Is Broadband Internet Access
a Title 47 Cable Service?

(September 3, 1999) There is one thing that almost everyone involved in the Portland broadband cable Internet access case can agree upon -- that the Cable Act is the controlling legal authority in the case. Yet the language of the Act which defines its scope does not include broadband Internet services provided over cable facilities.

The City of Portland argued that the Cable Act covers broadband cable Internet access in the trial court proceedings. AT&T agreed, although it argued that the Cable Act preempts local authorities, such as Portland, from mandating open cable access. U.S. District Court Judge Owen Panner based his June Opinion on the Cable Act. Now, AT&T and its allies have been filing briefs with the Court of Appeals which again argue for application of the Cable Act.

This should raise a few threshold questions. Does the Cable Act have anything to do with broadband Internet access? Are all of these people are making this stuff up?

The Cable Act of 1984, as amended by the Telecom Act of 1996, gives the FCC and local utility boards certain regulatory authorities over "cable services". The Act defines "cable services" as "the one-way transmission to subscribers of video programming or other programming service, and subscriber interaction, if any, which is required for the selection or use of such video programming or other programming service."

This definition clearly excludes use of cable for Internet access.

This statute does not give the FCC authority over everything involving the use of coaxial cable. It only gives the FCC authority over what is commonly known as cable TV. The statutory definition includes the words "one-way" and "programming". This is the nature of cable TV.

Cable TV is one way in the sense that cable companies send subscribers episodes of "I Love Lucy," but subscribers don't send "Leave It to Beaver" back to the cable companies. In contrast, the use of cable lines for Internet access is two-way. Internet users interact in a two-way fashion with other Internet users.

The difference between a one-way and a two-way street is widely understood by ordinary people. Yet the difference between one-way and two-way cable appears to escape all of the high powered lawyers in this case.

Cable TV content is almost exclusively "programming." In contrast, the Internet is mostly not "programming." The Internet includes electronic commerce, telemedicine, telecommuting, distance education, IP telephony, e-mail, discussion groups, chat, and a host of other activities that do not constitute "programming."

AT&T's brief refutes the obvious. It simply asserts in its brief that Internet is programming! "Whether the programming is CNN, HBO, or an interactive online cable service that includes Internet access, the cable operator purchases rights to the programming ..."

There was once a rationale for regulating television type programming provided over coaxial cable. In 1984 cable TV was argued to be a natural monopoly. Multiple companies were not going to provide multiple networks of cable lines; or so the argument went. There would be only one provider in each locality.

Today, broadband Internet access is altogether different. Broadband cable Internet access providers currently face serious competition from DSL service provided by local phone companies. There is also broadband Internet access provided by satellite companies, terrestrial wireless providers, and electric utilities. And of course, there is still narrowband 28.8 and 56 Kbps service.

So, not only is there no statutory authority for either the FCC or local bodies to regulate broadband cable access, but the argument that was advanced for giving them authority over cable TV does not apply to broadband Internet access over cable.

It is understandable why the City of Portland argues that the Cable Act applies to broadband Internet access. It is the only possible legal pretext which it has to assert authority to mandate open access. If the Cable Act does not apply, then it has no basis for involvement in this matter.

That Judge Panner would accept that the Cable Act applies here is also understandable. He is a local judge who reached a conclusion that benefited businesses, workers, and politicians in his community. Without the assumption that the Cable Act applies, he would have to have ruled in favor of a huge and distant corporation.

That AT&T and its friends would argue that the Cable Act applies here is more perplexing. AT&T could have argued in its briefs for Judge Panner, and for the Ninth Circuit, that the Cable Act is inapplicable here. But, it choose not to. Instead, it argued for expanding the FCC's authority by judicial fiat beyond what it currently holds by statute.

This is an interesting legal strategy, both because the plain meaning of the statute requires a conclusion that the Cable Act is inapplicable, but also because if the Cable Act does not apply, then AT&T would win the case.

AT&T has a solid argument for why it should win this case. Yet it will not advance it!

The lawyers handling this case are not novices. AT&T's lead counsel, David Carpenter, of the law firm of Sidley & Austin, is one of the leading antitrust and telecommunications appellate lawyers in the country. The lead attorney for HOTI, Christopher Wolf, of Proskauer Rose, is a national leader in the emerging field of Internet law. Excite@Home's Howard Symons, of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, is an expert in the field. They all know the history and content of the Cable Act.

The FCC brief is the only one which even raises the question of whether the broadband Internet access at issue in the case is a "cable service" within the meaning of the Cable Act of 1984.

However, before one jumps to the conclusion that the FCC is the only one concerned about limiting government regulation of the Internet, one must consider the alternatives that the FCC is facing.

Continue to Part 3
The Consequences of the Portland Case for the FCC.