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 Federal  Communications  Commission  FCC  02  -77 
 1 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 


 In  the  Matter  of 
 Inquiry  Concerning  High-  Speed  Access  to  the  Internet  Over  Cable  and  Other  Facilities 


 Internet  Over  Cable  Declaratory  Ruling 
 Appropriate  Regulatory  Treatment  for  Broadband  Access  to  the  Internet  Over  Cable  Facilities 


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 GN  Docket  No.  00-  185 
 CS  Docket  No.  02-  52 
 DECLARATORY  RULING 
 AND 
 NOTICE  OF  PROPOSED  RULEMAKING 


 Adopted:  March  14,  2002  Released:  March  15,  2002 
 Comment  Date:  60  days  after  publication  of  this  Notice  in  the  Federal  Register  Reply  Comment  Date:  90  days  after  publication  of  this  Notice  in  the  Federal  Register 


 By  the  Commission:  Chairman  Powell  and  Commissioner  Abernathy  issuing  separate  statements;  Commissioner  Copps  dissenting  and  issuing  a  statement. 
 TABLE  OF  CONTENTS  Paragraph 
 I.  INTRODUCTION  ...........................................................................................................................  1 
 II.  BACKGROUND  .............................................................................................................................  9 
 III.  DECLARATORY  RULING:  STATUTORY  CLASSIFICATION  OF  CABLE  MODEM  SERVICE.......................................................................................................................................  31 


 A.  Background.......................................................................................................................  31 
 B.  "Information  Service"  or  "Telecommunications  Service"  Classification  .........................  34 
 C.  Cable  Service  Classification..........................................................................................  60 
 D.  Other  Statutory  Classifications  .........................................................................................  70 
 IV.  NOTICE  OF  PROPOSED  RULEMAKING..................................................................................  72 
 A.  Background.......................................................................................................................  72 
 B.  Commission  Authority......................................................................................................  75 
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 C.  Marketplace  Developments  ..............................................................................................  83 
 D.  Consequences  Of  Legal  Classification  As  Information  Service  .......................................  96  1.  State  and  Local  Regulation  of  Cable  Modem  Service  and  Rights-  Of-Way...................................................................................................................... 


 96  2.  Pole  Attachments  ...............................................................................................  109 
 3.  Universal  Service...............................................................................................  110  4.  Protection  of  Subscriber  Privacy  .......................................................................  111 


 V.  ADMINISTRATIVE  MATTERS................................................................................................  113 
 VI.  ORDERING  CLAUSES..............................................................................................................  133 


 I.  INTRODUCTION 
 1.  Cable  modem  service  provides  high-  speed  access  to  the  Internet,  1  as  well  as  many  applications  or  functions  that  can  be  used  with  that  access,  over  cable  system  facilities.  2  The  service  is 


 1  For  purposes  of  this  proceeding,  we  use  the  definition  of  the  Internet  that  has  been  adopted  by  the  Federal 
 Networking  Council:    Internet  refers  to  the  global  information  system  that  --  (i)  is  logically  linked  together  by  a  globally  unique  address  space  based  on  the  Internet  Protocol  (IP)  or  its  subsequent  extensions/  follow-  ons;  (ii)  is  able 


 to  support  communications  using  the  Transmission  Control  Protocol/  Internet  Protocol  (TCP/  IP)  suite  or  its  subsequent  extensions/  follow-  ons,  and/  or  other  IP-  compatible  protocols;  and  (iii)  provides,  uses  or  makes 
 accessible,  either  publicly  or  privately,  high  level  services  layered  on  the  communications  and  related  infrastructure  described  herein.  See  FNC  Resolution:  Definition  of  Internet,    available  at  http://  www.  itrd.  gov/  fnc/ 
 Internet_  res.  html,  visited  Jan.  22,  2002.  Statutory  definitions  of  the  Internet  are  in  Communications  Act    230(  f)(  1),  47  U.  S.  C.    230(  f)(  1)  (  the  international  computer  network  of  both  Federal  and  non-  Federal  interoperable  packet 
 switched  data  networks")  and  Communications  Act    231(  e)(  3),  47  U.  S.  C.    231(  e)(  3)  (  the  combination  of  computer  facilities  and  electromagnetic  transmission  media,  and  related  equipment  and  software,  comprising  the 
 interconnected  worldwide  network  of  computer  networks  that  employ  the  Transmission  Control  Protocol/  Internet  Protocol  or  any  successor  protocol  to  transmit  the  information.). 
 2  We  have  observed  that  Internet  access  services  .  .  .  alter  the  format  of  information  through  computer  processing 
 applications  such  as  protocol  conversion  and  interaction  with  stored  data.  See  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96-  45,  Report  to  Congress  (  Universal  Service  Report),  13  FCC  Rcd  11501, 


 11516-  17    33  (1998)  (citations  and  internal  quotations  omitted).  We  note  that,  for  purposes  of  Section  231  (  Restriction  of  Access  by  Minors  to  Materials  Commercially  Distributed  by  Means  of  World  Wide  Web  That  Are 
 Harmful  to  Minors")  of  the  1996  Act  (infra  note  13),  Congress  has  defined  the  term  Internet  access  service  to  mean:  a  service  that  enables  users  to  access  content,  information,  electronic  mail,  and  other  services  offered  over 
 the  Internet,  and  may  also  include  access  to  proprietary  content,  information,  and  other  services  as  part  of  a  package  of  services  offered  to  consumers.  Such  term  does  not  include  telecommunications  services."  47  U.  S.  C.    231(  e)(  4). 
 We  presume  that  the  last  sentence  is  intended  to  clarify  that  section  231  was  not  intended  to  impair  our  or  a  state  commission's  ability  to  regulate  basic  telecommunications  services.  See  H.  R.  Rep.  105-  570(  I)  at  *20.  We  also  note 
 that  litigation  concerning  the  constitutionality  of  section  231  is  underway  (e.  g.,  ACLU  v.  Reno,  217  F.  3d  162  (3d  Cir.  2000),  cert.  granted,  121  S.  Ct.  1997  (2001)),  but  does  not  concern  the  definition  of  Internet  access  service.  The 
 same  definition  appears  in  sections  1101(  e)(  3)(  D)  and  1104(  5)  of  the  Internet  Tax  Freedom  Act,  Pub.  L.  No.  105-277,  Div.  C,  Title  XI,    1100-  1104,  112  Stat.  2681-  719  (1998),  47  U.  S.  C.    151  note  (  Internet  Tax  Freedom 
 Act). 
 We  have  defined  high-  speed  Internet  access  in  general  as  a  service  that  enables  consumers  to  communicate  over  the  Internet  at  speeds  that  are  many  times  faster  than  the  speeds  offered  through  dial-  up  telephone  connections 


 and  that  enables  subscribers  to  send  and  view  content  with  little  or  no  transmission  delay,  utilize  sophisticated  real-  time  applications,  and  take  advantage  of  other  high-  bandwidth  services.  See  Applications  for  Consent  to  the 
 Transfer  of  Control  of  Licenses  and  Section  214  Authorizations  by  Time  Warner  Inc.  and  America  Online,  Inc.,  Transferors,  to  AOL  Time  Warner  Inc.,  Transferee,  CS  Docket  No.  00-  30,  Memorandum  Opinion  and  Order  (  FCC 
 (continued....) 
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 available  to  approximately  73%  of  U.  S.  households.  3  Along  with  the  services  popularity,  controversy  has  grown  about  its  legal  status  under  the  Communications  Act  of  1934,  as  amended  (  the  Act),  4  and 
 about  what  regulatory  treatment  (if  any)  is  appropriate  under  the  law  and  will  best  serve  consumers.  The  purpose  of  this  proceeding  is  to  resolve  these  issues.  5 


 2.  The  issue  of  what,  if  any,  regulatory  treatment  should  be  applied  to  cable  modem  service  dates  back  to  at  least  1998,  when  it  arose  in  the  Commissions  First  Section  706  Inquiry  about  the 
 deployment  of  advanced  telecommunications  capability.  6  The  Commission  further  considered  the  issue  in  several  subsequent  proceedings  including  a  complaint  case,  7  license  transfer  reviews  in  connection  with 
 mergers  involving  cable  operators,  8  and  a  special  report  by  the  Commissions  Cable  Services  Bureau.  9  To 


 (...  continued  from  previous  page)  AOL  Time  Warner  Merger  Order),  16  FCC  Rcd  6547,  6572    63  (2001).  See  also  id.,  6572    64,  6574-  77    69-73. 


