are sufficiently integrated, because “[a] consumer uses the high-speed wire always in connection with the information-processing capabilities provided by Internet access, and because the transmission is a necessary component of Internet access.” Supra, at 16. In the telecommunications context, it is at least reasonable to describe companies as not “offering” to consumers each discrete input that is necessary to providing, and is always used in connection with, a finished service. We think it no misuse of language, for example, to say that cable companies providing Internet service do not “offer” consumers DNS, even though DNS is essential to providing Internet access. Declaratory Ruling 4810, n. 74, 4822–4823, ¶38. Likewise, a telephone company “offers” consumers a transparent transmission path that conveys an ordinary-language message, not necessarily the data transmission facilities that also “transmi[t] . . . information of the user’s choosing,” §153(43), or other physical elements of the facilities used to provide telephone service, like the trunks and switches, or the copper in the wires. What cable companies providing cable modem service and telephone companies providing telephone service “offer” is Internet service and telephone service respectively—the finished services, though they do so using (or “via”) the discrete components composing the end product, including data transmission. Such functionally integrated components need not be described as distinct “offerings.”

In response, the dissent argues that the high-speed transmission component necessary to providing cable modem service is necessarily “offered” with Internet service because cable modem service is like the offering of pizza delivery service together with pizza, and the offering of puppies together with dog leashes. Post, at 3–4 (opinion of SCALIA, J.). The dissent’s appeal to these analogies only underscores that the term “offer” is ambiguous in the way that we have described. The entire question is whether the products here are functionally integrated (like the components of a car) or functionally separate (like pets and leashes). That question turns not on the language of the Act, but on the factual particulars of how Internet technology works and how it is provided, questions Chevron leaves to the Commission to resolve in the first instance. As the Commission has candidly recognized, “the question may not always be straightforward whether, on the one hand, an entity is providing a single information service with communications and computing components, or, on the other hand, is providing two distinct services, one of which is a telecommunications service.” Universal Service Report 11530, ¶60. Because the term “offer” can sometimes refer to a single, finished product and sometimes to the “individual components in a package beingoffered” (depending on whether the components “stillpossess sufficient identity to be described as separate objects,” post, at 3), the statute fails unambiguously to classify the telecommunications component of cable modem service as a distinct offering. This leaves federal telecommunications policy in this technical and complex area to be set by the Commission, not by warring analogies.

NCTA v. BrandX, No. 04-277, 545 U.S. __, Slip at 17-19 (S.Ct. June 27, 2005)

Portland

Against this background, the Court of Appeals erred in refusing to apply Chevron to the Commission’s interpretation of the definition of “telecommunications service,” 47 U. S. C. §153(46). Its prior decision in Portland held only that the best reading of §153(46) was that cable modem service was a “telecommunications service,” not that it was the only permissible reading of the statute. See 216 F. 3d, at 877–880. Nothing in Portland held that the Communications
Act unambiguously required treating cable Internet providers as telecommunications carriers. Instead, the court noted that it was “not presented with a case involving potential deference to an administrative agency’sstatutory construction pursuant to the Chevron doctrine,” id., at 876; and the court invoked no other rule of construction (such as the rule of lenity) requiring it to conclude that the statute was unambiguous to reach its judgment. Before a judicial construction of a statute, whether contained in a precedent or not, may trump an agency’s, the court must hold that the statute unambiguously requires the court’s construction. Portland did not do so.

NCTA v. BrandX, No. 04-277, 545 U.S. __, Slip at 13 (S.Ct. June 27, 2005)


    [4] Under the statute, Internet access for most users consists of two separate services. A conventional dial-up ISP provides its subscribers access to the Internet at a "point of presence" assigned a unique Internet address, to which the subscribers connect through telephone lines. The telephone service linking the user and the ISP is classic "telecommunications," which the Communications Act defines as "the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received." 47 U.S.C. S 153(43). A provider of telecommunications services is a "telecommunications carrier," which the Act treats as a common carrier to the extent that it provides telecommunications to the public, "regardless of the facilities used." 47 U.S.C.S 153(44) & (46).
     [5] By contrast, the FCC considers ISP itself as providing "information services" under the Act, defined as "the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications." 47 U.S.C.S 153(20) (1996). As the definition suggests, ISPs are themselves users of telecommunications when they lease lines to transport data on their own networks and beyond on the Internet backbone. However, in relation to their subscribers, who are the "public" in terms of the statutory definition of telecommunications service, they provide "information services," and therefore are not subject to regulation as telecommunications carriers. See Federal-State Joint Board on Universal Service, 13 FCCR. 11501, PP BM, CB (1998) (report to Congress); cf. Child Online Protection Act, Pub. L. No. 105-277, S 1403(e)(4), 112 Stat. 2681 (1998) (codified at 47 U.S.C. S 231(e)(4)) & Internet Tax Freedom Act, Pub. L. No. 105-277, S 1101(e), 112 Stat. 2681 (1998) (reproduced at note to 47 U.S.C. S 151(e) (1998)) (defining Internet access services as: "a service that enables users to access content, information, electronic mail, or other services offered over the Internet, and may also include access to proprietary content, information, and other services as part of a package of services offered to consumers. Such term does not include telecommunications services."). Indeed, "information services"--the codified term for what the FCC first called "enhanced services"--have never been subject to regulation under the Communications Act. See Howard v. America Online, Inc., 208 F.3d 741, 752- 53 (9th Cir. 2000); see also 47 C.F.R. S 64.702(a); California v. FCC, 905 F.2d 1217, 1223-25 (9th Cir. 1990) (discussing history of "enhanced services" non-regulation).
-- AT&T v. Portland, Case Number 99-35609 (9th Cir. June 22, 2000).


