FCC Commissioner Weighs In

Are Internet data services the same thing as telephone services? It's a question central to the latest regulatory debate here in the United States.

Federal Communications Commission (FCC) Commissioner Kevin J. Martin maintains that the federal agency is not changing how regulators define Internet access -- they're just trying to define it more clearly. Martin spoke briefly with Light Reading last week after a rulemaking notice adopted by the FCC caused some grumbling among competitive carriers (see FCC Stirs Up Competitive Carriers).

Competitive carriers such as ISPs and CLECs currently depend on their competitors, the incumbent carriers (RBOCs), to share key parts of their networks in the form of co-location space in central offices. The Telecommunications Act of 1996 requires this, even though Internet access wasn't specifically addressed in the Act.

"It's not that [the previous administration] declared Internet access a telephone service. They only said it was more like an information service," says Martin. "We tentatively conclude that high-speed broadband Internet access over wireline is an information service, and we're asking the same [classification] questions regarding voice telephone services provided via cable modems."

This tentative decision upsets competitive carriers, because they fear they might lose their rights to access RBOC resources. But Martin says it may make more sense, because labeling Internet access as a telecommunications service would force the FCC to treat it as though it were a voice-based service, meaning that a different set of taxes and tariffs would apply. In the end, that might slow the deployment of broadband even more.

Martin says the FCC's not so sure RBOCs are dominant when it comes to providing broadband services. "I think about two thirds of the people who get high-speed Internet access do so via cable modems," he says. "That may have some implication in a whole bunch of our rules."

The FCC's own surveys show most Americans have some level of broadband access, or, as it defines it, Internet service with more than 200-kbit/s capability in at least one direction. Fifty-eight percent of the nation’s ZIP codes have multiple high-speed providers, according to an FCC report release in February that contained data as recent as June 30, 2001. To Martin's point, about 44 percent, or 3.3 million, of the 5.9 million broadband subscribers use a cable-based service, according to the FCC's data.

But does such data suggest that the rules for sharing facilities between competitive carriers and incumbents should be changed or thrown out? Martin says the FCC is looking into it.

"We need to make sure that our regulations don't stifle broadband deployments by requiring facilities to be shared with competitors at a cost that makes it so that the RBOCs can't recoup their [network] investment cost. We have to put the right incentives in place for incumbents to deploy new equipment and for competitors to deploy their own equipment as well."

Another thing that will help speed broadband deployments, Martin says, is if Internet access companies are not required to pay into the Universal Service Fund (USF), a fund that, in part, helps provide basic telephone services to the poor. The FCC is considering changes to the USF contribution system, and Martin says cable companies and ISPs shouldn't be lumped into what is essentially a voice-based concern.

"I'm very supportive of the USF, but I don't think any level of government should see broadband as an additional revenue stream that they can tap into to fund other projects. I'm concerned that at the local level some have done that, and such moves increase the cost and decrease the demand and slow the rollout of broadband.

"Regulatory parity doesn't exist now. [Cable providers] are paying some things that telecommunications carriers aren't. And the Universal Service charge does apply to cable providers when they offer voice service that competes with telephone companies."

— Phil Harvey, Senior Editor, Light Reading

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