 3  See  Richard  Bilotti,  Benjamin  Swinburne,  and  Megan  Lynch,  Industry  Overview:  The  Marquis  de  Broadbandbury 
 -  Parte  Deux,  Morgan  Stanley  Dean  Witter  ("  Morgan  Stanley  July  2001  Report"),  July  3,  2001,  at  46.  4 
 47  U.  S.  C.    151  et  seq.  5 
 We  do  not  intend  this  proceeding  to  affect  high-  speed  Internet  access  provided  by  facilities  licensed  in  Multipoint  Distribution  Service,  Multichannel  Multipoint  Distribution  Service,  Local  Multipoint  Distribution  Service,  Satellite 


 Master  Antenna  Television  Systems,  or  other  primarily  wireless  technologies.  Also,  we  are  aware  of  offerings  of  high-  speed  Internet  access  that  are  targeted  at  businesses,  including  small  ones.  See,  e.  g.,  Comcast  Corp., 
 Broadband  Commuter  Service,  available  at  http://  www.  comcastbusiness.  com/  pdf/  Broadband_  Commuter  _Service.  pdf  (visited  Feb.  11,  2002).  We  are  not  considering  those  offerings  in  this  proceeding. 
 6  See  Inquiry  Concerning  the  Deployment  of  Advanced  Telecommunications  Capability  to  All  Americans  in  a 
 Reasonable  and  Timely  Fashion,  and  Possible  Steps  To  Accelerate  Such  Deployment  Pursuant  to  Section  706  of  the  Telecommunications  Act  of  1996,  CC  Docket  No.  98-  146,  Notice  of  Inquiry,  13  FCC  Rcd  15280,  15308-  11    77-  82 


 (1998).  See  also  Inquiry  Concerning  the  Deployment  of  Advanced  Telecommunications  Capability  to  All  Americans  in  a  Reasonable  and  Timely  Fashion,  and  Possible  Steps  To  Accelerate  Such  Deployment  Pursuant  to  Section  706  of 
 the  Telecommunications  Act  of  1996,  CC  Docket  No.  98-  146,  Report  (  First  706  Report),  14  FCC  Rcd  2398,  2449    100-  01  (1999). 
 7  Internet  Ventures,  Inc.,  Internet  On-  Ramp,  Inc.,  Petition  for  Declaratory  Ruling  that  Internet  Service  Providers  are 
 Entitled  to  Leased  Access  to  Cable  Facilities  Under  Section  612  of  the  Communications  Act,  File  No.  CSR-  5407-  L,  Memorandum  Opinion  and  Order  (  Internet  Ventures),  15  FCC  Rcd  3247  (2000). 


 8  See  FCC  AOL  Time  Warner  Merger  Order,  16  FCC  Rcd  at  6588-  92    93-  100  (prohibiting  specific  kinds  of 
 discrimination  against  unaffiliated  Internet  service  providers  (  ISPs),  their  first  screens,  their  content,  and  the  quality  of  service  afforded  to  them);  America  Online,  Inc.,  and  Time  Warner,  Inc.,  Federal  Trade  Commission, 


 Docket  No.  C-  3989,  File  No.  001  0105,  Decision  and  Order  (  FTC  AOL  Time  Warner  Merger  Order),    II,  III  (Dec.  14,  2000)  (requiring  access  for  a  small  number  of  unaffiliated  ISPs  and  prohibiting  interference  with  the 
 content  of  unaffiliated  ISPs  and  discrimination  against  the  content  of  unaffiliated  ISPs);  Applications  for  Consent  to  the  Transfer  of  Control  of  Licenses  and  Section  214  Authorizations  from  MediaOne  Group,  Inc.,  Transferor  to 
 AT&  T  Corp.,  Transferee,  CS  Docket  No.  99-  251,  Memorandum  Opinion  and  Order  (  AT&  T-  MediaOne  Merger  Order),  15  FCC  Rcd  9816,  9869-  73    120-  28  (2000)  (noting  AT&  T  commitment  to  provide  unaffiliated  ISPs  with 
 access  to  its  cable  systems,  and  the  Department  of  Justice  consent  decree  requiring  AT&  T  to  divest  MediaOnes  ownership  of  Road  Runner  and  to  seek  DOJ  approval  before  entering  into  certain  types  of  agreements  with  Time 
 Warner  or  AOL  relating  to  the  provision  of  high-  speed  Internet  access  services);  Applications  for  Consent  to  the  Transfer  of  Control  of  Licenses  and  Section  214  Authorizations  from  Tele-  Communications,  Inc.,  Transferor  to 
 AT&  T  Corp.,  Transferee,  CS  Docket  No.  98-  178,  Memorandum  Opinion  and  Order  (  AT&  T-  TCI  Merger  Order),  14  FCC  Rcd  3160,  3205-  07    93-  96  (1999)  (no  requirement  imposed). 
 9  See  Cable  Services  Bureau,  Broadband  Today:  A  Staff  Report  to  William  E.  Kennard,  Chairman,  Federal 
 Communications  Commission,  Oct.  1999;  Barbara  Esbin,  Internet  Over  Cable:  Defining  the  Future  in  Terms  of  the  Past  (OPP  Working  Paper  Series  No.  30,  1998);  Kevin  Werbach,  Digital  Tornado:  The  Internet  and 


 Telecommunications  Policy  (OPP  Working  Paper  Series  No.  29,  1997)  (  Werbach  Paper).  In  addition,  local  (continued....) 
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 date,  however,  the  Commission  has  declined  to  determine  a  regulatory  classification  for,  or  to  regulate,  cable  modem  service  on  an  industry-  wide  basis.  10 
 3.  Following  the  Second  706  Inquiry,  the  Commission  concluded  that  it  should  address  the  regulatory  classification  of  cable  modem  service  and  released  the  Notice  of  Inquiry  (  Notice)  in  this 
 proceeding.  11  We  have  since  received  over  250  filings,  and  Commission  staff  have  met  with  a  variety  of  industry  representatives,  consumer  advocates,  and  state  and  local  government  officials. 


 4.  In  considering  the  issues  before  us  we  are  guided  by  several  overarching  principles.  First,  consistent  with  statutory  mandates,  the  Commissions  primary  policy  goal  is  to  encourage  the 
 ubiquitous  availability  of  broadband  to  all  Americans.  12  Section  706  of  the  Telecommunications  Act  of  1996  (  1996  Act)  13  charges  the  Commission  with  encourag[  ing]  the  deployment  on  a  reasonable  and 
 timely  basis  of  advanced  telecommunications  capability  to  all  Americans  by  regulatory  forbearance,  measures  that  promote  competition  .  .  .  ,  or  other  regulating  methods  that  remove  barriers  to  infrastructure 
 investment.  14  Moreover,  consistent  with  section  230(  b)(  2)  of  the  Act,  we  seek  to  preserve  the  vibrant 
 (...  continued  from  previous  page)  franchising  authorities,  the  Department  of  Justice,  and  the  Federal  Trade  Commission  have  also  studied  the  issue 
 carefully.  See  City  of  Fresno  City  Managers  Office,  Report  to  Council  on  AT&  T  /  MediaOne  Merger  -  Open  Access  (May  11,  2000);  King  County  Expert  Review  Panel,  Applying  a  Policy  of  Non-  Discriminatory  Access  to 
 High-  Speed  Internet  Access  Over  Cable  in  King  County,  Washington  (Oct.  1999);  City  of  Los  Angeles  Info.  Tech.  Agency,  Broadband  Access  Report  (  Los  Angeles  Report)  (June  1999);  Sacramento  Metro.  Cable  Tele.  Commn, 
 Cable  Modem  and  Internet  Services  -  Open  Net  /  Forced  Access  (Nov.  4,  1999);  County  of  San  Diego  Cable  Tele.  Review  Commn  Staff,  Broadband  Internet  Open  Access  Report  and  Recommendations  (Sept.  13,  1999);  City  and 
 County  of  San  Francisco  Dept  of  Telecommun.  and  Info.  Services,  Open  Access  Report  (  San  Francisco  Report)  (Jan.  14,  2000).  With  the  exception  of  San  Francisco  and  Los  Angeles,  all  of  the  local  franchising  authorities 
 adopted  recommendations  not  to  impose  an  access  requirement  at  this  time.  The  San  Francisco  Report  recommended  a  multiple  ISP  access  requirement,  but  the  recommendation  was  subsequently  abandoned  by  the  San 
 Francisco  Board  of  Supervisors  following  the  Ninth  Circuits  Portland  decision.  See  City  and  County  of  San  Francisco  Reply  Comments  at  3-  4;  CCTA  Reply  Comments  at  7;  AT&  T  Corp.  v.  City  of  Portland  (  Portland),  216 
 F.  3d  871  (9  th  Cir.  2000),  reversing  43  F.  Supp.  2d  1146  (D.  Ore.  1999).  The  Los  Angeles  City  Council  passed  a  resolution  directing  the  Los  Angeles  City  Attorney  to  urge  the  federal  government  to  adopt  an  access  requirement 
 for  all  cable  operators  nationwide  despite  the  Los  Angeles  Reports  recommendation  not  to  impose  an  access  requirement  at  the  time  it  was  released.  See  Letter  from  Edward  J.  Perez,  City  of  Los  Angeles,  to  Magalie  Roman 
 Salas,  Secretary,  FCC,  (Mar.  13,  2001).  See  also  FTC  AOL  Time  Warner  Merger  Order,  supra  note  8;  United  States  v.  AT&  T  Corp.  and  MediaOne  Group,  Inc.,  Case  No.  1:  00CV01176,  Final  Judgement  (D.  D.  C.,  filed  May  25,  2000), 
 available  at  http://  www.  usdoj.  gov/  atr/  cases/  f4800/  4841.  htm  (visited  Jan.  24,  2002).  10 
 See  Inquiry  Concerning  the  Deployment  of  Advanced  Telecommunications  Capability  to  All  Americans  in  a  Reasonable  and  Timely  Fashion,  and  Possible  Steps  To  Accelerate  Such  Deployment  Pursuant  to  Section  706  of  the 