        Cable Internet =/= Telecommunications Service

The Universal Service Order concluded that Internet service is not the provision of a telecommunications service under the 1996 Act.127  Under this precedent, a cable television system providing Internet service over a commingled facility is not a telecommunications carrier subject to the revised rate mandated by Section 224(e) by virtue of providing Internet service.  We note, however, that Congress has directed the Commission to undertake a review of the implementation of the provisions of the 1996 Act relating to universal service, and to submit a report to Congress no later than April 10, 1998.128  That report is to provide a detailed description of, among other things, the extent that the Commission's definition of "telecommunications" and "telecommunications service, and its application of those definitions to mixed or hybrid services, are consistent with the language of the 1996 Act.129 We do not intend, in this proceeding, to foreclose any aspect of the Commission's ongoing examination of those issues.
- In re Implementation of Section 703(e) of the Telecommunications Act of 1996: Amendment of the Commission's Rules
and Policies Governing Pole Attachments, 13 FCCR. 6777, 6794- 6796, para 33 (1998), aff 'd in part and rev'd in part sub nom. Gulf Power Co. v. FCC, 208 F.3d 1263 (11th Cir. 2000), rev'd sub nom. National Cable & Telecomm. Ass'n v. Gulf Power Co., 534 U.S. 327 (2002).

        Cable Internet =/= Cable Service

"Because Portland premised its open access condition on its position that [cable modem service] is a 'cable service' governed
by the franchise," id. at 876, we first looked to the statutory definition of "cable service." Noting that the "[t]he essence of cable service [as defined in the Act] . . . is one-way transmission of programming to subscribers generally," we concluded that "the definition does not fit" cable modem service, whose salient characteristics are "not one-way and general, but interactive and individual." Id. Because cable modem service was not a cable service under the terms of the Act, we held that "Portland may not directly regulate [it] through its franchising authority." Id. at 877.
-- BrandX v FCC, Sec. II,  9th Cir 10/6/2003



Because Portland premised its open access condition on its position that @Home is a "cable service" governed by the franchise, we begin with the question of whether the @Home service truly is a "cable service" as Congress defined it in the Communications Act. We conclude that it is not.
    -- AT&T v. Portland, Case Number 99-35609 (9th Cir. June 22, 2000).
       

          @Home

      [2] This definition does not fit @Home. Internet access is not one-way and general, but interactive and individual beyond the "subscriber interaction" contemplated by the statute. Accessing Web pages, navigating the Web's hypertext links, corresponding via e-mail, and participating in live chat groups involve two-way communication and information exchange unmatched by the act of electing to receive a one- way transmission of cable or pay-per-view television programming. And unlike transmission of a cable television signal, communication with a Web site involves a series of connections involving two-way information exchange and storage, even when a user views seemingly static content. Thus, the communication concepts are distinct in both a practical and a technical sense. Surfing cable channels is one thing; surfing the Internet over a cable broadband connection is quite another. Further, applying the carefully tailored scheme of cable television regulation to cable broadband Internet access would lead to absurd results, inconsistent with the statutory structure. For example, cable operators like AT&T may be required by a franchising authority to set aside cable channels for public, educational or governmental use, see 47 U.S.C. S 531, must designate some of their channels for commercial use by persons unaffiliated with the operator, see 47 U.S.C. S 532, and must carry the signals of local commercial and non-commercial educational television stations, see 47 U.S.C. SS 534 & 535. We cannot rationally apply these cable television regulations to a non-broadcast interactive medium such as the Internet. As our sister circuit concluded in the context of the abortive "video dialtone" common carrier television technology, regulating @Home as a cable service "simply makes no sense in any respect, and would be infeasible in many respects." National Cable Television Ass'n. v. FCC, 33 F.3d 66, 75 (D.C. Cir. 1994).
        -- AT&T v. Portland, Case Number 99-35609 (9th Cir. June 22, 2000).

    Cable Internet is a Cable Service

    At approximately the same time, a court in the Eastern District of Virginia invalidated a local ordinance that imposed open access requirements on cable modem service, concluding that cable modem involved a telecommunications component and that it also qualified as cable service. Mediaone Group, Inc. v. County of Henrico, 97 F. Supp. 2d 712, 714-15 (E.D. Vir. 2000), aff'd, 254 F.3d 356 (4th Cir. 2001). See also Gulf Power Co. v. FCC, 208 F.3d 1263, 1277 (11th Cir. 2000), rev'd, 534 U.S. 327 (2002) (holding that the FCC could not regulate pole attachments for internet services because they did not qualify as telecommunications services).
    -- BrandX v FCC, Sec. I, page 14757, 9th Cir 10/6/2003

    Section 541(c) provides that "[a]ny cable system shall not be subject to regulation as a common carrier or utility by reason of providing any cable service."  The MediaOne Virginia services that trigger application of the Henrico Ordinance are "cable service" as "(A) the one-way transmission to subscribers of (i) video programming, or (ii) other programming service, and (B) subscriber interaction, if any, which is required for selection or use of such video programming or other programming service."  47 U.S.C. § 522(6). MediaOne's Road Runner service contains news, commentary, games, and other proprietary content with which subscribers interact as well as Internet access, and therefore it falls under the statutory definition of "cable service."
    -- MediaOne Group, Inc. v. County of Henrico, 97 F.Supp.2d 712, 715 (E.D. Va. 2000)

