| What is Cable Modem Service?
Similar to broadband DSL, cable modem service provides a high-speed
internet connection over existing cable wires, allowing consumers
to access the internet at a fraction of the time it takes
over traditional telephone modems. This is true for two reasons:
1) broadband networks make the connection up to a hundred
times faster, and 2) the service is "always on".
In addition, unlike telephone modems, cable modems allow consumers
to keep their telephone lines open for voice conversations.
How many Cable Modem Service subscribers are there?
According to the National Cable & Telecommunications
Association, 16.2
million customers have cable modem service as of December
2003, a number that has steadily increased since the service's
availability in the late 1990s. In 2003, cable maintained
a 64.5% share of the installed residential broadband subscriber
base, compared to DSL.
Existing Laws and Challenges
In March 2002, the FCC classified
cable modem service as an "information service",
specifically determining that it is neither a cable nor a
telecommunications service.
This is an important distinction because "telecommunications
services" are subject to federal regulation and franchise
fees while "information services" are not. The FCC's
"information service" classification led many cable
operators to allege that cable modem service was no longer
subject to local customer service requirements and that cable
modem service was outside the scope of local franchising authorities.
Two court cases have presented challenges to the FCC's "information
service" definition; AT&T v. City of Portland
and Brand X v. FCC.
In the Portland case, the 9th Circuit held that a
cable modem service is not exclusively an "information
service" but that it contained a transmission element
and was therefore a "telecommunications service".
However, the original Portland decision was ordered
in 2000 -- before the FCC had adopted its position. The Association
of Local Officials Against Preemption (ALOAP) presented local
government's position that the FCC erred in not finding that
cable modem is a cable service and subject to local franchising
authority. ALOAP is also pursuing relief from the FCC's order
at the FCC.
On May 8, 2003, the U.S. Court of Appeals for the Ninth Circuit
asked whether it was bound by its previous decision in AT&T
v. City of Portland in evaluating appeals from the FCC
March 2002 cable modem order.
On October 6, 2003, the U.S. Court of Appeals for the Ninth
Circuit announced its decision on the Brand X case,
concurring with the Portland ruling that cable modem
service is a "telecommunications service" and not
merely an "information service" as characterized
by the FCC.
Once effective, the ruling would subject cable modem service
to FCC telecommunications regulations, including a requirement
to provide open access to competing Internet service providers.
see Court rejects FCC cable ruling
CNET
News.com, October 6, 2003
On April 1, 2004, the U.S. Court of Appeals for the Ninth
Circuit refused to rehear its Brand X cable modem decision,
which held that the transmission component of cable broadband
service is a telecommunications service. The cable industry
has appealed this latest Ninth Circuit decision to the Supreme
Court.
see Court ruling points way to broadband
regulation
CNET
News.com, April 1, 2004
Local government has decisions to make regarding whether
to appeal the matter to the Supreme Court. This is because
the appellate court, in denying review, essentially affirmed
the three-judge panel’s finding that the FCC was correct
in holding that the cable modem was not a cable service. Nonetheless,
the opinion is helpful. By finding that cable modem contains
a telecommunications component, the 9th Circuit denied the
telephone industry's argument before the Senate on why the
definition of "internet access" needs to be expanded
to include telecommunications. Since both services are similarly
characterized, their regulatory treatment will be similar
without amending the current definition.
TeleCommUnity's Concerns
TeleCommUnity supports widespread broadband deployment, but
is concerned about the definition of cable modem service as
an "information service". The FCC's ruling directly
affects the ability of local governments to regulate companies
using public rights-of-way, and to receive just compensation
for such use. A number of local government organizations
have estimated that the loss of franchise fee revenue in 2002
alone was over $300 million. In addition, since local governments
often act as a consumer advocate on cable issues, the fact
that cable modem providers are able to skirt local government
franchise fees and consumer protection oversight is troubling.
TeleCommUnity's Recommendations
TeleCommUnity supports efforts to:
- reclassify cable modem service as a cable service,
- require franchise fees on this service regardless of its
classification, and
- continue to protect local residents through enforcement
of local customer service standards, in the absence of effective
federal or state regulation of customer service standards.
