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Tuesday, December 7, 2004

Options narrowed, for now
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The Supreme Court dealt another good hand to promoters of investment in competing broadband networks. Yesterday, the Court declined to review a decision in which the 9th Circuit U.S. Court of Appeals rejected cities' attempts to regulate cable modem service by treating cable modem service like cable companies' core video service. Regulation as a "cable service" would have subjected companies' broadband service to inconsistent, potentially onerous and possibly nonsensical obligations. For example, does the frequency range over which cable operators transmit cable modem signals over their networks constitute one or more "cable channels" for regulatory purposes and, if so, does that mean operators could be required, as with cable service, to feature "public access" or broadcast TV programming? Would operators have to scramble or block cable modem service to those using it primarily to view sexually explicit material, as is true for some cable channels?

But cities' most likely aims are to impose so-called "open access" or "net neutrality" mandates in favor of Internet service providers and content companies that have not bothered to build their own broadband networks. Oh, and, treating broadband like cable service would give cities more leverage under the Communications Act to squeeze higher fees from operators for the same use of public rights-of-way. Any of these scenarios would result in litigation or other costs that would either be passed on to consumers or would ultimately slow operators' investment in new services and capabilities. Although local governments have a few more legal arrows in their quiver, for now the battle to classify cable modem service under the Act will focus primarily on whether it should be treated as a heavily-regulated phone service or a largely unregulated "information service," as I discussed previously.

posted by Kyle Dixon @ 11:37 AM | Broadband

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