    Cable Internet is Neither Cable Nor Telecom

The Supreme Court's recent decision in Nat'l Cable & Telecomm. Ass'n, Inc. v. Gulf Power Co., 534 U.S. 327 (2002) ("Gulf Power"),
handed down after our Portland decision but before the FCC's Declaratory Ruling, does not compel a different result. There the Court was faced with challenges to FCC orders determining the rents to be paid by cable and telecommunications service providers for the attachment of their wires to utility poles. The Court explicitly noted that the FCC had not yet categorized cable modem service and "address[ed] only whether pole attachments that carry commingled services are subject to FCC regulation at all." Id. at 338.
-- BrandX v FCC, Sec. III n. 13 9th Cir 10/6/2003


 See also Gulf Power Co. v. FCC, 208 F.3d 1263, 1277 (11th Cir. 2000), rev'd, 534 U.S. 327 (2002) (holding that the FCC could not regulate pole attachments for internet services because they did not qualify as telecommunications services).
-- BrandX v FCC, Sec. I, page 14757, 9th Cir 10/6/2003


    Although the statute includes interaction with other programming--in addition to video programming--within the definition of "cable service," we cannot read the language "other programming" broadly to include Internet services. "Other programming" has been part of the definition of "cable service" since 1978, when the Internet was only a tool for researchers and the military, not a commodity that would require regulation. When Congress used this language then, it could not have intended it to cover Internet services provided by cable companies. Again, we will not radically expand the scope of the definition of "cable service" from a video base to an all-interactive-services base without some substantive indication from Congress that this is indeed its intent. See Walters, 473 U.S. at 318, 105 S.Ct. at 3187.(32)
    Furthermore, as an aside, we note that the FCC, itself, has defined the Internet as an information service, not as a cable service. See In Re Fed.-State Joint Bd. on Universal Serv., 13 FCCR. 11501 ¶ 66 ("Internet service providers themselves provide information services.... "). Thus, the FCC lacks statutory authority to regulate the Internet under the 1996 Act based on the theory that Internet service is a cable service.
    The only remaining basis for the Commission's authority to regulate the Internet under the 1996 Act is to treat the Internet as a
telecommunications service. See 47 U.S.C. § 224(d)(3), (e) (directing the Commission to develop a rate for telecommunications carriers providing telecommunications service). The FCC, however, did not raise that argument before us. Nor could it have because the FCC has specifically said that the Internet is not a telecommunications service. See Report and Order, 13 FCCR. at 6795 ("The Universal Service Order concluded that Internet service is not the provision of a telecommunications service under the 1996 Act."); In Re Fed.-State Joint Bd. on Universal Serv., 12 FCCR. 87 ¶ 69 (1996) ("Internet service does not meet the statutory definition of a 'telecommunications service.' ").(33) Accordingly, there is no statutory basis for the FCC to regulate the Internet as a telecommunications service under the 1996 Act.
    In sum, Congress, in the 1996 Act, authorized the FCC to develop rent formulas for attachments providing cable and telecommunications services. Internet service does not meet the definition of either a cable service or a telecommunications service. Therefore, the 1996 Act does not authorize the FCC to regulate pole attachments for Internet service.
--Gulf Power Co. v. FCC, Sec. V. (11th Cir. 4/11/200)

      Deference to FCC


      As the preceding paragraph illustrates, the issue of the proper regulatory classification of cable modem service, such as Road Runner, is complex and subject to considerable debate. The outcome will have a marked effect on the provision of Internet services. The FCC, in its amicus brief, has diplomatically reminded us that it has jurisdiction over all interstate communications services, including high-speed broadband services. The FCC also advises us that it has initiated a proceeding, through a notice of inquiry, to examine classification and open access issues. See Inquiry Concerning High-Speed Access to the Internet Over Cable and Other Facilities, 65 Fed. Reg. 60,441 (2000). The FCC's notice seeks comment on whether cable modem technology should be classified as a cable service, a telecommunications service, or an information service, and it also seeks comment on the implications of adopting any particular classification. See In the Matter of Inquiry Concerning High-Speed Access to the Internet Over
      Cable and Other Facilities, No. 00-355, 2000 WL 1434689, P 15 (Sept. 28, 2000). In addition, the notice indicates that the FCC is
      interested in determining whether open access to cable modem platforms is necessary to further the "goals of promoting competition, deregulation, innovation, and the deployment of high-speed services." Id. P 32. Of course, the merits of open access are not before us. And, as we have already indicated, we do not have to reach the question of whether MediaOne's bundled Road Runner service is a cable service, a telecommunications service, or an information service. For the time being, therefore, we are content to leave these issues to the expertise of the FCC.
      Mediaone Group, Inc v. Henrico County , 2001 WL 788864, __ F.3d __, at 17 (4th Cir Jul. 21, 2001), available at http://pacer.ca4.uscourts.gov/cgi-bin/getopn.pl?OPINION=001680.P
       

Franchising Authority

    If Not Cable Service, then no Franchising Authority

Because we found that the transmission element of cable broadband service constitutes telecommunications service under the terms of the Communications Act - and because the Act provides that "[a] franchising authority may not impose any requirement under this title that has the purpose or effect of prohibiting, limiting, restricting, or conditioning the provision of a telecommunications service by a cable operator," 47 U.S.C. § 541(b)(3)(B) - we concluded that Portland and Multnomah county were barred from conditioning the franchise transfer upon AT&T's provision of open access to its broadband network. Portland, 216 F.3d 878-79.
-- BrandX v FCC, Sec. II.A.,  9th Cir 10/6/2003


Thus, because the Internet services AT&T provides through @Home cable modem access are not "cable services" under the Communications Act, Portland may not directly regulate them through its franchising authority.
-- AT&T v. Portland, Case Number 99-35609 (9th Cir. June 22, 2000).

