Copyright 2002 Denver Publishing Company  
Rocky Mountain News (Denver, CO)
March 15, 2002 Friday Final Edition
SECTION: BUSINESS; Pg. 3B

LENGTH: 717 words

HEADLINE: REGULATORS BACK CABLE PROVIDERS;
OPERATORS NOT REQUIRED TO SHARE THEIR LINES, UNLIKE SITUATION FACED BY TELEPHONE COMPANIES

BYLINE: Steve Caulk, News Staff Writer

BODY:
The cable companies can keep their networks to themselves, with the blessing of the Federal Communications Commission.

The regulatory agency ruled Thursday that cable operators such as AT&T Broadband in Arapahoe County are not required to share their lines with competing companies. In a 3-1 vote, the FCC decided that the cable companies needed the exclusive arrangement to inspire additional investment in the infrastructure providing high-speed Internet access to customers.

AT&T, which had argued on behalf of non-regulation on the issue of "open access," expressed satisfaction with Thursday's ruling.

"The FCC has taken an important step to help clear up lingering regulatory issues about cable modem service, and we look forward to participating in the process as the FCC's examination moves ahead," the company said in a prepared statement. "In the meantime, AT&T Broadband is making good on its longstanding commitment to offer consumers a choice of ISPs (Internet service providers) on its cable systems."

Coincidentally, AT&T announced an agreement with Earthlink Tuesday that will put Earthlink's Internet portal on AT&T's cable systems. Customers in Boston and Seattle will have a choice between Earthlink and AT&T's own Broadband Internet service. AT&T says it is also negotiating with other prospective partners.

Colorado telecommunications consultant Doug Hanson speculated that the AT&T-Earthlink deal might have been politically motivated.

"Maybe that's the reason AT&T Broadband reached an agreement with Earthlink, to mitigate any adversity or opposition that was on the commission," said Hanson, former chairman of Comptel, an association of competitive telecommunication carriers in Washington, D.C.

He said he doesn't believe the FCC ruling puts an end to the issue and that objecting parties might appeal through the courts.

AT&T is the largest cable company in the nation, with 13.6 million video subscribers and 1.5 million high-speed Internet customers. The second largest company, AOL Time Warner, has already adopted open access in partnership with Earthlink in 24 markets. Time Warner agreed to open its systems to multiple ISPs as a condition of the merger with AOL.

Telecommunication companies, subject to regulations that open telephone networks to competitors, had argued that the cable companies should be forced to adhere to the same policy. Denver-based Qwest has sought access to AT&T's cable network to offer high-speed Internet access to customers where the alternate DSL (digital subscriber line) service is unavailable, but AT&T has rebuffed those overtures.

The FCC ruled Thursday that Internet access via cable is an "information service" rather than a telecommunications service.

"The classification of cable modem service as an information service and not a telecommunications service sends a strong signal that cable Internet services will be able to continue to develop in a business environment that favors competition over regulation, and encourages new investment," said Robert Sachs, president and chief executive officer of the National Cable and Telecommunications Association. "The (FCC) traditionally hasn't regulated information services."

DSL technology, however, has been classified as a telecommunications service. While Qwest offers its own DSL product, the company also opens its network to other companies wishing to sell DSL services. Many DSL companies have experienced financial difficulties and closed their doors, partly blaming an uncooperative attitude by Qwest.

Qwest said it would like to see the FCC treat DSL the way it does cable.

"Although it's good to see that the FCC is moving away from regulation toward a market-based approach," said Steve Davis, Qwest's senior vice president for policy and law, "it's critical that it quickly complete the process by eliminating the significant regulatory constraints from DSL services."

Michael Copps was the lone dissenting voice in Thursday's ruling, saying the industry requires some guidance to ensure proliferation of ISP choice.

"It strikes me as ironic that without such a requirement the Internet - which grew up on openness - may become the province of dominant carriers, able to limit access to their system to all but their own ISPs," he said.

LOAD-DATE: March 16, 2002