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ACA Raises Concerns About New Regulatory Reclassification For Broadband

Small Op Groups Still Open To Working With FCC On Reaching Right Result

In response to the Federal Communications Commission's recent decision to regulate broadband access providers as common carriers under a streamlined version of rules that have generally applied to telephone providers for many decades, the American Cable Association expressed worries about the impact of such a new regime, and a willingness to work with the agency on determining how best to ensure an open internet.

FCC Chairman Julius Genachowski said he developed what he called a "Third Way" approach to regulating broadband access providers, choosing a middle ground between total deregulation and the heavy regulatory burdens normally faced by common carriers.

Broadband access providers will need to comply with non-discrimination requirements under Genachowski's plan, but their retail rates will not be regulated and their networks will not subject to any unbundling requirements under forbearance policies the FCC is planning to establish.

"ACA appreciates that the FCC is attempting to find some middle ground under its new `Third Way' approach to protecting the open Internet," American Cable Association President and CEO Matthew M. Polka said. "However, classifying cable broadband service under Title II for the first time, even with numerous forbearances, creates uncertainly in the market and runs the risk of producing unintended consequences, especially for small and mid-sized broadband providers. Still, ACA remains committed to working with the FCC on this matter in the year ahead to ensure the right result is reached for consumers and the operators who serve them."

Prior to Genachowski's May 6 announcement, ACA filed comments with the FCC on April 26 urging the agency to take a number of steps to ensure that broadband access providers and their customers are treated with a broad measure of fairness under any new open Internet policies. These comments were filed in an ongoing Net Neutrality rulemaking proceeding that had been initiated prior to last month's federal appeals court ruling that invalidated the FCC's regulatory approach to the Internet at the time.

A leading ACA recommendation was that if the FCC decides to regulate broadband access providers, it should consider applying the same regulations to all participants in the Internet ecosystem, including, but not limited to, providers of content, applications, services and devices.

"Failure to do so would result in an increasingly closed Internet, with powerful providers of content, applications, services and devices denying access to entire classes of users," Polka said.

ACA explained that regulatory parity was essential to preventing powerful owners of Web content, search engines, browsers and other applications from using their economic leverage to injure small cable operators and their customers.

These entities, for example, could follow the business model established by the Walt Disney Co.'s ESPN3 (formally ESPN360), which prevents consumers from accessing its content until their broadband providers have paid Disney wholesale fees based on every broadband subscriber. Disney refuses to conduct one-on-one financial agreements with individual broadband subscribers.

"Without FCC action, more companies will follow the business model implemented by ESPN and block access to their online content," Polka said. "Customers of smaller broadband providers like ACA members are most vulnerable. Extending any regulations will serve the public interest by protecting users from being shut out by wholesale arrangements or exclusive agreements."

ACA also urged the FCC to conclude that consumption-based billing is a reasonable network management practice and to limit transparency requirements to posting general information on a broadband provider's website.

ACA called on the FCC to exempt specialized or managed services -- such as VoIP telephony service, IPTV, website hosting, advertising, and virtual private networks for business -- from its new broadband regulatory regime.


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