FCC Rejects ISP's Request for Leased Access to Cable

(February 19, 2000) The FCC issued an Order on February 18 in which it denied the request of a small ISP for leased access to TCI's cable facilities in Spokane, Washington. The FCC ruled that the mandatory access requirements of one section of the Cable Act apply to "video programming", but not ISP access. Otherwise, the FCC muddied its already vague interpretation of whether and how the Cable Act might apply to Internet access via cable facilities.

The Federal Communications Commission (FCC) reasoned in its Order that cable companies are only required to provide leased access under Section 612 of the Communications Act of 1934 to providers of "video programming". The FCC continued that Internet access, which includes e-mail, video conferencing, and access to the web, does not fit this definition. However, the FCC further asserted that this same reasoning does not necessarily apply to similar language in similar sections of the Act.

The proceeding was initiated by Internet Ventures, Inc. (IVI) and its subsidiary, Internet On-Ramp, Inc.  IVI offers dial-up and broadband Internet access services to small markets in the western United States. It currently operates in 19 communities in California, Colorado, Idaho, Oregon and Washington.

TCI, the cable operator in Spokane, refused to lease access to IVI. The local franchising authority in Spokane also refused to compel TCI to provide leased access to IVI.

IVI then requested the FCC to issue a ruling that ISPs are entitled to commercial leased access under Section 612 of the Communications Act of 1934 (47 U.S.C. § 532). Not unexpectedly, the FCC denied the request. (The FCC has previously declined to impose open access requirements as conditions to its approval of mergers involving cable operators.) The FCC also issued a detailed but chaotic Memorandum Opinion and Order elaborating upon its denial.

The FCC made clear that IVI is not entitled to leased access from TCI. But, the Order added to the confusion regarding the FCC's interpretation of how the Cable Act applies, if at all, to Internet access via cable facilities.

At issue is Section 612 of the Communications Act of 1934. This section is codified at 47 U.S.C. § 532. It is part of a statutory framework governing cable operators which was enacted in the Cable Act of 1984. It has since been modified by subsequent amendments. Section 612 is a cable television diversity provision. It requires cable operators over a certain size to make available for lease a certain amount of their capacity for independently produced video programming.

The FCC's Order makes two things clear. First, IVI looses. Second, the FCC considers that ISP access is not "video programming" within the meaning of Section 612, and therefore does not qualify for leased access under Section 612.

The Order pointed out that the leased access requirement of 47 U.S.C. § 532 is "a federal scheme of channel leasing to assure access to cable systems by third parties unaffiliated with the cable operator who want to distribute video programming free of the editorial control of the cable operator."

The Order continued that "to be eligible for leased access channel capacity, the content delivered by IVI, and other ISPs, must constitute video programming as defined by the Communications Act.  The language of the Act makes clear that "commercial use" of leased access channels is limited to providers of "video programming"."

The FCC concluded that the use sought by IVI was not "video programming." The Order stated:

"Internet access service generally consists of numerous distinct and related elements, such as access to personal, educational, informational, and commercial web sites; the ability to send and receive electronic mail; access to streamed video content; Internet video messaging and conferencing; and a host of other services both realized and forthcoming.  In short, Internet access service provides consumers with a varied array of services.  In contrast, the leased access provisions of the Communications Act require cable operators to reserve channel capacity for one statutorily prescribed purpose -- video programming."

Beyond this, the FCC Order added confusion to its construction of the Cable Act. The Order also noted that,

"... commenters also extensively discussed broader issues, such as mandatory ISP access to cable operators' broadband facilities, and whether Internet access provided by a cable system constitutes "cable service," "telecommunications," or an "information service." The Commission need not address these issues in this proceeding. Rather, this proceeding is narrowly focused on the issue of ISP leased access eligibility in the context of Section 612 and is not the appropriate forum to consider such issues."

The FCC Order also asserted that it only applies to Section 612, 47 U.S.C. 532. The Order states, "we need address only the most basic threshold issue to resolve IVI's petition: does ISP Internet access service, such as that provided by IVI, constitute video programming as contemplated by Section 612 of the Communications Act (i.e., programming provided by, or generally considered comparable to programming provided by, a television broadcast station)?  We conclude that it does not."

The question of whether ISP use, or Internet access, is either video programming or programming, has wide implications. The Cable Act imposes numerous other obligations regarding programming. There is, for example, 47 U.S.C. § 251(f)(1)(C) (interconnection), 47 U.S.C. § 534(g)(1) (cable must carry), 47 U.S.C. § 549(a), (b), (c), (d), (e) (cable navigation devices), and 47 U.S.C. § 613(b) (video programming accessibility).

Moreover, the argument that local franchising authorities (LFAs), such as the City of Portland, have authority to mandate open access, rests upon the interpretation that the Cable Act applies to ISP access. This, in turn, must rest on the argument that Internet access is "one way" and "programming".

The City of Portland, like several other LFAs, has imposed open access requirements upon cable operators. AT&T has challenged the authority of these LFAs. One such case, AT&T v. Portland, is now before the U.S. Court of Appeals for the Ninth Circuit.

The FCC filed an amicus curiae brief in this case in which it did not take a position as to whether Internet access via cable constitutes a cable service within the meaning of the Cable Act.

The FCC Order of February 18 makes a tenuous argument when it asserts that its reasoning applies only to Section 612, 47 U.S.C. § 532, and does not extend to other parallel sections of the Cable Act. 

IVI President Don Janke is upset. "From the start, our campaign has been a true David-and-Goliath story," Janke said in a press release. "Unfortunately, David only had to deal with Goliath, not with the FCC."

Janke argued that "The FCC's regulation today will deprive thousands of ISPs and their subscribers of the benefits of the broadband revolution."