 Telecommunications  Act  of  1996,  CC  Docket  No.  98-  146,  Second  Report  (  Second  706  Report),  15  FCC  Rcd  20913,  20918    8  (2000);  First  706  Report;  14  FCC  Rcd  at  2402    6-  7  (both  reports  finding  that  deployment  of 
 advanced  telecommunications  capability  on  the  whole  appears  reasonable  and  timely).  See  also  National  Cable  &  Telecommun.  Assn  v.  Gulf  Power  Co.,  122  S.  Ct.  782,  788  (2002)  (  Gulf  Power)  (noting  that  the  FCC  .  .  .  has  not 
 yet  categorized  Internet  service.).  11 
 Inquiry  Concerning  High-  Speed  Access  to  the  Internet  Over  Cable  and  Other  Facilities,  GN  Docket  No.  00-  185,  Notice  of  Inquiry  (  Notice),  15  FCC  Rcd  19287  (2000). 


 12  Appropriate  Framework  for  Broadband  Access  to  the  Internet  Over  Wireline  Facilities,  Universal  Service 
 Obligations  of  Broadband  Providers,  CC  Docket  No.  02-  33,  Notice  of  Proposed  Rulemaking  ("  Wireline  Broadband  NPRM")    3  (rel.  Feb.  15,  2002). 


 13  Telecommunications  Act  of  1996,  Pub.  L.  No.  104-  104,  110  Stat.  56  (1996)  (  1996  Act). 
 14  See  Pub.  L.  No.  104-  104,  Title  VII,    706,  Feb.  8,  1996,  110  Stat.  153,  reproduced  in  the  notes  under  47  U.  S.  C.   
 157  (  Section  706).  Section  706  defines  advanced  telecommunications  capability  without  regard  to  any  (continued....) 
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 and  competitive  free  market  that  presently  exists  for  the  Internet  and  other  interactive  computer  services,  unfettered  by  Federal  or  State  regulation.  15 
 5.  Second,  we  believe  broadband  services  should  exist  in  a  minimal  regulatory  environment  that  promotes  investment  and  innovation  in  a  competitive  market.  16  In  this  regard,  we  seek 
 to  remove  regulatory  uncertainty  that  in  itself  may  discourage  investment  and  innovation.  And  we  consider  how  best  to  limit  unnecessary  and  unduly  burdensome  regulatory  costs. 


 6.  Third,  in  this  proceeding,  as  well  as  in  a  related  proceeding  concerning  broadband  access  to  the  Internet  over  domestic  wireline  facilities,  17  we  seek  to  create  a  rational  framework  for  the  regulation 
 of  competing  services  that  are  provided  via  different  technologies  and  network  architectures.  We  recognize  that  residential  high-  speed  access  to  the  Internet  is  evolving  over  multiple  electronic  platforms, 
 including  wireline,  cable,  terrestrial  wireless  and  satellite.  By  promoting  development  and  deployment  of  multiple  platforms,  we  promote  competition  in  the  provision  of  broadband  capabilities,  ensuring  that 
 public  demands  and  needs  can  be  met.  We  strive  to  develop  an  analytical  approach  that  is,  to  the  extent  possible,  consistent  across  multiple  platforms. 


 7.  For  the  reasons  discussed  below,  we  conclude  that  cable  modem  service,  as  it  is  currently  offered,  is  properly  classified  as  an  interstate  information  service,  not  as  a  cable  service,  and  that  there  is 
 no  separate  offering  of  telecommunications  service.  In  addition,  we  initiate  a  rulemaking  proceeding  to  determine  the  scope  of  the  Commissions  jurisdiction  to  regulate  cable  modem  service  and  whether  (and, 
 if  so,  how)  cable  modem  service  should  be  regulated  under  the  law,  in  light  of  the  principles  discussed  above. 


 8.  We  seek  comment  on  the  regulatory  implications  of  our  finding  that  cable  modem  service  is  an  information  service,  including,  among  other  things,  the  extent  to  which  state  and  local  authorities 
 may  regulate  the  service.  We  are  initiating  a  further  proceeding  in  order  to  obtain  additional  comment  on  specific  issues  and  to  ensure  that  any  action  we  take  reflects  the  continuing  evolution  of  cable  modem 
 service  and  the  business  of  residential  high-  speed  Internet  access  service. 
 II.  BACKGROUND 
 9.  Deployment.  As  of  September  2001,  50.5%  of  U.  S.  households  had  Internet  connections.  18  The  vast  majority  of  them  subscribe  to  narrowband  service  provided  over  local 


 telephone  facilities.  19  Residential  high-  speed,  or  broadband,  20  Internet  access  service  became  available 


 (...  continued  from  previous  page)  transmission  media  or  technology,  as  high-  speed,  switched,  broadband  telecommunications  capability  that  enables 
 users  to  originate  and  receive  high-  quality  voice,  data,  graphics,  and  video  telecommunications  using  any  technology.  Id.  We  have  noted  that  our  definition  of  advanced  telecommunications  capability  will  evolve  over 
 time.  See  First  706  Report,  14  FCC  Rcd  at  2407-  08    25;  Second  706  Report,  15  FCC  Rcd  at  20921    14.  15 
 See  Communications  Act    230(  b)(  2),  47  U.  S.  C.    230(  b)(  2).  16 
 See  Wireline  Broadband  NPRM,  supra  note  12,    5.  17 
 See  id.,  supra  note  12.  18 
 NTIA  &  Economics  and  Statistics  Administration,  US  Department  of  Commerce,  A  Nation  Online:  How  Americans  are  Expanding  Their  Use  of  the  Internet,  Feb.  5,  2002,  at  5;  see  also  Inquiry  Concerning  the  Deployment 


 of  Advanced  Telecommunications  Capability  to  All  Americans  in  a  Reasonable  and  Timely  Fashion,  and  Possible  Steps  To  Accelerate  Such  Deployment  Pursuant  to  Section  706  of  the  Telecommunications  Act  of  1996,  CC  Docket 
 No.  98-  146,  Third  Report  (  Third  706  Report),  FCC  02-  33  (rel.  Feb.  6,  2002)    63.  19 
 We  use  the  term  narrowband  here  to  refer  to  Internet  access  service  that  is  designed  to  operate  at  speeds  of  less  than  200  kilobits-  per-  second  (  Kbps)  in  both  directions.  See  Second  706  Report,  15  FCC  Rcd  20913,  20917    8, 


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 after  narrowband  Internet  access  service  had  achieved  widespread  popularity.  21  Residential  high-  speed  Internet  access  services  are  provided  primarily  over  coaxial  cable  wires  in  the  form  of  cable  modem 
 service  offered  by  cable  operators,  and  over  copper  wires  in  the  form  of  digital  subscriber  line  (  DSL)  services  offered  by  local  exchange  carriers  (  LECs).  22  The  services  are  also  provided  to  some  extent 
 over  terrestrial  wireless  radio  spectrum  by  mobile  and  fixed  wireless  providers  and  over  satellite  radio  spectrum  by  satellite  providers.  23  Industry  analysts  estimate  that  high-  speed  Internet  access  service  is 
 now  available  to  approximately  75-  80%  of  all  the  homes  in  the  United  States  via  DSL  or  cable  modem  service,  and  approximately  11%  of  all  households  subscribe  to  these  services  today.  24  While  there  are 
 several  types  of  high-  speed  access  (DSL,  cable,  satellite,  fixed  wireless),  not  every  home  has  access  to  every  type  of  service.  25  Throughout  the  brief  history  of  the  residential  broadband  business,  cable  modem 
 service  has  been  the  most  widely  subscribed  to  technology,  with  industry  analysts  estimating  that  approximately  68%  of  residential  broadband  subscribers  today  use  cable  modem  service.  26  Analysts 
 estimate  that  about  29%  of  residential  broadband  subscribers  use  DSL  service,  27  and  about  3%  of 


 (...  continued  from  previous  page)  10,  12;  see  also  Third  706  Report,  FCC  02-  33,    7,  9,  and  11.  The  most  common  form  of  narrowband  Internet 
 access  service  is  provided  over  traditional  telephone  lines  (also  known  as  dial-  up),  which  currently  allows  for  the  transfer  of  data  at  speeds  up  to  56  Kbps.  See  FCC  AOL  Time  Warner  Merger  Order,  16  FCC  Rcd  6547,  6551    8, 
 n.  11.  20 
 See  Wireline  Broadband  NPRM,  supra  note  12,    1  n.  2;  supra  note  14.  21 
 Residential  Internet  access  services  are  discussed  more  fully  in  the  FCC  AOL  Time  Warner  Merger  Order.  See  FCC  AOL  Time  Warner  Merger  Order,  16  FCC  Rcd  6547,  6568,  6571-  74    53,  62-  67. 