    If Telecom Service, no authority

    (3)(A) If a cable operator or affiliate thereof is engaged in the provision of telecommunications services-- (i) such cable operator or affiliate shall not be required to obtain a franchise under this title for the provision of telecommunications services; and
    (ii) the provisions of this title shall not apply to such cable operator or affiliate for the provision of telecommunications services.
    (B) A franchising authority may not impose any requirement under this title that has the purpose or effect of prohibiting, limiting, restricting, or conditioning the provision of a telecommunications service by a cable operator or an affiliate thereof.
    (C) A franchising authority may not order a cable operator or affiliate thereof-- (i) to discontinue the provision of a telecommunications service, or
    (ii) to discontinue the operation of a cable system, to the extent such cable system is used for the provision of a telecommunications service, by reason of the failure of such cable operator or affiliate thereof to obtain a franchise or franchise renewal under this title with respect to the provision of such telecommunications service.
    (D) Except as otherwise permitted by sections 611 and 612, a franchising authority may not require a cable operator to provide any telecommunications service or facilities, other than institutional networks, as a condition of the initial grant of a franchise, a franchise renewal, or a transfer of a franchise. 47 U.S.C. § 541(b)(3).
No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.
47 U.S.C. § 253(a).
-  

Henrico County's open access provision violates the federal Communications Act, 47 U.S.C. S 541(b)(3)(D), by forcing MediaOne to provide its telecom- munication facilities (its cable modem platform) to any ISP as a condition for the County's approval of the transfer of control of the franchise.
Mediaone Group, Inc v. Henrico County , 2001 WL 788864, __ F.3d __ (4 Cir 7/12/01)
 

Subsection 541(b)(3) expresses both an awareness that cable operators could provide telecommunications services, and an intention that those telecommunications services be regulated as such, rather than as cable services.
[8] The Communications Act includes cable broadband transmission as one of the "telecommunications services" a cable operator may provide over its cable system. Thus, AT&T need not obtain a franchise to offer cable broadband, see 47 U.S.C. S 541(b)(3)(A); Portland may not impose any requirement that has "the purpose or effect of prohibiting, limiting, restricting or conditioning" AT&T's provision of cable broadband, see 47 U.S.C. S 541(b)(3)(B); Portland may not order AT&T to discontinue cable broadband, see 47 U.S.C. S 541(b)(3)(C); and Portland may not require AT&T to provide cable broadband as a condition of the franchise transfer, see 47 U.S.C. S 541(b)(3)(D). Therefore, under the several provisions of S 541(b)(3), Portland may not regulate AT&T's provision of @Home in its capacity as a franchising authority, and the open access condition contained in the franchise transfer agreement is void.
-- AT&T v. Portland, Case Number 99-35609 (9th Cir. June 22, 2000).
 

The Henrico Ordinance requires MediaOne Virginia to provide telecommunications facilities.  This requirement is an unlawful condition placed upon the transfer of control of MediaOne Virginia, the holder of a Henrico County cable franchise. . . . The Henrico Ordinance requires MediaOne to provide "its cable modem platform" facility to any requesting ISPs "unbundled from the provision of content" which the ISPs themselves supply.  Ordinance  1(c), 2. Under the Ordinance, MediaOne would be forced to operate its cable modem platform to provide transmission between the points selected by requesting ISPs and their customers, without change in content.  The County is therefore requiring MediaOne to provide a telecommunications facility as a condition for the approval of the transfer of control, and accordingly, the Ordinance is in violation of Section 541(c)(3)(D).
-- MediaOne Group, Inc. v. County of Henrico, 97 F.Supp.2d 712, 714 (E.D. Va. 2000)

Sec. 544 Transmission Tech

In 1996, Congress enacted the current version of Section 544(e) which provides that "... [n]o State or franchising authority may prohibit, condition, or restrict a cable system's use of any type of subscriber equipment or any transmission technology."  Although the exact technology required cannot be determined from the record, in order to provide access to multiple ISPs, MediaOne Virginia would have to make technological modifications to its current system.  Accordingly, the Henrico Ordinance requires MediaOne Virginia to use some kind of multiple access technology and equipment that will accommodate requesting third-party ISPs if MediaOne Virginia itself decides to offer Road Runner.  Because of this requirement, the Ordinance violates Section 544(e) and therefore the Ordinance is preempted by Section 544(e).
-- MediaOne Group, Inc. v. County of Henrico, 97 F.Supp.2d 712, 715 (E.D. Va. 2000)

