Notwithstanding what appears to be an initial move away from strict regulation of cable modem services, how the FCC will further exercise its regulatory authority over cable modem services has not been completely decided. In the Notice of Proposed Rulemaking
portion of its decision, the FCC stated that in light of certain developments in the marketplace, it would consider whether the FCC should regulate cable modem services in the future to impose a multiple ISP or “open access” requirement on cable operators. Apparently, despite initial recalcitrance, certain companies were offering multiple ISPs to customers, and the FCC took note of this development. For example, as a condition to its approval of the merger between Time Warner and America Online
, the FTC required AOL Time Warner Inc. to provide non-discriminatory access to competing ISPs, which AOL Time Warner Inc. agreed to and has been implementing. AOL Time Warner Inc. stated that the FCC’s decision would not affect its merger and that it would continue to offer cable modem services using both affiliated and unaffiliated ISPs. Interestingly, since the City of Portland
decision, AT&T has also been one of the first cable operators to conduct technical trials regarding the provision of cable modem services by multiple ISPs. Although AT&T and Excite @Home were among the first cable providers and ISPs to develop an exclusive relationship, in December 2001, as a result of the bankruptcy of Excite@Home, contracts between AT&T and Excite were terminated and AT&T began providing ISP services on its own. On March 12, 2002, AT&T announced an agreement with EarthLink for the provision of high-speed cable Internet service but continues to consider multiple ISP options. Many other cable operators are also conducting technical trials to determine how cable modem service can be offered using multiple ISPs and are entering into negotiations with several ISPs to prepare for such service. These trials involve reviewing technical, operational and financial issues, such as implementation of routing techniques to accommodate multiple ISPs, as well as quality of service, compensation, billing and customer service issues. The FCC noted that cable operators face many technical and business challenges in a multiple ISP environment.
Accordingly, the FCC is currently seeking public comment on whether it should exercise its regulatory authority to impose a multiple ISP access requirement and requested that commenters refresh the FCC’s record on current developments in the marketplace and various models of multiple ISP access. In addition, the FCC is seeking further public comment to clarify the authority of state and local governments with respect to cable modem services, as it recognizes that such services are provided over cable systems occupying public rights of way in local communities that are subject to such local regulatory authority.