 22  See  Third  706  Report,  FCC  02-  33,    21-  24. 
 23  See  Second  706  Report,  15  FCC  Rcd  20913,  20922,  20928-  38,  20942-  43    16,  29-  59,  71-  72;  see  also  Third  706 
 Report,  FCC  02-  33,    24-  26.  24 
 See  Morgan  Stanley  Dean  Witter  and  Yankee  Group  Study,  July  2001;  Information  Technology  Association  of  America,  Building  a  Positive,  Competitive  Broadband  Agenda:  Positively  Broadband,  White  Paper  (Oct.,  2001)  at 


 http://  www.  postivelybroadband.  org  (visited  Dec.  20,  2001);  Morgan  Stanley  July  2001  Report,  at  46;  Third  706  Report,  FCC  02-  33,    61.  Availability  figures  are  based  on  the  availability  of  wireline  services  (cable  and  DSL). 
 Satellite  is  available  to  any  household  with  a  clear  southern  view,  but  is  subject  to  propagation  delay  (delay  in  the  transmission  of  signals  that  results  from  the  time  it  takes  the  signals  to  travel  between  the  satellites  and  earth  stations 
 or  the  end  user),  and  is  available  at  a  higher  cost  than  wireline  services.  The  Commission  estimates  that  as  of  June  30,  2001,  about  7.8  million  households  subscribed  to  high-  speed  services.  Third  706  Report,  FCC  02-  33,    7. 
 25  As  a  result  of  its  Form  477  survey,  the  Commission  has  found  that  in  20.  3%  of  zip  codes  in  the  U.  S.,  there  are 
 subscribers  to  only  one  high-  speed  access  provider,  and  22.2%  of  zip  codes  have  no  subscribers  to  high-  speed  access  providers  at  all.  Third  706  Report,  FCC  02-  33,  Appendix  C,  Table  9.  These  data,  based  on  the  latest  Form  477 


 survey,  measured  the  presence  of  at  least  one  subscriber  to  high-  speed  access  providers,  not  the  actual  availability  of  such  providers.  Thus  multiple  high-  speed  access  providers  may  be  available  in  a  much  higher  percentage  of  zip 
 codes,  but  not  have  any  subscribers  in  those  zip  codes.  In  addition  this  survey  did  not  measure  the  number  of  subscribers  in  each  zip  code.  Therefore,  these  figures  do  not  measure  the  distribution  of  population  in  these  zip 
 codes,  but  it  is  likely  that  more  high-  speed  access  providers  are  available  in  areas  with  higher  population  densities.  See  Second  706  Report,  15  FCC  Rcd  20913,  20994-  21003    213-  243;  see  also  Third  706  Report,  FCC  02-  33,   
 17-  26.  26 
 See  Kinetic  Strategies,  Inc.,  Cable  Modem  Market  Stats  &  Projections  (December  21,  2001),  CABLE  DATACOM  NEWS,  at  http://  www.  cabledatacomnews.  com/  cmic/  cmic16.html  (visited  Jan.  23,  2002). 


 27  Id.  Generally,  unless  we  state  otherwise,  our  references  to  DSL  throughout  this  Order  refer  to  asymmetric  DSL 
 (  ADSL).  Asymmetric  DSL  is  the  most  common  variant  of  DSL  used  by  residential  subscribers,  and  is  available  at  various  speeds  ranging  up  to  6.1  mbps  downstream  and  640  Kbps  upstream.  See  Second  706  Report,  15  FCC  Rcd 


 20913,  20930,  20934    36,  47.  Currently,  at  lowest  cost,  ADSL  service  usually  provides  transmission  at  384-  640  Kbps  downstream  and  90-  128  Kbps  upstream. 
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 subscribers  use  various  radio-  based  technologies.  28  In  the  past  year,  some  incumbent  LECs  have  scaled  back  their  DSL  deployment  plans;  cables  lead  over  DSL  has  grown;  and  several  incumbent  LECs  and 
 cable  operators  have  raised  their  prices  for  high-  speed  Internet  access  services.  29 
 10.  Features  and  Applications.  Cable  modem  service  typically  includes  many  and  sometimes  all  of  the  functions  made  available  through  dial-  up  Internet  access  service,  30  including 


 content,  31  e-  mail  accounts,  32  access  to  news  groups,  33  the  ability  to  create  a  personal  web  page,  34  and  the  ability  to  retrieve  information  from  the  Internet,  including  access  to  the  World  Wide  Web.  35  Because  of 


 28  Kagan  World  Media,  MMDS  Sub  Base,  Broadband  Fixed  Wireless,  Sept.  30,  2001,  at  4;  2-  Way  Satellite  Internet 
 Access  Poised  For  Growth,  COMM.  DAILY,  Jan.  11,  2002.  29 
 See  Stephen  Lawson,  IDG  News  Service,  SBC  Pares  Back  Its  DSL  Efforts,  PCWORLD.  COM,  Oct.  23,  2001,  at  http://  www.  pcworld.  com/  news/  article/  0,  aid,  67606,  00.  asp  (visited  Jan.  23,  2002);  Kinetic  Strategies,  Inc., 


 Broadband  Providers  Boost  Prices:  Verizon,  BellSouth  and  EarthLink  Join  SBC  in  Raising  Consumer  DSL  Prices,  AT&  T  and  Charter  Lift  Cable  Modem  Rates,  CABLE  DATACOM  NEWS,  June  1,  2001,  at 
 http://  www.  cabledatacomnews.  com/  jun01/  jun01-  5.  html  (visited  Jan.  23,  2002).  While  SBC  has  scaled  back  its  efforts  to  deploy  DSL,  Bell  South  continues  to  advance  its  deployment  efforts  successfully.  COMM.  DAILY,  Jan  10, 
 2002,  at  14.  30 
 See  Letter  from  Alexandra  M.  Wilson,  Chief  Policy  Counsel,  Cox  Communications,  Inc.,  to  W.  Kenneth  Ferree,  Chief,  Cable  Services  Bureau,  FCC,  at  4-  5,  transmitted  by  letter  from  To-  Quyen  Truong,  Counsel  for  Cox 


 Communications,  Inc.,  to  Magalie  Roman  Salas,  Secretary,  FCC  (Aug.  15,  2001)  (  Cox  Aug.  15,  2001  Ex  Parte).  31 
 See  Bova  v.  Cox  Communications,  Inc.,  Cox  Communications,  Inc.  and  CoxCom,  Inc.,  Statement  of  Facts,  Civil  Action  No.  7:  01  CV  00090  (W.  D.  Va.)  (filed  Sept.  19,  2001)  (  Bova  Statement  of  Facts)  at  4. 


 32  E-  mail  or  electronic  mail  refers  to  the  transmission  of  electronic  messages  over  communications  networks. 
 These  messages  can  be  entered  from  a  keyboard  or  through  electronic  files  stored  on  a  disk.  Most  e-  mail  systems  include  a  text  editor  for  composing  messages.  A  user  sends  the  message  to  the  recipient  by  specifying  the  recipient's 


 domain-  based  address,  i.  e.,  jsmith@  abcd.  com.  Sent  messages  are  stored  in  electronic  mailboxes  until  retrieved  by  the  recipient.  See  Webopedia,  E-  mail  -  Definition,  at  http://  www.  webopedia.  com/  TERM/  e/  e_  mail.  html  (visited  Jan. 
 9,  2002);  NEWTONS  TELECOM  DICTIONARY  247  (17  th  ed.  2001).  Simple  Mail  Transfer  Protocol  (  SMTP)  is  the  message  exchange  standard  for  the  Internet.  It  is  familiar  to  most  people  by  its  addressing  scheme  -  the 
 username@  company.  com  scheme.  SMTP  provides  the  very  important  function  of  moving  messages  from  one  email  server  to  another.  It  works  in  conjunction  with  Post  Office  Protocol  (  POP),  which  is  a  mail  server  protocol  that 
 provides  an  incoming  and  outgoing  message  server  and  storage  system.  POP  receives  mail  and  holds  it  in  a  users  post  office  mailbox  while  SMTP  provides  message  transport  services.  See  MCGRAW  HILL  ENCYCLOPEDIA  OF 
 NETWORKING  &  TELECOMMUNICATIONS  438  (2001).  33 
 A  newsgroup  or  news  group  is  an  on-  line  forum  or  discussion  group  whereby  users  view  and  post  messages  using  a  news  reader,  a  computer  program  that  connects  the  user  to  a  server  on  the  Internet  that  stores  the  posted 