If Cable, Then Cant Impose Common Carrier Regulation

The district court held that the open access provision is inconsistent with 47 U.S.C. S 541(b)(3)(D) because it would require MediaOne to provide telecommunications facilities as a condition for approving transfer of control of MediaOne's cable franchise to AT&T. See MediaOne Group, Inc. v. County of Henrico, 97 F. Supp. 2d 712, 714 (E.D. Va. 2000). Section 541(b)(3)(D) says that "a franchising author- ity may not require a cable operator to provide any telecommunica-
tions service or facilities, other than institutional networks, as a condition of the initial grant of a franchise, franchise renewal, or a  transfer of a franchise." 47 U.S.C. S 541(b)(3)(D) (emphasis added). The term "telecommunications" is defined as"the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the informa- tion as sent and received." Id. S 153(43). Although the Communica-
tions Act does not define the word "facilities" as used in "telecommunications facilities," it is evident from the language of the statute that these facilities are the physical installations or infrastruc- ture necessary for transmission.
. . . . .
As a condition for approving the change in control of the MediaOne franchise, the County required MediaOne to provide its "cable modem platform (unbundled from the provision of content)" to "any requesting Internet Service Provider." The provision unbundles Road Runner's Internet access service from its cable modem platform and compels MediaOne to offer the platform to unaffiliated ISPs for use as a transmission pipeline for their services. The open access provision therefore requires MediaOne to provide "telecommunications . . . facilities . . . as a condition of . . . a transfer of a franchise" in violation of S 541(b)(3)(D).
. . . . .
The County and Verizon argue that even if the cable modem platform is a telecommunications facility, S 541(b)(3)(D) still does not outlaw the open access provision. Section 541(b)(3)(D), they say, only prohibits localities from requiring cable operators to construct new telecommunications facilities, and the provision here does not impose any such requirement. That argument ignores the statute's plain language. Again, S 541(b)(3)(D) declares that franchising authorities may not require cable operators "to provide any telecommunications . . . facilities" as a condition to the transfer of a franchise.
The section does not limit itself to new construction. Rather, it bars any condition that requires a cable operator to provide telecommunications facilities regardless of whether the facilities are in existence or must be built.
Mediaone Group, Inc v. Henrico County , 2001 WL 788864, __ F.3d __, at 14 (4th Cir 7/12/01)
 
 

We simply hold that Henrico County violated S 541(b)(3)(D) when it conditioned the transfer of control of MediaOne's cable franchise by requiring MediaOne to unbundle its Road Runner service and provide open access to its telecommunications facilities, that is, its cable modem platform.
Mediaone Group, Inc v. Henrico County , 2001 WL 788864, __ F.3d __ (4th Cir Jul. 21, 2001), available at http://pacer.ca4.uscourts.gov/cgi-bin/getopn.pl?OPINION=001680.P
 
 

While Congress adopted certain narrowly defined requirements that set aside particular numbers of cable system channels for particular numbers of cable system channels for particular kinds of programming, [FN2] Congress prohibited regulatory bodies from adopting access requirements for any additional types of video programming. [FN3]  Congress enacted Section 541(c) to prevent the FCC, the states, or the local franchising authorities from imposing any other access, carriage, or related requirements.  In adopting Section 541(c), Congress recognized that the provision would prohibit imposition of "the traditional common carrier requirement of servicing all customers indifferently upon request."  HRRep No. 98-934, at 60 (1984). Congress determined that the demand of consumers for diverse sources of programming should be best met if "a cable company's owners, not government officials, ... decide what sorts of programming the company would provide." United Video, Inc. v. FCC, 890 F.2d 1173, 1189 (D.C.Cir.1989).

FN2. See 47 U.S.C. § 531 (cable channels for public, educational, and governmental use);  47 U.S.C. § 532 (cable channels for commercial use);  47 U.S.C. § 534 (carriage of local commercial television  signals);  47 U.S.C. § 535 (carriage of noncommercial educational television).FN3. See 47 U.S.C. § 532(b)(2) ("Any Federal agency, State, or franchising authority may not require any cable system to designate channel capacity for commercial use by unaffiliated persons in excess of the capacity specified [herein]").
The Henrico Ordinance violates Section 541(c)'s prohibition against  "regulation as a common carrier or utility by reason of providing any cable service."  The Ordinance subject MediaOne Virginia to forced access requirements "by reason of" its provision of its MediaOne Road Runner cable service.  By reason of its provision of cable modem services, the Ordinance would require MediaOne Virginia to provide indiscriminate access to its facilities to all ISPs on set terms and conditions.  Courts have uniformly held that a requirement that a cable system carry the programs or services of a specified category of users is a prohibited common carrier regulation.  For example, in FCC v. Midwest Video Corp., 440 U.S. 689, 99 S.Ct. 1435, 59 *716 L.Ed.2d 692 (1979), the Supreme Court invalidated FCC rules that required cable operators to set aside four channels for use by particular programmers.  The Supreme Court reasoned that these earlier "forced access" requirements were common carrier regulations, because they deprive the firm of the right held by a private carrier "to make individualized decisions, in particular cases, whether and on what terms to deal." Id. at 701, 99 S.Ct. 1435.  Numerous other courts, [FN4] as well as Congress, [FN5] and the FCC  [FN6] have similarly held that requirements that cable systems provide access to third parties constitute prohibited common carrier regulations.
    FN4. See, e.g., Value Vision Intl., Inc. v. FCC, 149 F.3d 1204, 1206 (D.C.Cir.1998) (leased access requirements place the cable operator "in the position of a common carrier");  Alliance for Community Media v. FCC, 56 F.3d 105, 123 (D.C.Cir.1995) (en banc) rev'd on other grounds sub nom.  Denver Area Educ. Telecomms. Consortium, Inc. v. FCC, 518 U.S. 727, 116 S.Ct. 2374, 135 L.Ed.2d 888 (1996) (requirements for access by public, educational, local governmental, and nonaffiliated commercial users impose " 'common-carrier obligations on cable operator' ").
    FN5. See, e.g., Columbia Broad. Sys., Inc. v. Democratic Nat'l Comm., 412 U.S. 94, 104-110, 93 S.Ct. 2080, 36 L.Ed.2d 772 (1973) (setting forth legislative history in which Congress recognized that requiring a broadcast station to provide nondiscriminatory access to its facilities by political candidates would render it a common carrier).
    FN6. See, e.g., Transfer of Control of Licenses and Section 214 Authorizations from Tele-Communications, Inc. To AT & T Corp., 14 FCC Rcd 3160,  29 (1999) ("Commenters advocating [access by multichannel video programming distributors to cable capacity] rely on the open access rules applicable to common carriers and seek to expand those requirements beyond traditional common carrier functions.  We continue to recognize and adhere to the distinctions Congress drew between cable and common carrier regulation" and deny the request.)
Similarly, the Henrico Ordinance requiring MediaOne Virginia to provide indiscriminate access to its cable facilities to all ISPs is prohibited common carrier regulation.  Under the Ordinance, MediaOne Virginia would be unable to make individualized decision whether to share capacity on its respective cable systems with any one or more ISP and on what terms.  Additionally, MediaOne Virginia would have no control over what content the other ISPs would offer. Accordingly, the Ordinance is forbidden common carrier regulation under Section 542(c).
-- MediaOne Group, Inc. v. County of Henrico, 97 F.Supp.2d 712, 715 (E.D. Va. 2000)

