Cable firms told to share broadband

Appeals court rejects exclusivity FCC allowed

October 07, 2003|By Jube Shiver Jr. | Jube Shiver Jr.,LOS ANGELES TIMES

WASHINGTON - In a decision that could spur new competition, a federal appeals court yesterday struck down rules allowing cable TV operators to bar rivals from offering high-speed Internet access on their networks.

The 9th U.S. Circuit Court of Appeals in San Francisco ordered the Federal Communications Commission to treat cable high-speed Internet access similar to the way it treats broadband on telephone networks.

Phone companies must allow competing Internet service providers - such as EarthLink Inc., AOL Time Warner Inc.'s America Online and Microsoft Corp. - to sell high-speed access over their systems.

The ruling, which the FCC said it would appeal, represents another legal setback for the agency, which in the past two years has seen media ownership rules and some cable TV regulations overturned.

FCC Chairman Michael K. Powell said the latest court ruling throws "a monkey wrench into the FCC's efforts to develop a vitally important national broadband policy."

Powell has said that giving cable companies the exclusive right to sell high-speed access over their lines encourages investment in new technologies.

But EarthLink said the decision would lower broadband prices and spur innovation.

"This is a big victory for consumers," said David Baker, vice president for legal and regulatory affairs at EarthLink. "The practical result of this decision is that cable broadband will be required to offer us and any other ISP [Internet service provider] the ability to offer broadband to their customers."

EarthLink was a plaintiff in the case along with the California Public Utilities Commission and several consumer groups.

"Giving consumers a choice of Internet service providers would open the door to more competition, and let people choose services with better privacy and less spam," said Chris Murray, legislative counsel for Consumers Union.

Yesterday's decision comes more than a year after the FCC permanently exempted cable companies from a 1996 federal law that requires telecommunications carriers to open their networks to rivals. Instead, the agency classified cable broadband as an unregulated "information service," leaving cable operators free to close their networks to competitors.

But a three-judge panel of the court "found that the transmission element of cable broadband service constitutes telecommunications service."

FCC lawyers could not be reached yesterday to determine if they would appeal the case to the Supreme Court or seek a rehearing before the full 9th Circuit. But experts said the FCC probably would seek a stay to prevent the decision from taking effect pending the appeal.

Given that, cable operators said it could be another two years before rules stemming from the Telecommunications Act of 1996 were sorted out.

Times staff writer James S. Granelli contributed to this report. The Los Angeles Times is a Tribune Publishing newspaper.

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