 messages  for  the  group.  Each  newsgroup  usually  focuses  on  a  specific  topic,  and  newsgroups  cover  a  vast  array  of  topics.  See  Webopedia,  Newsgroup  -  Definition,  at  http://  www.  webopedia.  com/  TERM/  n/  newsgroup.  html  (visited 
 Jan.  9,  2002).  Physically,  the  newsgroup  consists  of  the  computer  files  that  contain  the  conversation  elements  to  the  discussions  currently  in  progress  about  each  agreed  upon  topic.  Cable  operators  or  ISPs  get  their  newsgroups  from 
 different  news-  feeds  (or  newsfeeds),  or  news  sources,  by  transferring  them  over  the  Internet  or  other  networks.  See  NEWTONS  TELECOM  DICTIONARY  475  (17  th  ed.  2001). 
 34  The  cable  modem  service  provider  typically  offers  a  finite  amount  of  storage  capacity  on  one  of  its  local  servers  to 
 host,  i.  e.  store  and  provide  access  via  the  World  Wide  Web,  the  personal  web  pages  of  its  subscribers.  See,  e.  g.,  Cox  Aug.  15,  2001  Ex  Parte;  Letter  from  Darryl  Cooper,  Corporate  Counsel,  Excite@  Home,  to  Magalie  Roman  Salas, 


 Secretary,  FCC  (Aug.  17,  2001)  (  Excite@  Home  Aug.  17,  2001  Ex  Parte);  Bova  Statement  of  Facts,  supra  note  31,  at  5. 
 35  The  World  Wide  Web  is  a  system  of  Internet  servers,  i.  e.,  computers  connected  to  the  Internet,  that  support 
 documents  formatted  in  a  script  called  HyperText  Markup  Language  (  HTML),  which  supports  links  to  other  documents,  as  well  as  graphics,  audio,  and  video  files.  This  means  that  a  user  can  move  from  one  document  to 


 another  simply  by  clicking  on  links  contained  in  an  HTML-  formatted  document.  Not  all  Internet  servers  are  part  of  (continued....) 
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 the  broadband  capability  of  the  cable  plant,  however,  cable  modem  service  subscribers  can  access  the  Internet  at  speeds  36  that  are  significantly  faster  than  telephone  dial-  up  service.  37  As  a  result  of  that  faster 
 access,  subscribers  can  often  send  and  view  content  with  much  less  transmission  delay  than  would  be  possible  with  dial-  up  access,  utilize  more  sophisticated  real-  time  applications,  38  and  view  streaming 
 video  39  content  at  a  higher  resolution  and  on  a  larger  portion  of  their  screens  than  is  available  via  narrowband.  40  Some  cable  operators  also  provide  subscribers  with  access  to  content  that  the  operators 
 have  created  or  aggregated  on  an  Intranet  specifically  for  the  benefit  of  their  subscribers.  41  For  example,  cable  operators  sometimes  provide  content  targeted  to  a  specific  locality,  much  as  cable  operators  do  in 
 their  video  service  offerings.  42 


 (...  continued  from  previous  page)  the  World  Wide  Web.  There  are  several  applications  called  Web  browsers  that  make  it  easy  to  access  the  World 
 Wide  Web;  two  of  the  most  popular  browsers  are  Netscape  Navigator  and  Microsoft's  Internet  Explorer.  See  Webopedia,  World  Wide  Web  -  Definition,  at  http://  www.  webopedia.  com/  TERM/  W/  World_  Wide_  Web.  html 
 (visited  Jan.  9,  2002);  Letter  from  Betsy  J.  Brady,  Esq.,  Vice  President,  Federal  Government  Affairs,  AT&  T,  to  Magalie  Roman  Salas,  Secretary,  FCC  (Dec.  15,  2000)  (  AT&  T  Dec.  15,  2000  Ex  Parte),  Attachment  at  4. 
 36  References  to  "speed"  in  this  context  actually  refer  to  the  transmission  rates  for  data,  i.  e.,  how  many  bits  can  be 
 delivered  per  second,  e.  g.,  megabits  per  second  (  Mbps).  See  NATIONAL  ACADEMY  OF  SCIENCES,  BROADBAND:  BRINGING  HOME  THE  BITS  65  (2002)  (  NAS  Broadband  Report). 


 37  See  Comcast  Reply  Comments  in  the  2001  MVPD  Competition  Report,  at  7;  see  also  Cox  Comments  at  10;  see 
 also  Cablevision  Systems  Corp.,  Optimum  Online,  at  http://  www.  optimumonline.  com  (visited  Jan.  9,  2002).  Under  optimal  conditions  with  DOCSIS  (  Data  Over  Cable  Service  Interface  Specification)  1.0,  Internet  access  over  cable 


 infrastructure  may  support  up  to  38  Mbps  downstream.  Upstream  channels  may  deliver  500  Kbps  to  10  Mbps,  depending  on  the  amount  of  spectrum  allocated  and  modulation  technique  used.  However,  because  cable  broadband 
 network  capacity  is  shared  among  users  and  because  of  hardware  limitations,  an  individual  cable  modem  subscriber  may  generally  experience  speeds  from  500  Kbps  to  1.5  Mbps  --  depending  on  the  specific  network  architecture  and 
 traffic  load.  See  generally  Kinetic  Strategies,  Inc.,  Overview  of  Cable  Modem  Technology  and  Services,  at  http://  www.  cabledatacomnews.  com/  cmic/  cmic1.  html  (visited  Jan.  9,  2002).  DOCSIS  is  an  open  standard  for  data 
 communications  involving  cable  modems  and  cable  systems.  See  CableLabs,  DOCSIS  Project  Primer,  at  http://  www.  cablelabs.  com/  docsisprimer.  html  (visited  Feb.  20,  2002). 
 38  Real  time  applications,  such  as  live  voice  or  video  communications,  are  those  communications  where  there  is  no 
 perceived  delay  in  their  transmission,  as  the  communication  is  being  received  perceptively  at  the  same  time  it  is  transmitted.  See  NEWTONS  TELECOM  DICTIONARY  572  (17  th  ed.  2001). 


 39  Streaming  video  refers  to  the  transmission  of  packets  over  the  Internet  containing  a  video  signal,  which  is 
 viewable  as  it  is  transmitted  and  before  the  entire  file  is  downloaded  to  the  users  computer.  See  NEWTONS  TELECOM  DICTIONARY  655  (17  th  ed.  2001).  In  the  case  of  RealNetworks  streaming  media,  a  song  or  video  starts  to 


 play  on  a  users  computer  before  the  entire  song  or  video  file  is  downloaded.  In  other  words,  data  continues  to  download  while  the  song  or  video  plays.  No  space  is  used  on  the  users  computers  hard  drive  to  store  the  song  or 
 video  file.  See  MCGRAW-  HILL  ILLUSTRATED  TELECOM  DICTIONARY  824  (2  nd  Ed.  2000).  40 
 See,  e.  g.,  Road  Runner,  Best  of  Broadband  -  Media  Runner:  Instant  Videos  and  Breaking  Headlines  at  http://  rrcorp.  central.  rr.  com/  vm_  media_  runner01.  asp  (describing  Road  Runners  Media  Runner  streaming  video 


 feature)  (visited  Jan.  9,  2002).  41 
 An  Intranet  is  a  private  network  that  is  the  equivalent  of  a  private  Internet  reserved  for  those  users  who  have  the  authority  and  passwords  to  access  the  network.  See  NEWTONS  TELECOM  DICTIONARY  366  (17  th  ed.  2001);  see 