Filings, Testimony and Position
Papers
Congressional Testimony on Broadband
Services: "The Regulatory Status of Broadband
Services: Information Services, Common Carriage, or Something
In-Between"
Presented by TeleCommUnity, NATOA, National League
of Cities, US Conference of Mayors and National Association
of Counties
Before the House Telecommunications and the Internet Subcommittee
July 21, 2003
Cover letter
| Testimony
[PDF]
Judge: Cable Modem Franchise Fee Dispute Belongs in
Federal Court
by Juan Otero
National
League of Cities, April 28, 2003
Groups File Suit Against FCC's Cable Modem Ruling
by Shane Walter
National
League of Cities, May 20, 2002
Mayors Challenge FCC Cable Modem Ruling By Filing
9th Circuit Brief
The
US Conference of Mayors, October 21, 2002
An FAQ about the FCC's Declaratory Ruling
Alliance
for Community Media, 2002
FCC 2002 Sec 706 Report -- Availability of High Speed Services
for Internet Access Report: FCC Wireline Competition
Bureau Industry Analysis and Technology Division, High Speed
Services for Internet Access
June 30, 2002
FCC's Cable Modem Definition Decision
FCC
Press Release, March 2002
Localities Want Franchising Oversight Over Cable Modem
Service
FCC's Local & State Govt. Advisory Committee (LSGAC) recommended
Commission "unambiguously" classify cable modem
service as cable service to avoid litigation, delay and further
investment uncertainty in build-out of cable service.
BroadbandWeek
Direct, February 12, 2002
Alliance of Local Organizations Against Pre-Emption (ALOAP)
Cable Modem Comments & Reply
In re Appropriate Regulatory Treatment for Broadband Access
to the Internet Over Cable Facilities, CS Docket No. 02-52,
Notice of Proposed Rulemaking
2002
Comments | Reply
Comments
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Latest News on
Cable Modem
Stay Of Ruling On Cable Broadband Allows Time For Appeal
A federal appeals court has suspended its ruling on high-speed
Internet access provided via cable modems in order to allow
cable companies and the FCC to appeal the decision to the
U.S. Supreme Court. The stay issued April 9 by the 9th
U.S. Circuit Court of Appeals temporarily suspends an
earlier ruling that would force cable companies to open
their lines to competing broadband providers and, thus, give
customers a choice of services. The appellate court decided
in October 2003 that the FCC should have classified high-speed
Internet service over cable as a "telecommunications
service" instead of an "information service,"
with the result being that the cable companies would have
to open their lines to competitors just as telecom firms do.
Technology Daily, April 12, 2004
Editorial: 9th Circuit's Cable-Modem Ruling Was a Setback
for Broadband
The 9th U.S. Circuit Court of Appeals' decision to classify
cable-modem service as a "telecommunications service"
rather than an "information service" was a "major
setback to progress in the information sector," according
to The Washington Times. It says the court's decision, if
allowed to stand, will stifle high-speed Internet deployment
by adding a host of regulatory hurdles for broadband providers
to jump. Washington
Times, April 8, 2004
Appeals Court Refuses To Reconsider Cable Broadband Case
A U.S. appeals court has rejected the FCC's request to reconsider
a ruling regarding cable broadband services — a move
that could prompt local governments to regulate the cable
industry. In essence, the court said cable networks' broadband
services have an element of telecommunications services in
them. The rejection could pave the way for municipalities
to force cable companies to share their broadband Internet
lines with third parties. On April 1, the 9th U.S. Circuit
Court of Appeals stuck to its October 2003 decision that the
FCC erred in classifying cable broadband as "information
service" rather than "telecommunications service."
The distinction is critical because local governments can
force telecommunications services to share their broadband
access lines, while information services are free from government
intervention. The FCC and Justice Department, meanwhile, says
they will seek a stay of the ruling. CNET
News.com, April 1, 2004
Identity Crisis
Internet Services Challenge Definition Of 'Phone Company'
By Yuki Noguchi
Washington
Post, October 23, 2003
Court rejects FCC cable ruling
CNET
News.com, October 6, 2003
Localities Want Franchising Oversight Over Cable Modem
Service
FCC's Local & State Govt. Advisory Committee (LSGAC) recommended
Commission "unambiguously" classify cable modem
service as cable service to avoid litigation, delay and further
investment uncertainty in build-out of cable service.
BroadbandWeek
Direct, February 12, 2002
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