Federal Communications Commission FCC 02 -77 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Inquiry Concerning High-Speed Access to the ) GN Docket No. 00-185 Internet Over Cable and Other Facilities ) ) Internet Over Cable Declaratory Ruling ) ) Appropriate Regulatory Treatment for Broadband ) CS Docket No. 02-52 Access to the Internet Over Cable Facilities ) DECLARATORY RULING AND NOTICE OF PROPOSED RULEMAKING Adopted: March 14, 2002 Released: March 15, 2002 Comment Date: 60 days after publication of this Notice in the Federal Register Reply Comment Date: 90 days after publication of this Notice in the Federal Register By the Commission: Chairman Powell and Commissioner Abernathy issuing separate statements; Commissioner Copps dissenting and issuing a statement. TABLE OF CONTENTS Paragraph I. INTRODUCTION ........................................................................................................................... 1 II. BACKGROUND ............................................................................................................................. 9 III. DECLARATORY RULING: STATUTORY CLASSIFICATION OF CABLE MODEM SERVICE....................................................................................................................................... 31 A. Background....................................................................................................................... 31 B. "Information Service" or "Telecommunications Service" Classification ......................... 34 C. “Cable Service” Classification.......................................................................................... 60 D. Other Statutory Classifications ......................................................................................... 70 IV. NOTICE OF PROPOSED RULEMAKING.................................................................................. 72 A. Background....................................................................................................................... 72 B. Commission Authority...................................................................................................... 75 1 Federal Communications Commission FCC 02 -77 C. Marketplace Developments .............................................................................................. 83 D. Consequences Of Legal Classification As Information Service....................................... 96 1. State and Local Regulation of Cable Modem Service and Rights-Of- Way...................................................................................................................... 96 2. Pole Attachments ............................................................................................... 109 3. Universal Service............................................................................................... 110 4. Protection of Subscriber Privacy ....................................................................... 111 V. ADMINISTRATIVE MATTERS................................................................................................ 113 VI. ORDERING CLAUSES .............................................................................................................. 133 I. INTRODUCTION 1. Cable modem service provides high-speed access to the Internet,1 as well as many applications or functions that can be used with that access, over cable system facilities.2 The service is 1 For purposes of this proceeding, we use the definition of the Internet that has been adopted by the Federal Networking Council: “‘Internet’ refers to the global information system that -- (i) is logically linked together by a globally unique address space based on the Internet Protocol (IP) or its subsequent extensions/follow-ons; (ii) is able to support communications using the Transmission Control Protocol/Internet Protocol (TCP/IP) suite or its subsequent extensions/follow-ons, and/or other IP-compatible protocols; and (iii) provides, uses or makes accessible, either publicly or privately, high level services layered on the communications and related infrastructure described herein.” See FNC Resolution: Definition of ‘Internet,’ available at http://www.itrd.gov/fnc/ Internet_res.html, visited Jan. 22, 2002. Statutory definitions of the Internet are in Communications Act § 230(f)(1), 47 U.S.C. § 230(f)(1) (“the international computer network of both Federal and non-Federal interoperable packet switched data networks") and Communications Act § 231(e)(3), 47 U.S.C. § 231(e)(3) (“the combination of computer facilities and electromagnetic transmission media, and related equipment and software, comprising the interconnected worldwide network of computer networks that employ the Transmission Control Protocol/Internet Protocol or any successor protocol to transmit the information.”). 2 We have observed that “Internet access services . alter the format of information through computer processing applications such as protocol conversion and interaction with stored data.” See Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report to Congress (“Universal Service Report”), 13 FCC Rcd 11501, 11516-17 ¶ 33 (1998) (citations and internal quotations omitted). We note that, for purposes of Section 231 (“Restriction of Access by Minors to Materials Commercially Distributed by Means of World Wide Web That Are Harmful to Minors") of the 1996 Act (infra note 13), Congress has defined the term “Internet access service” to mean: “a service that enables users to access content, information, electronic mail, and other services offered over the Internet, and may also include access to proprietary content, information, and other services as part of a package of services offered to consumers. Such term does not include telecommunications services." 47 U.S.C. § 231(e)(4). We presume that the last sentence is intended to clarify that section 231 was not intended to impair our or a state commission's ability to regulate basic telecommunications services. See H.R. Rep. 105-570(I) at *20. We also note that litigation concerning the constitutionality of section 231 is underway (e.g., ACLU v. Reno, 217 F.3d 162 (3d Cir. 2000), cert. granted, 121 S. Ct. 1997 (2001)), but does not concern the definition of Internet access service. The same definition appears in sections 1101(e)(3)(D) and 1104(5) of the Internet Tax Freedom Act, Pub. L. No. 105- 277, Div. C, Title XI, §§ 1100-1104, 112 Stat. 2681-719 (1998), 47 U.S.C. § 151 note (“Internet Tax Freedom Act”). We have defined “high-speed” Internet access in general as a service that “enables consumers to communicate over the Internet at speeds that are many times faster than the speeds offered through dial-up telephone connections” and that enables subscribers to “send and view content with little or no transmission delay, utilize sophisticated ‘real-time’ applications, and take advantage of other high-bandwidth services.” See Applications for Consent to the Transfer of Control of Licenses and Section 214 Authorizations by Time Warner Inc. and America Online, Inc., Transferors, to AOL Time Warner Inc., Transferee, CS Docket No. 00-30, Memorandum Opinion and Order (“FCC (continued....) 2 Federal Communications Commission FCC 02 -77 available to approximately 73% of U.S. households.3 Along with the service’s popularity, controversy has grown about its legal status under the Communications Act of 1934, as amended (“the Act”),4 and about what regulatory treatment (if any) is appropriate under the law and will best serve consumers. The purpose of this proceeding is to resolve these issues.5 2. The issue of what, if any, regulatory treatment should be applied to cable modem service dates back to at least 1998, when it arose in the Commission’s “First Section 706 Inquiry” about the deployment of advanced telecommunications capability.6 The Commission further considered the issue in several subsequent proceedings including a complaint case,7 license transfer reviews in connection with mergers involving cable operators,8 and a special report by the Commission’s Cable Services Bureau.9 To (...continued from previous page) AOL Time Warner Merger Order”), 16 FCC Rcd 6547, 6572 ¶ 63 (2001). See also id., 6572 ¶ 64, 6574-77 ¶¶ 69- 73. 3 See Richard Bilotti, Benjamin Swinburne, and Megan Lynch, Industry Overview: The Marquis de Broadbandbury - Parte Deux, Morgan Stanley Dean Witter ("Morgan Stanley July 2001 Report"), July 3, 2001, at 46. 4 47 U.S.C. §§ 151 et seq. 5 We do not intend this proceeding to affect high-speed Internet access provided by facilities licensed in Multipoint Distribution Service, Multichannel Multipoint Distribution Service, Local Multipoint Distribution Service, Satellite Master Antenna Television Systems, or other primarily wireless technologies. Also, we are aware of offerings of high-speed Internet access that are targeted at businesses, including small ones. See, e.g., Comcast Corp., Broadband Commuter Service, available at http://www.comcastbusiness. com/pdf/Broadband_Commuter _Service.pdf (visited Feb. 11, 2002). We are not considering those offerings in this proceeding. 6 See Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps To Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, CC Docket No. 98-146, Notice of Inquiry, 13 FCC Rcd 15280, 15308-11 ¶¶ 77-82 (1998). See also Inquiry Concerning the