 also,  e.  g.,  Road  Runner,  Residential  Service:  What  is  Road  Runner?  at  http://  rrcorp.  central.  rr.  com/  hso/  whatis.  asp  and  Residential  Service:  Features,  at  http://  rrcorp.  central.  rr.  com/  hso/  explore_  features.  asp  (describing  Road  Runner, 
 a  high-  speed  Internet  access  service)  (visited  Jan.  10,  2002).  Intranets  house  applications  such  as  databases,  user  publishing,  search  vehicles,  and  administrative  and  management  tools. 
 42  See,  e.  g.,  Road  Runner,  Residential  Service:  What  is  Road  Runner?  at  http://  rrcorp.  central.  rr.  com/  hso/  whatis.  asp 
 and  Residential  Service:  Features,  at  http://  rrcorp.  central.  rr.  com/  hso/  explore_  features.  asp  (describing  Road  Runner,  a  high-  speed  Internet  access  service)  (visited  Jan.  10,  2002). 
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 11.  Cable  operators  often  include  in  their  cable  modem  service  offerings  all  of  the  services  typically  provided  by  Internet  access  providers,  43  so  that  subscribers  usually  do  not  need  to  contract 
 separately  with  another  Internet  access  provider  to  obtain  discrete  services  or  applications,  such  as  an  e-mail  account  or  connectivity  to  the  Internet,  including  access  to  the  World  Wide  Web.  44  Subscribers 
 typically  have  click-  through  access  to  any  and  all  content  and  services  available  on  the  Internet.  45  That  is,  a  subscriber  can  access  the  service  or  content  of  his  choice  by  typing  in  the  Uniform  Resource  Locator 
 (  URL)  46  of,  or  clicking  on  a  hyperlink  to,  the  desired  service  or  content,  using  the  web  browser  chosen  by  the  subscriber  or  included  with  the  subscribers  cable  modem  service.  Accessing  the  services  or 
 content  of  entities  not  affiliated  with  the  cable  operator,  such  as  those  provided  by  an  unaffiliated  Internet  service  provider  (  ISP),  however,  may  require  the  subscriber  to  pay  those  entities  an  additional  fee  over 
 and  above  the  monthly  subscription  charge  for  cable  modem  service.  47 
 12.  Network  Architecture  and  Technology.  Cable  systems  were  originally  built  to  provide  video  programming  in  one  direction,  from  the  network  to  subscribers.  48  These  systems  were  designed  to 


 send  the  same  content,  a  package  of  video  channels,  in  an  analog  signal  format  to  all  subscribers  uniformly.  Cable  operators  have  had  to  invest  in  major  improvements  or  system  upgrades  to  provide 
 cable  modem  service.  49  The  typical  upgrade  employs  what  is  commonly  known  as  a  hybrid  fiber-  coaxial 
 43  Internet  access  providers,  also  referred  to  as  ISPs,  combine  computer  processing,  information  storage,  protocol 
 conversion,  and  routing  with  transmission  to  enable  users  to  access  Internet  content  and  services.  See  Universal  Service  Report,  13  FCC  Rcd  at  11530    63  n.  125;  Deployment  of  Wireline  Services  Offering  Advanced 


 Telecommunications  Capability,  CC  Docket  No.  98-  147,  Order  on  Remand,  15  FCC  Rcd  385    34  (1999);  Implementation  of  the  Local  Competition  Provisions  in  the  Telecommunications  Act  of  1996;  Intercarrier 
 Compensation  for  ISP-  Bound  Traffic,  Declaratory  Ruling  in  CC  Docket  No.  96-  98  and  Notice  of  Proposed  Rulemaking  in  CC  Docket  No.  99-  68,  14  FCC  Rcd  3689,  3691    4  (1999);  GTE  Tel.  Operating  Cos.,  GTOC  Tariff 
 No.  1,  GTOC  Transmittal  No.  1148,  CC  Docket  No.  98-  79,  Memorandum  Opinion  and  Order  (  GTE  ADSL),  13  FCC  Rcd  22466,  22468-  9    6  (1998),  recon.  denied;  Application  of  WorldCom,  Inc.  and  MCI  Communications 
 Corporation  for  Transfer  of  Control  of  MCI  Communications  Corporation  to  WorldCom,  Inc.,  CC  Docket  No.  97-  211,  Report  and  Order,  13  FCC  Rcd  18025,  18104-  05    143  (1998).  We  recognize  that  this  construction  of  the  term 
 ISP  may  become  outdated  as  business  models  evolve.  We  do  not  intend  to  suggest  that  cable  modem  service  providers,  or  other  entities  that  provide  services  that  go  beyond  those  described  above,  could  not  be  considered  to  be 
 ISPs.  44 
 See,  e.  g.,  Road  Runner,  Residential  Service:  What  is  Road  Runner?  at  http://  rrcorp.  central.  rr.  com/  hso/  whatis.  asp  and  Residential  Service:  Features,  at  http://  rrcorp.  central.  rr.  com/  hso/  explore_  features.  asp  (describing  Road  Runner, 


 a  high-  speed  Internet  access  service)  (visited  Jan.  10,  2002).  45 
 See  FCC  AOL  Time  Warner  Order,  16  FCC  Rcd  at  6594    105-  106.  We  are  not  aware  of  any  cable  operator  that  prevents  subscribers  from  reaching  the  content  of  their  choice. 


 46  A  Uniform  Resource  Locator  (  URL)  is  the  global  address  for  documents  and  other  resources  on  the  World 
 Wide  Web.  The  first  part  of  the  address  indicates  what  protocol  to  use,  i.  e.,  http,  and  the  second  part  specifies  the  IP  address  or  the  domain  name  where  the  resource  is  located,  i.  e.,  fcc.  gov.  See  Webopedia,  URL  Definition,  at 


 http://  www.  webopedia.  com/  TERM/  U/  URL.  html  (visited  Jan.  10,  2002).  47 
 For  example,  AOL  charges  $14.95  a  month  for  its  Bring  Your  Own  Access  service.  Yahoo!  and  MSN  Hotmail  do  not  charge  a  fee  for  similar  services.  See  America  Online,  AOL  Pricing  Plans,  at 


 http://  www.  aol.  com/  info/  pricing.  html  (visited  Jan.  9,  2002);  Yahoo,  Yahoo!  Terms  of  Service,  at  http://  docs.  yahoo.  com/  info/  terms/  (visited  Jan.  9,  2002);  MSN,  Hotmail  Information  -  Frequently  Asked  Questions  at 
 http://  www.  msn.  com  (visited  Jan.  9,  2002).  48 
 Many  cable  systems  had  some  upstream  capability,  i.  e.,  ability  for  the  subscriber  to  transmit  information  back  to  the  cable  operator  through  the  cable  system,  even  before  systems  were  upgraded  to  provide  cable  modem  service, 


 but  this  tended  to  be  for  simple,  user-  to-  system  messages,  such  as  ordering  pay-  per-  view  programs.  See  CableLabs,  DOCSIS  Project  Primer,  at  http://  www.  cablemodem.  com/  docsisprimer.  html  (visited  Jan.  10,  2002). 
 49  Newer  cable  systems,  such  as  those  constructed  by  overbuilders,  generally  are  designed  to  provide  an  array  of 
 services,  including  advanced  services  such  as  cable  modem  service.  These  systems  typically  are  constructed  to  (continued....) 
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 (  HFC)  architecture.  50  The  HFC  architecture  generally  converts  the  typical  cable  tree-  and-  branch  infrastructure  to  a  ring  or  star-  type  infrastructure  and  increases  the  reliability  and  the  overall  bandwidth 
 available  for  cable  modem  service,  video  programming,  and  other  services.  51  Typically  in  an  HFC-upgraded  system,  fiber  optic  cables  are  laid  from  the  headend  to  neighborhood  nodes.  52  Coaxial  cables 
 extend  from  the  nodes  to  each  subscribers  home.  Cable  operators  allocate  a  portion  of  their  systems  spectrum  (i.  e.,  bandwidth  or  channel  capacity)  for  upstream  and  downstream  data  transmissions  necessary 
 for  cable  modem  service.  53  At  each  subscribers  home,  a  splitter  and  a  high-  speed  cable  modem  are  installed.  The  splitter  separates  signals  and  sends  them  to  different  cables  going  to  the  subscribers 
 television  and  computer.  The  cable  that  goes  to  the  computer  connects  with  a  high-  speed  cable  modem  and  an  Ethernet  or  Universal  Serial  Bus  (  USB)  interface  that  are  attached  to  the  computer.  This  modem 
 and  interface  enable  the  cable  system  to  communicate  with  the  subscribers  computer,  and  vice  versa.  54 
 13.  Cable  modem  service  requires  special  equipment  at  the  headend  and  in  other  parts  of  the  cable  system.  Often  located  at  the  headend  is  a  Cable  Modem  Termination  System  (  CMTS),  which 


 manages  the  flow  of  data  between  cable  subscribers  and  the  Internet  and  other  equipment.  55  The  CMTS  enables  the  enhanced  two-  way  capabilities  essential  for  cable  modem  service.  56  File  servers  for  data 
 storage  within  the  cable  system  and  other  types  of  Internet-  related  servers,  switches,  and  high-  speed 


 (...  continued  from  previous  page)  modern  specifications  and  can  provide  advanced  services  without  additional  upgrades.  See  generally  Letter  from 
 Charles  A.  Rohe  and  D.  Anthony  Mastando,  Counsel,  Carolina  BroadBand,  Inc.  to  Magalie  Roman  Salas,  Secretary,  FCC,  WT  Docket  No.  99-  217,  CC  Docket  Nos.  96-  98,  88-  57,  CS  Docket  No.  95-  184,  MM  Docket  No.  92-  260  (May 
 3,  2001).  50 
 See  generally  NAS  Broadband  Report,  Appendix  A  at  245-  55.  51 
 As  of  June  2001,  many  major  MSOs  had  significantly  upgraded  their  networks.  See  Annual  Assessment  of  the  Status  of  Competition  in  the  Market  for  the  Delivery  of  Video  Programming,  CS  Docket  No.  01-  129,  Eighth  Annual 