If Cable then No Programming Regulation


 In addition to the Act's ban on common carrier requirements, Section 544(f)(1) provides that "[a]ny Federal agency, State or franchising authority may not impose requirements regarding the provision or content of cable services, except as expressly provided in [Title VI]." 47 U.S.C. § 544(f)(1) (emphasis added).  This Section prohibits any statutory interference with programming and related decisions of cable operators.  Time Warner Cable v. City of New York, 943 F.Supp. 1357, 1367, 1399 (S.D.N.Y.1996), aff'd sub nom.  Time Warner Cable v. Bloomberg L.P., 118 F.3d 917 (2d Cir.1997). According to the Ordinance, MediaOne Virginia and AT & T may not offer Road Runner unless they allow any other requesting ISP to connect with MediaOne Virginia's cable systems no later than December 31, 2000.  MediaOnes Virginia's "provision" of the MediaOne Road Runner cable service is what triggers the Ordinance's forced access requirements.  Additionally, the forced access ordinance requires MediaOne Virginia to transmit the "content" of other ISPs. Accordingly, the Ordinance's imposition of requirements regarding both the "provision" and the "content" of cable services violated Section 544(f)(1).
-- MediaOne Group, Inc. v. County of Henrico, 97 F.Supp.2d 712, 716 (E.D. Va. 2000)
 

Regulatory Proceedings

Internet over Cable NOI

In part as a response to these decisions, the FCC on September 28, 2000 issued a notice of inquiry, In the Matter of Inquiry Concerning High-Speed Access to the Internet over Cable and Other Facilities. 15 FCCR. 19287, available at 2000 WL 1434689 (hereinafter "NOI"). In the NOI, the FCC announced its intention "to determine what regulatory treatment, if any, should be accorded to cable modem service and the cable modem platform used in providing this service." Id. at 19287. Specifically, the FCC requested comment on whether it should classify "the cable modem platform as a cable service[6] subject to Title VI [of the Communications Act]; as a telecommunications service[7] under Title II; as an information service[8] subject to Title I; or some entirely different or hybrid service subject to multiple provisions of the Act." Id. at 19293. In requesting comment, the FCC noted that "[i]t is particularly important to develop a national legal and policy framework in light of recent federal court opinions that have classified cable modem service in varying manners." Id. at 19288.
       On March 15, 2002, after receiving some 250 comments and meeting with a variety of industry representatives, consumer advocates, and state and local government officials regarding the NOI, the FCC issued its Declaratory Ruling along with a notice of proposed rulemaking ("NPRM"). In the Ruling, the Commission concluded that "cable modem service, as it is currently offered, is properly classified as an interstate information service, not as a cable service, and that there is no separate offering of telecommunications service." Declaratory Ruling, 17 FCCR. at 4802. The FCC's classification of cable modem service, if upheld, would mean that, to the extent they provide such service, cable operators would be subject to regulation not as cable service providers under Title VI of the Act, 47 U.S.C. § 521 et seq., nor as common carriers under Title II, § 201 et seq., but rather as providers of an information service under the less stringent provisions of Title I, § 151 et seq. Accordingly, in the NPRM that accompanied the NOI, the Commission sought to "address the regulatory implications of [its] decision." 17 FCCR. at 4839. Specifically, FCC requested comments regarding (1) the implications of the classification for the Commission's parallel rulemaking
with respect to DSL service;9 (2) the scope of the Commission's jurisdiction to regulate cable modem service, including whether there are any constitutional limitations on the exercise of that jurisdiction; (3) the need, if any, to require cable operators to provide access to competing ISPs; (4) the effects of the regulatory classification on the marketplace for and the continued deployment of broadband service; (5) "the role of state and local franchising authorities in regulating cable modem service"; and (6) "the relationship between our classification determination and statutory or regulatory provisions concerning pole attachments, universal service, and the protection of subscriber policy." Id. at 4839-40.
-- BrandX v FCC, Sec. I, page 14757, 9th Cir 10/6/2003

