FCC Opens Self-Examination Session
09/28/00, 5:21 p.m. ET) By Mary Mosquera, TechWeb News
The Federal Communications Commission opened an inquiry Thursday into its policy on open access to high-speed networks while simultaneously wrestling with the AOL-Time Warner merger.
Open access to unaffiliated Internet providers goes to the heart of regulators' concerns about the proposed maga-merger between America Online Inc. (stock: AOL), Dulles, Va., and Time Warner Inc. (stock: TWX), New York.
The inquiry comes shortly before regulators are expected to complete their review of the merger next month.
"You should not be tying the AOL-Time Warner merger to this inquiry," an FCC official who did not want to be identified told reporters in a conference call. "They are two separate proceedings."
AOL, Time Warner, and AT&T Corp. (stock: T), New York, have said they're committed to open access on their cable networks.
But conflicting court opinions around the country spurred the FCC to take another look at its own policy.
"Conflicting court cases have resulted in some uncertainty and confusion in the marketplace," the official said.
In particular, the Ninth Circuit Court of Appeals ruled that local governments could not force open access on cable operators in Portland, Ore., but also said high-speed Internet access over cable could be considered a telecommunications service.
FCC Chairman William Kennard said after the Portland ruling that the FCC would review its policy on open access.
The FCC has preferred to take a wait-and-see attitude to allow cable companies to open their networks because of market pressure.
"Our policy has placed a high priority on new investment, competition, voluntary market-based initiatives toward openness, and avoiding multiple conflicting forms of regulation," Kennard said in a statement Thursday. "Recent court opinions have categorized cable modem service in differing manners, which brings home the need for a national framework for treatment of such services."
Local telephone carriers must open their high-speed networks to competitors. Cable networks, which are regulated differently, are not required to allow multiple providers access to cable lines.
The FCC has had a policy of "vigilant restraint" on cable broadband, monitoring the market closely. There are no regulations or policy for wireless or satellite providers on open access, the FCC said.
But if cable broadband is a telecommunications service, it would then be required to follow the same regulations as telephone carriers, analysts say.
"It is unclear whether a marketplace solution will develop, absent some form of intervention," Kennard said. "Through this inquiry, we need to determine whether a regulatory response is appropriate to ensure that this exciting new technology develops the open competition and innovation that we cherish in the Internet."
The FCC's inquiry will take about three months, during which the public, companies, or any interested parties can send comments to the regulator.
The FCC hopes to develop a record of legal issues and marketplace developments, consider whether a national policy should be established, define cable modem services, and review whether it should cut back on some existing regulations, namely on telephone carriers deploying DSL, technology.
Notices of inquiry are often the first step to further regulation, but new rules may not be needed, an FCC official said.
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