 Report,  FCC  01-  389,    32-  33  (rel.  Jan.  14,  2002)  (  2001  MVPD  Competition  Report).  52 
 A  headend  is  the  origination  point  for  signals  in  the  cable  system.  Each  local  service  area  is  typically  served  by  one  or  more  headends.  The  headend  has  parabolic  or  other  appropriately  shaped  antennas  for  receiving  satellite-delivered 


 program  signals,  high-  gain  directional  antennas  for  receiving  distant  TV  broadcast  signals,  directional  antennas  for  receiving  local  signals,  machines  for  playback  of  taped  programming  and  commercial  insertion,  and 
 studios  for  local  origination  and  community  access  programming.  See  WALTER  CICIORA  AT  AL.,  MODERN  CABLE  TELEVISION  TECHNOLOGY  12  (1999).  The  headend  may  also  house  equipment  to  connect  the  cable  system  to  the 
 Internet.  Id.;  see  also  Letter  from  Steven  N.  Teplitz,  Vice  President  and  Associate  General  Counsel,  AOL  Time  Warner,  to  Royce  Sherlock,  Deputy  Chief,  Policy  and  Rules  Division,  Cable  Services  Bureau,  FCC  (January  22, 
 2002)  (  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte)  at  4-  5.  53 
 See  supra  note  8;  see  also  Kinetic  Strategies,  Inc.,  Overview  of  Cable  Modem  Technology  and  Services,  at  http://  www.  cabledatacomnews.  com/  cmic/  cmic1.  html  (visited  Jan.  9,  2002);  Dan  Costa,  Cable:  This  Technology  is 


 the  Simplest  and  Most  Popular  Option,  ZDNET,  Dec.  14,  2001,  at  http://  msn.  zdnet.  com/  msn/  zdnet/  story/  0,  12461,  2671130-  hud00025inmn1,  00.  html. 
 54  See  Kinetic  Strategies,  Inc.,  Transport  Diagram  -  Home  Environment,  at 
 http://  www.  cabledatacomnews.  com/  cmic/  home.  html  (visited  Jan.  9,  2001);  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  4-  5. 


 55  We  recognize  that  when  a  cable  modem  service  subscriber  initiates  his  cable  modem  service,  the  cable  modem 
 service  subscribers  computer  becomes  a  part  of  the  Internet,  i.  e.,  the  network  of  networks  and  computers.  56 
 See  generally  Letter  from  Betsy  J.  Brady,  Vice  President,  Federal  Government  Affairs,  AT&  T,  to  Magalie  Roman  Salas,  Secretary,  FCC  (Dec.  18,  2001),  (  AT&  T  Dec.  18,  2001  Ex  Parte),  Attachment  (  AT&  T  Broadband  Choice 


 Program  Status)  at  12-  16;  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  5. 
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 routers  that  manage  data  flow  on  the  Internet  are  often  located  at  regional  data  centers.  57 
 14.  In  addition  to  the  network  improvements  just  described,  a  cable  operator  must  establish  a  connection  to  the  Internet  in  order  to  provide  cable  modem  service.  58  Depending  on  network  topologies 


 and  business  arrangements  between  the  cable  operator  and  other  entities,  Internet  connectivity  to  the  cable  plant  can  be  accomplished  by  various  methods,  as  discussed  below  in  relation  to  business  models.  In  one 
 scenario,  the  cable  operator  provides  the  Internet  connectivity,  either  by  itself  or  in  conjunction  with  a  single  affiliated  or  unaffiliated  ISP.  In  a  second  scenario,  the  cable  operator  may  offer  more  than  one 
 brand  of  cable  modem  service,  in  effect  giving  subscribers  a  choice  of  various  ISPs.  In  this  model,  an  unaffiliated  ISP  delivers  its  content  and  services  over  the  cable  system  to  subscribers  through  one  of  two 
 different  methods:  (1)  via  the  cable  operators  (or  affiliated  ISPs)  own  Internet  transport  (backbone)  arrangements,  commonly  referred  to  as  transit;  or  (2)  via  a  direct  interconnection  agreement  between 
 the  cable  operator  (or  affiliated  ISP)  and  the  unaffiliated  ISP.  59 
 15.  This  second  method  of  achieving  Internet  connectivity  in  a  multiple-  ISP  environment  may  require  the  deployment  of  certain  additional  facilities  and  systems  depending  upon  the  chosen 


 technological  solution,  such  as  the  installation  of  new  routers  that  perform  source-  based  routing  60  or  destination-  based  routing  61  to  allow  the  cable  operator  to  selectively  redirect  data  packets  to  each  ISP,  and 
 sufficient  operations  support  systems  (  OSS)  62  to  properly  maintain  billing  and  other  essential  operational  functions.  Routing  techniques,  such  as  source-  based  routing,  may  be  difficult  for  cable 
 operators  to  manage  and  integrate  and  may  present  problems  with  regard  to  scalability,  i.  e.,  the  numbers  of  ISPs  and  subscribers  that  can  be  served.  63  Cable  operators  may  also  face  other  technical  challenges  in 
 a  multiple-  ISP  environment,  such  as  bandwidth  management,  subscriber  IP  address  assignment 
 57  Regional  data  centers,  sometimes  referred  to  in  whole  or  in  part  as  super  headends  or  master  headends,  are 
 facilities  that  process,  store,  and  manage  data  transmitted  through  cable  modem  service.  Regional  data  centers  are  located  upstream  of  headends,  in  general,  and  may  serve  many  headends.  See  AT&  T  Dec.  18,  2001  Ex  Parte, 


 Attachment  at  11-  16;  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  5.  58 
 See  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  9,  12-  16;  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  5.  59 
 See  AT&  T  Dec.  15,  2000  Ex  Parte,  Attachment  (  AT&  T  Broadband  Choice  Trial  -  Boulder,  Colorado);  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  5. 


 60  See  AT&  T  Dec.  15,  2000  Ex  Parte,  Attachment  (  AT&  T  Broadband  Choice  Trial  -  Boulder,  Colorado).  Source-based 
 routing  allows  cable  operators  to  determine  and  implement  routing  policies  to  allow  or  deny  paths  based  on  the  identity  of  the  source  system,  the  application  being  run,  the  protocol  in  use,  and  the  size  of  packets.  Source-based 


 routing  provides  a  mechanism  to  label  packets  in  order  to  route  them  to  different  ISPs.  Source-  based  routing  was  used  in  the  AT&  T  Broadband  choice  (multiple-  ISP)  trial  in  Boulder,  Colorado,  in  November  2000.  See  id. 
 61  See  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  5.  Destination-  based  routing  sends  packets  of  information  from 
 the  subscribers  PC  to  the  cable  network  to  locations  on  the  Internet  based  on  the  best  match  of  the  destination  address  (for  each  packet)  at  each  router.  See  id.;  AT&  T  Dec.  15,  2000  Ex  Parte,  Attachment. 


 62  See  generally  47  C.  F.  R.    51.  319(  g)  (  Operations  support  system  functions  consist  of  pre-  ordering,  ordering, 
 provisioning,  maintenance  and  repair,  and  billing  functions  supported  by  an  incumbent  LECs  (local  exchange  carriers)  databases  and  information.);  Application  by  Bell  Atlantic  New  York  for  Authorization  under  Section  271 


 of  the  Communications  Act  to  Provide  In-  Region,  InterLATA  Service  in  the  State  of  New  York,  15  FCC  Rcd  3953,  3989-  3990    83  (  Incumbent  LECs  use  a  variety  of  systems,  databases,  and  personnel  (collectively  referred  to  as 
 OSS)  to  provide  service  to  their  customers.)  We  recognize  that  the  OSS  for  the  cable  multiple-  ISP  context  will  differ  in  certain  respects  from  the  incumbent  LEC  Section  271  context.  In  both  cases,  however,  the  OSS  includes  or 
 would  include  the  same  basic  functions  of  pre-  ordering,  ordering,  provisioning,  maintenance,  and  repair  functions  associated  with  allowing  unaffiliated  entities,  i.  e,,  competitive  LECs  or  ISPs,  to  provide  service  over  the  incumbent 
 LEC  or  cable  operators  facilities.  63 
 See  AT&  T  Dec.  15,  2000  Ex  Parte,  Attachment;  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  (  Multi-  ISP  Access  Technical  Landscape)  at  13-  23. 
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 management,  and  network  security.  64  Multiple-  ISP  access  is  occurring  in  the  marketplace  and  in  trials  however,  using  various  routing  techniques.  65 
 16.  Cable  modem  service  typically  requires  the  performance  of  a  number  of  specific  functions.  Cable  operators  may  self-  provide  all  of  these  functions,  or  they  may  contract  with  affiliated  or 
 unaffiliated  ISPs  to  provide  some  or  all  of  them.  66  The  functions  can  be  categorized  as  Internet  connectivity,  enhanced  applications,  operations,  and  customer  service.  67 