Section 706 Proceeding

    100. In the Notice, we asked generally about the kinds of regulatory structures that would best foster the deployment of broadband and that would best fit the consumer broadband market.229 Few comments addressed these general questions, but many addressed one specific regulatory issue, whether Internet service providers should be given rights of access to broadband systems operated by cable television companies. Many commenters took strong positions favoring230 or opposing231 the placing of such an obligation on cable television operators.
    101. We note, as a preliminary matter, that our duty to encourage broadband deployment of advanced services requires us to look broadly at all methods of providing additional bandwidth to customers, not just those methods provided by cable companies or other particular types of service providers. We observe further that the record, while sparse, suggests that multiple methods of increasing bandwidth are or soon will be made available to a broad range of customers. On this basis, we see no reason to take action on this issue at this time. We will, however, continue to monitor broadband deployment closely to see whether there are developments that could affect our goal of encouraging deployment of broadband capabilities pursuant to the requirements of section 706.
229 Notice, supra note 11, 13 FCC Rcd at 15308-11.
230 See Comments of America Online, Inc., at 9-11; Comments of GTE at 17 n.44; Comments of Virtual Hipster at 3; Comments of the Rural Policy Research Inst. at 4; Reply Comments of America Online, Inc., passim; Reply Comments of Broadcast.com at 4; Reply Comments of Center for Media Education et al. at 9; Reply Comments of the Internet Service Providers' Consortium at 5; Reply Comments of Mindspring Enterprises, Inc., at 14-23. The Rural Policy Research Institute advocates unbundling for "all competitors . . . where necessary." [Italics in original.] Two parties call for ISPs to have the same rights vis a vis incumbent LECs as competitive LECs. Comments of Verio Inc., at 3-4; Reply Comments of the Coalition of Utah Ind. Internet Service Providers at 6-7.
231 See Comments of AT&T Corp. at 38-42, citing B. Esbin, Internet Over Cable: Defining the Future in Terms of the Past, Commission Office of Plans & Policy Working Paper #30 (Aug. 1998); Comments of Comcast Corp. at 2, 8, 16-17 & nn.28-29; Comments of National Cable Television Ass'n at ii; Comments of the Progress & Freedom Foundation at 8-9, 27; Reply Comments of AT&T Corp. at 13-16; Reply Comments of At Home Corp. at 14-15; Reply Comments of Comcast Corp. at 17-24 & n.35 at 18; Reply Comments of Cox Commun., Inc., at 5-7.
--In re Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, Report, CC Docket No. 98-146 (February 2, 1999).

FCC

The FCC also considered the issue of Internet access in considering the merger of AT & T, at the time the nation's largest long distance telephone provider, and Telecommunications, Inc., one of the largest cable television operators. In its order approving the transfer of licenses from TCI to AT & T, the FCC rejected any open access condition, citing the emergence of competing methods of high speed Internet access.   It found "that the equal access issues raised by the parties to this proceeding do not provide a basis for conditioning, denying, or designating for hearing any of the requested transfers of licenses and authorizations."   See Applications for Consent to the Transfer Control of Licenses and Section 214 Authorizations from TCI to AT & T, 14 FCC Rcd. 3160, 1999 WL 76930 (Feb. 18, 1999) ("Transfer Order").   The FCC concluded that "while the merger is unlikely to yield anti-competitive effects, we believe it may yield public interest benefits to consumers in the form of a quicker roll-out of high-speed Internet access services."   Id. at § 94.
Comcast Cablevision of Broward Country, Inc., v. Broward County, Florida, 124 F.Supp.2d 685, 689 (SDFl Nov. 8, 2000)
 

Bottleneck

In October 1999, the Cable Services Bureau of the FCC released a report on the state of the broadband industry.   With respect to broadband cable access, the Report concluded:
[T]he Bureau is not persuaded that consumers are at risk of cable establishing a bottleneck monopoly in broadband services in the absence of immediate regulatory action.   There have been no developments since the release of the Section 706 Report earlier this year to alter the Commission's conclusion that no monopoly exists.   Moreover the monopoly argument wrongly assumes that cable is the only viable broadband pipe available in the near term to provide Internet access to the home.   As deployment of DSL, satellite and wireless advances in large part spurred by rapid cable modem deployment, consumers will have alternative platforms to use for high-speed data access, telephony and video services.   We have already seen evidence that these alternative technologies are attracting new subscribers at an exponential rate, and that prices for these new services are falling.
  Broadband Today, supra, at 42.
Comcast Cablevision of Broward Country, Inc., v. Broward County, Florida, 124 F.Supp.2d 685, 689 (SDFl Nov. 8, 2000)

Broadband

Bottleneck

     Moreover, differential treatment is not justified by some special characteristic of the medium being regulated.   In Turner I, the Supreme Court found that when an individual subscribes to cable, the physical connection between the television set and the cable network gives the cable operator bottleneck or gatekeeper control over most (if not all) of the television programming that is channeled into the subscriber's home.  512 U.S. at 656, 114 S.Ct. at 2466.   According to the Court, cable operators possessed "bottleneck monopoly" power that threatened the "viability of broadcast television."  Id. at 661, 114 S.Ct. at 2468.   This was the reason the Court found Tornillo not to control the must-carry provisions.
      Cable operators control no bottleneck monopoly over access to the Internet.   Today, most customers reach the Internet by telephone.   Those who obtain access through cable can use the Internet to reach any Internet information provider.   After inquiry, the FCC has concluded that it does not foresee monopoly, or even duopoly in broadband Internet services.   See Advanced Services Report.   The "bottleneck" theory offers no justification for less than heightened scrutiny of the Broward County ordinance.
Comcast Cablevision of Broward Country, Inc., v. Broward County, Florida, 124 F.Supp.2d 685, 696 (SDFl Nov. 8, 2000)
 

