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Yesterday, the ninth circuit court of appeals rejected the city of Portland’s contention that it could hold AT&T’s acquisition of TCI cable hostage. The issue of “open-access” has been resolved equitably in this instance, but the court’s decision to label broadband cable a “telecommunications service” is troubling for future litigation.
In December of 1998, the Portland City Council made AT&T’s acquisition of a TCI cable franchise contingent on AT&T opening its high-speed Internet access to competitors. A Portland court upheld the ruling over AT&T’s argument that regulatory authority belonged to the Federal Communications Commission (FCC). The ninth circuit agreed with this line of argument and allowed the acquisition to move ahead with the unresolved questions left for Washington to clarify.
If defined as a “telecommunications service,” it is likely that broadband cable providers would have to allow competitors access to their infrastructure, like phone companies. The FCC has practiced a policy of “vigilant restraint” to this point, so as to allow consumers to decide which technologies succeed or fail. As FCC Chairman, William Kennard, said last year, “We cannot regulate against problems that have yet to materialize in a market that has yet to develop.” It would be a shame if the “telecommunications” designation of yesterday’s decision resulted in an ambiguity that would compromise such a well-crafted policy.
The reason open access was required in phone lines was due to the government-granted monopoly that prevented competition in price and service. With no such monopoly, and no assurance that broadband technology will curry the favor of consumers, regulation at this point would be unreasonable. The emerging voice, data, and video transmission marketplace will provide consumers with more choices and value for their dollar than every before. To regulate broadband when its own future is so precarious would be an error of mammoth proportions.