04.04.2004 12:00 PM
Court orders cable to open broadband to rivals

A federal appeals court in San Francisco, CA, has reaffirmed an October 2003 ruling that cable TV operators must open their wires to rivals who want broadband Internet services. The decision could subject cable operators to the same rules as local phone companies who are forced to lease their lines to rival providers of phone service and DSL Internet access.

The FCC asked the 9th U.S. Circuit Court of Appeals to revisit the decision, but the court declined to do so last week. Now the FCC must decide whether to appeal to the U.S. Supreme Court’s decision.

Currently, the vast majority of the 16 million homes that get high-speed Internet service over cable lines can subscribe only to the service offered by their local cable provider. Cable companies can bar competitors from their lines as a result of federal rules that treat cable systems differently from telephone companies, which must share their wires.

But last October, the appeals court ruled that the FCC erred when it found that cable's high-speed Internet offering was an "information service" rather than a "telecommunications service." The distinction is important because telecommunications services must share their networks with rivals, while information services do not.

The court's decision was a huge victory for consumer groups that challenged the pro-industry policies of FCC Chairman Michael Powell.

The original case was brought by a group of Internet service providers who claimed they were unfairly blocked from reaching millions of cable subscribers.

The National Cable and Telecommunications Association, a trade group that represents large cable companies, issued a statement saying it was disappointed in the decision and called on the FCC to seek an appeal to the U.S. Supreme Court.

Powell also expressed disappointment in the court's action, but did not say whether he would support an appeal to the Supreme Court. He said the decision "prolongs uncertainty to the detriment of consumers."

Powell argued that cable companies should not be subject to the same rules as telephone companies because such requirements would inevitably give the companies less incentive to invest in building networks that can compete with the telephone giants. But smaller Internet service providers and consumer groups say that unless cable is forced to share its data lines, the industry will have unilateral control of the flow of information to millions of homes.

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