 However, the harm the ordinance is purported to address appears to be non- existent.   Cable possesses no monopoly power with respect to Internet access. Most Americans now obtain Internet access through use of the telephone.   Local telephone companies provide dial up Internet access to over 46.5 million customers, whereas all cable companies combined currently provide Internet services to only about two million customers.   See G. Arlen, 11% First-Quarter Growth Lifts U.S. Online Audience to 50.27 Million Customers, 5% Use High Speech Access, Telecom Reports Int'l (April 2000) (available at www.tr.com).   The FCC has predicted that traditional telephone lines "will remain the principal means of accessing the Internet" in the near term. Broadband Today at 23.   AOL, the most dominant ISP with over 24 million subscribers, and other predominantly dial-up ISPs have more than 90% of residential Internet users as customers.   See id. at 32.
        With respect to advanced telecommunications capability or broadband, the FCC estimated that there were approximately one million subscribers as of December 31, 1999.   Of these, approximately 875,000 subscribed to cable based services, 115,000 subscribed to asymmetric DSL, with the remaining attributed to other media.   Since late 1998, cable increased subscribers approximately three-fold and local telephone companies increased their DSL subscribership approximately four-fold.   See FCC News Release:  FCC Issues Report on the Availability of High-Speed and Advanced Telecommunications Services, 2000 FCC Lexis 4041 (Aug. 3, 2000).
       The FCC, the agency charged by Congress with the responsibility of monitoring the deployment of broadband technology, has concluded that the preconditions for monopoly in the consumer market for broadband appear absent.   According to the FCC, there are, or likely will soon be, a large number of potential entrants into the residential market using different technologies such as DSL, cable modems, and utility fiber to the home, satellite, and radio.   The FCC does not foresee the consumer market for broadband becoming a sustained monopoly or duopoly.   See Advanced Services Report at § 48, 52.
         In contrast to the FCC, Broward County has conducted no inquiry.   The County has proffered no substantial evidence demonstrating that actual harm exists that could justify infringement of First Amendment interests.  "[T]he mere assertion of a dysfunction or failure in a speech market, without more is not sufficient to shield a speech regulation from the First Amendment ...." Turner I, 512 U.S. at 640, 114 S.Ct. at 2458.   It has not been demonstrated that the Broward County ordinance furthers a substantial governmental interest.   Therefore, even applying content-neutral intermediate scrutiny, the ordinance violates the First Amendment.
-- Comcast Cablevision of Broward Country, Inc., v. Broward County, Florida, 124 F.Supp.2d 685, 697-98 (SDFl Nov. 8, 2000)

Content

First Page

TCI and MediaOne acquire or produce news, information, and advertising content and publish it on the respective "first pages" of the @Home and RoadRunner services they offer subscribers.   The "first page" is the default screen that TCI and MediaOne subscribers see when they access TCI's @Home or MediaOne's RoadRunner service.
      All subscribers to the @Home or RoadRunner programming receive and are exposed to the "first page" and its content when they initially access the service. This is also the case each time thereafter, unless the subscriber changes the "first page."
     @Home and RoadRunner subscribers can change the "first page" they see when they access the Internet from MediaOne's "first page," for example, to America Online's or any other ISP's. However, most @Home and RoadRunner subscribers choose to retain the "first pages" produced by TCI and MediaOne as their default start-up screen.
     TCI and MediaOne both sell the right to advertise on their "first pages" and use the revenues to subsidize the transmission cost of their cable modem services.
Comcast Cablevision of Broward Country, Inc., v. Broward County, Florida, 124 F.Supp.2d 685, 690 (SDFl Nov. 8, 2000

DSL Broadband Proceeding

Background (how things have changed)

35. We note at the outset that the Computer Inquiry line of decisions was initiated at a time when very different legal, technological and market circumstances presented themselves to the Commission. First and foremost, the Telecommunications Act of 1996 introduced a mandate that the Commission promote competition, deregulation and innovation wherever possible in the communications market.  The Act clearly evidences Congress' intent to involve as many potential providers as possible to bring consumers the benefits of newer, better and more cost-effective products and services.  Moreover, the Act introduced for the first time a number of core statutory-based policy objectives associated with the development of the Internet and the deployment of advanced services.
    36. Second, with respect to technology, the core assumption underlying the Computer Inquiries was that the telephone network is the primary, if not exclusive, means through which information service providers can obtain access to customers.  This network was optimized primarily to carry voice traffic and narrowband data applications, such as voicemail.  Yet now information service providers may access customers over a variety of network platforms, such as cable, wireless and satellite.  Some of these platforms are broadband, rather than narrowband, and they carry traffic to and from companies, educational institutions, organizations and other users through a global interconnected packet-switched network called the Internet.  This technology allows users to interact with media, with information and with each other in ways and at speeds that were scarcely considered when the Computer Inquiry was begun.
    37. Third, the technological evolution that enabled other network platforms to be used to provide information service enabled cable, wireless and satellite providers to begin to compete with the telephone network.  In the broadband arena, the competition between cable and telephone companies is particularly pronounced, with cable modem platforms enjoying an early lead in deployment.  In the context of this competition, telephone companies and various Internet and technology companies have begun to advocate that the Commission take steps that, to the extent the Act allows, would reduce the regulatory burdens and regulatory uncertainties the telephone companies face, and thereby provide incentives for those companies to continue or accelerate their investments in critical broadband infrastructure.
--In Re Appropriate Framework for Broadband Access to the Internet over Wireline Facilities, CC Docket No. 02-33, CC Dockets Nos. 95-20, 98-10, NPRM (February 15, 2002) http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-02-42A1.doc