The Borg are pushing the FCC into the broadband wars. Even warp drive might not be enough to help it escape

Cable World,  Nov 25, 2002  

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Byline: ALICIA MUNDY

Space may have been the final frontier for Star Trek, but at the Federal Communications Commission, the final frontier is broadband. If the FCC folks have their way, they will not go where no man has gone before.

You can't blame their resistance. All around them are companies, consumer coalitions and congressmen telling them to do something about broadband, get involved, be part of the solution. The FCC is fighting to the death to avoid getting involved. But they can't hold out forever, and the broadband pushers are like the Borg, just throwing bodies at the FCC until it is overwhelmed by the numbers.

"Broadband may not be the most important issue right now," says Blair Levin of Legg Mason. "But it may be the most critical within three years, and the FCC can't hide from it forever."

During the endgame of the AT&T Broadband merger with Comcast, the battleground was ISP access - which the FCC ignored in its final approval. FCC staff said ISP access rulings on an industrywide basis may come later in the ongoing proceedings on modem access. But Democratic Commissioner Michael Copps, the lone nay vote, is said to feel that it was contradictory for the FCC to approve the merger because of its benefits to expanding broadband, while simultaneously rejecting reviews of ISP issues as irrelevant. "Either broadband matters, or it doesn't," said a lobbyist familiar with Copps's concerns. "You don't justify the merger based on broadband and then drop the matter."

With this as wallpaper, major companies opened up a new front in the broadband wars at the FCC last week with demands for a "nondiscrimination" rule, with marquee names like Disney and Microsoft among the ranks, instead of the usual Corduroy Crew. On Nov. 15, representatives of ABC Disney, the Media Access Project and others met with Commissioner Kathleen Abernathy. Andrew Schwartzman, the head of the Media Access Project, was pleased with the session. "Our experience has been that those at the FCC with a Common Carrier or wire-line background, like Commissioner Abernathy, get it. Those on the media side aren't there yet."

He was talking about the need to guarantee that users of any broadband service would be able to access whatever website they want without restrictions. "Your electric company doesn't care if you use their service to hook up a hair dryer or a sex toy. Your Internet service should not be able to control where you go, either," said Schwartzman. Many companies that provide content are concerned that as the number of broadband providers shrinks, cable broadband companies will sign special deals favoring some content companies to the exclusion of others. "It's part of the cable companies' business plans," said a telecom lobbyist.

In a follow-up letter to the FCC, signed by Microsoft, Apple, the Consumer Electronics Association, eBay, Amazon, Radio Shack and Disney, the petitioners asked the agency to review the issue, and soon. "The Commission should assure that consumers...enjoy unfettered ability to reach lawful content...," it read, though it suggested no specific action. And interestingly, it was not signed by Earthlink, which is more interested in open access than nondiscrimination.

Disney is concerned with nondiscrimination because of its movie library, which it wants people to be able to order via the Internet. Other companies (Time Warner, for example, which owns the Turner Classic movie library) could sign exclusive deals that would make it harder, if not impossible, for consumers to get to Disney films. "This is the issue of the future," said one of the signers. "Today the Internet is an open platform. This represents an effort to keep it this way."

After all, as John Malone of Liberty Media said of Time Warner, it's not one company "favoring" its own content - it's a rational business decision. Comments like Malone's send shivers up the spines of the moguls at Disney and Amazon.

Another telecom lawyer said that since cable companies keep insisting that they don't intend to make deals to close off access to certain sites, they won't be upset if the government merely puts that in stone for them.

That, of course, is exactly what the FCC doesn't want to have to do at all. It gets the FCC dangerously close to monitoring cable companies' business contracts, some FCC folks worry.

"What's important with this letter is the number of different industries in different areas who signed it," says Kristan Van Hook of Infotech Strategies. Companies that didn't see the connection between Internet platform freedom and their businesses are "suddenly waking up to the potential for trouble in reaching customers."

As more major players push and pull at the FCC on nondiscrimination, it will be interesting to see how long the intrepid adventurers on the starship FCC can avoid getting sucked into the black hole of broadband. This is one game we reporters can just watch with a smile.

COPYRIGHT 2002 Access Intelligence, LLC
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