Internet Over Cable: Defining the Future in Terms of the Past

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Internet Over Cable: Defining the Future in Terms of the Past INTERNET OVER CABLE: DEFINING THE FUTURE IN TERMS OF THE PAST Barbara Esbin* CONTENTS EXECU TIVE SU M M ARY ......................................................................... 38 A . B ackground ........................................................................... 38 B. Sum m ary of Contents ................................................................. 39 C. Purpose of this Exam ination .......................................................... 42 I. IN TRO D U CT IO N ........................................................................ 42 II. THE INTERNET AND THE 1996 ACT ................................................... 45 A. A Brief Description of the Internet ................................................... 45 1. G eneral Background .............................................................. 45 2. Features and Functions of Communications Over the Internet .................... 50 B. Statutory Definitions and Policies ..................................................... 55 III. VOICE AND DATA COMMUNICATIONS UNDER THE COMMISSION'S RULES ........ 57 A . C om puter I ........................................................................... 58 B. Com puter II and Com puter III ....................................................... 59 C. BOC Provision of Internet Access Under Computer III ............................... 64 D . Fram e Relay O rder ................................................................... 65 IV. TELECOMMUNICATIONS AND INFORMATION SERVICES UNDER THE 1996 ACT .... 67 A. Interconnection Rights and Obligations Under Section 251; Who is a "Telecom m unications Carrier"? ....................................................... 68 B. Universal Service; Status of Internet Services and Service Providers Under Section 2 5 4 ................................................................................... 6 9 1. Requirem ents of Section 254 ..................................................... 69 2. Section 254(c) (1) "Core" Telecommunications Services Do Not Include Internet A cce ss ............................................................................ 70 3. Supportable Services for Schools and Libraries Include "Basic Conduit Access to th e In tern et" . ........... ......................................................... 70 4. Non-Telecommunications Carriers May Receive Support for Internet Access Services Provided to Schools and Libraries ........................................ 71 5. Telecommunications Carriers Alone Must Contribute to Universal Service S u p p o rt .......................................................................... 7 1 C. BOC Safeguards Under Sections 271 and 272 for InterLATA Information Services .... 72 1. Enhanced Services are Information Services ...................................... 73 2. Protocol Processing Services are Information Services ............................. 73 D. BOC Safeguards Under Section 274 for Electronic Publishing ........................ 75 * Partner, Dow, Lohnes & Albertson, PLLC, Washington, stages of the project. The author is also indebted to Robert D.C., B.A., Antioch College, J.D., Duke University. Ms. Esbin Pepper, Dale Hatfield and Staag Newman for their guidance served at the Federal Communications Commission as and assistance with the final project. The views expressed Associate Bureau Chief in the Cable Services Bureau. The herein are those of the author, and do not necessarily author would like to thank William Johnson and JoAnn represent the views of either the Federal Communications Lucanik for their helpful advice and comments in the earlier Commission or Dow, Lohnes & Albertson. COMMLAW CONSPECTUS [Vol. 7 E. Access Reform Order/Internet Usage NOI ........................................... 1. A ccess C harges ................................................................... 2. Access Reform Order; Internet Service Providers Will Continue to be Treated as A ccess Service End U sers ......................................................... 3. Internet Usage NOI; Inquiry Begun on Broader Issues ............................ F. Report to Congress (Universal Service) ............................................... G . Su m m ary ............................................................................. V. EVOLUTION OF CABLE SERVICE ....................................................... A. Definition of "Cable Service" Under the 1984 Cable Act .............................. B. "Cable Service" and "Cable System" Under Heritage ................................... C. Features of Internet Services Provided Over Cable Systems ............................ 1. Advanced Cable Architecture ..................................................... 2. Current Cable Internet Services ................................................... VI. INTERNET SERVICE AS "CABLE SERVICE" UNDER THE 1996 ACT .................... A. Revised Definition of "Cable Service" Under the 1996 Act ............................ B. Selected Cable Regulatory Issues ...................................................... 1. Pole A ttachm ents ................................................................. 2. Scope of Local Cable Franchises .................................................. 3. Fran ch ise Fees .................................................................... 4. Unbundling/Competitive Neutrality .............................................. 5. Resale/Interconnection of Cable Internet Access ................................. 6. C ross-Su bsidy ..................................................................... 7. O ther T itle VI Issues ............................................................. a. Regulation of Cable Facilities and Equipment ................................. b. Program m ing-Based Regulation ............................................... c. Regulation Based on System Capacity or "Use of Channels" .................. d. Protection of Subscriber Privacy .............................................. C . Su m m ary ............................................................................. VII. INTERNET POLICY ISSUES AND PERSPECTIVES ....................................... A. New Issues for Com munications Policy ................................................ B. Regulatory A lternatives ............................................................... VIII. C O N C LU SIO N ........................................................................... EXECUTIVE SUMMARY the pro-competitive, de-regulatory program of the 1996 Act depends upon the viability of distinct A. Background regulatory categories for services, facilities, and The Internet poses significant challenges for service providers to establish the rights and obli- government policy makers and regulators. Diffi- gations of carriers as competition is introduced to cult legal and policy issues arise from the fact that formerly monopoly-based markets. Integrated Internet-based services do not fit easily into the digital service offerings, such as those provided longstanding classifications for communications over the Internet, present fundamental problems services under federal law or FCC regulations. to a regulatory framework dependent upon tech- Against these underlying category difficulties, the nological distinctions reflecting delivery of analog Telecommunications Act of 1996 ("the 1996 Act") communications services. radically restructured the regulatory landscape for The Federal Communications Commission the provision of local telephone communications ("FCC") has already begun to grapple with the services, attaching significant new consequences problems "integratedl" or "converged" broadband to statutory definitions derived from the technolo- digital services and service providers pose in terms gies of the past. of the two fundamental regulatory categories: While the Internet arguably represents one "telecommunications" versus "information serv- form of technological and service convergence, ices." A third and equally important regulatory 1999] Internet Over Cable category is that of Title VI "cable services." The [and] to preserve the vibrant and competitive free issue of the regulatory status of Internet-based market that presently exists for the Internet and services provided by cable operators over their other interactive computer services, unfettered by cable systems arises as a result of revisions to the Federal or State regulation." definition of "cable services" contained in the SECTION III reviews the treatment of voice and 1996 Act. This issue has yet to receive compre- data communications under the FCC's Computer hensive assessment by the FCC. How the FCC re- Inquiry framework. solves issues concerning Internet access and the * This series of proceedings, begun in the late provision of Internet-based communications serv- 1960s, focussed on how to reconcile the conver- ices by cable operators has vast implications for gence and interdependence of communication both providers and consumers of Internet-based and data processing technologies within the stric- services. tures of Title II common carrier regulation. This Working Paper is intended to stimulate * The FCC established two categories of serv- discussion and critical comment on these signifi- ices: "basic" (telephone communications) and "enhanced" (data cant issues of regulatory classification and their processing). The former when consequences. It suggests, without advocating provided by telephone carriers would be regu- particular outcomes, that regulatory classification lated
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