Barely a month after announcing it would step up its examination of the issue, the FCC classified high-speed cable data systems as information services subject to less regulation than telecommunications services. The decision handed the cable industry a major victory in its battle to keep broadband competitors off its lines.
The cable industry said the 3-1 ruling will create regulatory certainty for expansive broadband rollouts, but opponents said it would entrench local cable monopolies in the high-speed Internet business.
National Communications and Telecommunications Association President and CEO Robert Sachs said the decision "sends a strong signal that cable Internet services will be able to continue to develop in a business environment that favors competition over regulation and encourages new investment."
Opponents of the classification promised a legal fight over what some called a "radical policy" that would undermine the Internet's open architecture.
"[Chairman] Michael Powell's FCC has struck a deadly blow to the future health of the Internet and has given a great victory to the cable industry lobby," said Jeff Chester, executive director of the Center for Digital Democracy. "Cable will now be able to become an even more powerful media gatekeeper, controlling much of what will be digitally distributed into U.S. homes."
Powell, who has advocated regulatory certainty to promote infrastructure rollout, said the decision was based on a strict reading of the law. "The commission is not permitted to look at the consequences of different definitions and then choose the label that comports with its preferred regulatory treatment," he said.
Commissioner Michael Copps, the lone Democrat on the panel, said the FCC was acting too quickly, possibly toward a preconceived agenda to deregulate dominant media providers.
He said the decision was rushed and grew from "forced analysis" that would complicate, not clarify, the regulatory picture.
"Make no mistake - today's decision places [cable modem] services outside any viable and predictable regulatory framework," Copps said.
"How America deploys broadband is the central infrastructure challenge our country faces. Last month I remarked that we were out-driving the range of our headlights. Today I think we are out-flying the range of our most advanced radar."
The Tauzin-Dingell bill, passed by the U.S. House or Representatives and facing a Senate fight, would similarly deregulate high-speed DSL service over telephone phone lines. Under current law, telephone companies' high-speed DSL lines are telecommunications services and must therefore open their lines to competitors.
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