 17.  Internet  connectivity  functions  enable  cable  modem  service  subscribers  to  transmit  data  communications  to  and  from  the  rest  of  the  Internet.  68  At  the  most  basic  level,  these  functions  include  69 
 establishing  a  physical  connection  between  the  cable  system  and  the  Internet  70  by  operating  or  interconnecting  with  Internet  backbone  facilities.  71  In  addition,  these  functions  may  include  protocol 
 conversion,  72  IP  address  number  assignment,  73  domain  name  resolution  through  a  domain  name  system 


 64  See  AT&  T  Dec.  15,  2000  Ex  Parte,  Attachment. 
 65  See  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  5;  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  20.  In 
 addition  to  source-  based  and  destination-  based  routing,  other  possible  routing  techniques  include  Point  to  Point  Protocol  over  Ethernet  (  PPPoE)  and  Layer  Two  Tunneling  Protocol  (  L2TP)  tunneling.  PPPoE  and  L2TP  are 


 tunneling  protocols  that  enable  a  Point  to  Point  Protocol  (  PPP)  session  between  the  subscriber  and  the  specified  ISP.  A  tunnel  is  a  virtual  dedicated  connection  between  two  points  in  a  network.  Tunneling  allows  data  to  traverse 
 through  an  intervening  network  of  a  different  protocol  and  works  by  encapsulating  data  from  one  protocol  format  into  another  protocol  format.  PPPoE  enables  PPP  to  run  over  bridged  networks,  and  L2TP  enables  PPP  to  run  over 
 routed  networks.  See  Letter  from  Emy  Tseng,  MIT,  et  al.  to  Magalie  Roman  Salas,  Secretary,  FCC  in  CS  Docket  No.  00-  30  (May  1,  2000),  Attachment  at  16-  17. 
 66  For  present  purposes,  we  use  the  term  ISP  to  refer  to  entities  as  described  above  in  footnote  43,  recognizing  that 
 some  providers  may  perform  services  or  functions  in  addition  to  those  indicated.  See,  e.  g.,  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  2-  6. 


 67  For  a  general  description  of  cable  modem  service  and  its  underlying  technology,  see  RODERICK  W.  SMITH, 
 BROADBAND  INTERNET  CONNECTIONS,  Addison-  Wesley  Pub.  (Jan.  2002).  68 
 See  generally  Letter  from  Marvin  S.  Rappaport,  Vice  President  Public  Policy,  Charter  Communications,  to  Magalie  Roman  Salas,  Secretary,  FCC  (Dec.  12,  2001)  (  Charter  Dec.  12,  2001  Ex  Parte)  passim;  Cox  Aug.  15, 


 2001  Ex  Parte  at  4-  5.  See  supra  note  54.  69 
 We  recognize  that  not  all  cable  operators  include  all  of  these  functions  in  their  cable  modem  service  offerings.  70 
 The  common  term  demarcation  point  is  used  to  define  that  point  at  which  operational  control  or  ownership  of  communications  facilities  changes  from  one  organizational  entity,  e.  g.,  a  cable  company,  to  another  entity,  e.  g.,  an 


 ISP.  The  demarcation  point  is  used  to  establish  a  common  point  whereby  the  cable  company  and  an  ISP  can  separate  the  portion(  s)  of  the  network  and  its  functions  for  which  each  has  responsibility.  This  demarcation  point 
 with  regard  to  cable  modem  service  is  usually  a  point  within  the  headend  and  could  be  found  on  a  piece  of  equipment  where  the  ISPs  Internet  backbone  trunk,  e.  g.,  an  OC-  3,  is  terminated  (on  a  switch,  router  or  CMTS)  in 
 order  to  receive  the  hand  off  or  transition  from  the  cable  operators  plant  to  the  Internet.  In  an  alternative  approach,  the  cable  company  provisions  its  own  backbone  to  the  Internet  from  the  headend.  In  this  case,  the  demarcation  point 
 is  where  the  cable  operators  backbone  from  the  CMTS  terminates  and  routes  to  a  gateway  switch  at  an  ISPs  Point  of  Presence  (  POP),  which  connects  to  the  Internet.  See  generally  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at 
 11.  71 
 See  generally  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  4-  6,  12;  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  11-  16. 


 72  Protocol  conversion  is  a  data  communications  procedure  that  permits  computers  with  different  protocols  or 
 computer  languages  to  communicate  with  each  other.  See  NEWTONS  TELECOM  DICTIONARY  553  (17  th  ed.  2001).  73 
 See  generally  Cox  Aug.  15,  2001  Ex  Parte  at  15-  17.  The  Dynamic  Host  Configuration  Protocol  (  DHCP)  server  assigns  an  IP  address  to  the  cable  modem  so  that  routers  connected  to  the  Internet  will  recognize  the  location  of  the 


 (continued....) 
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 (DNS),  74  network  security,  75  and  caching.  76  Network  monitoring,  capacity  engineering  and  management,  77  fault  management,  78  and  troubleshooting  79  are  Internet  access  service  functions  that  are 
 (...  continued  from  previous  page)  modem  for  communications  to  and  from  the  Internet.  IP  addresses  are  the  locating  identification  for  computers  or 
 devices  that  connect  to  the  Internet  or  other  Transfer  Control  Protocol  /  Internet  Protocol  (  TCP/  IP)  network.  Networks  using  the  TCP/  IP  protocol  route  messages  based  on  the  IP  address  of  the  destination.  The  format  of  an 
 IPv4  address  is  a  32-  bit  numeric  address  written  as  four  numbers  separated  by  periods.  Each  number  can  be  from  zero  to  255.  For  example,  1.160.10.  240  could  be  an  IP  address.  See  Webopedia,  IP  Address  -  Definition,  at 
 http://  www.  webopedia.  com/  TERM/  I/  IP_  address.  html  (visited  Jan.  10,  2002).  74 
 See  Cox  Aug.  15,  2001  Ex  Parte  at  4-  5  n.  15;  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  9,  12,  19.  A  DNS  is  an  Internet  service  that  enables  the  translation  of  domain  names  into  IP  addresses.  When  queried  about  a 


 domain  name,  a  DNS  server  provides  the  querier  with  the  IP  address  of  the  domain  name  or  the  IP  address  of  another  DNS  server  that  may  provide  the  IP  address  of  the  domain  name  if  the  original  DNS  server  does  not  how  to 
 translate  a  particular  domain  name.  Thus,  in  effect,  a  DNS  acts  as  its  own  network.  See  Webopedia,  DNS,  at  http://  www.  webopedia.  com/  TERM/  D/  DNS.  html  (visited  Feb.  19,  2002).  This  translation  process  is  necessary 
 because  routing  of  traffic  over  the  Internet  is  based  on  IP  addresses,  not  domain  names.  As  a  result,  before  a  browser  can  send  a  packet  to  a  website,  it  must  obtain  the  address  for  the  site.  See  Webopedia,  Domain  Name,  at 
 http://  www.  webopedia.  com/  TERM/  D/  domain_  name.  html  (visited  Jan.  10,  2002).  A  domain  name  is  a  name  that  identifies  one  or  more  IP  addresses.  For  example,  the  domain  name  microsoft.  com  represents  about  a  dozen  IP 
 addresses.  Domain  names  are  used  in  URLs  to  identify  particular  web  pages.  For  example,  in  the  URL  http://  www.  fcc.  gov,  the  domain  name  is  fcc.  gov.  Id.;  see  also  47  U.  S.  C.    1127  (  The  term  domain  name  means 
 any  alphanumeric  designation  which  is  registered  with  or  assigned  by  any  domain  name  registrar,  domain  name  registry,  or  other  domain  name  registration  authority  as  part  of  an  electronic  address  on  the  Internet). 


 For  more  information  regarding  the  DNS,  see  J.  Postel,  IETF  RFC  1591,  Domain  Name  System  Structure  and  Delegation  (Mar.  1994)  at  http://  www.  isi.  edu/  in-  notes/  rfc1591.  txt  (visited  Feb.  19,  2002).  Concerning  the 
 importance  of  the  DNS  to  Internet  access  service,  see  MCGRAW  HILL  ENCYCLOPEDIA  OF  NETWORKING  &  TELECOMMUNICATIONS  390  ("  DNS  servers  are  strategically  located  on  the  Internet.  There  is  usually  one  either 
 directly  accessible  to  your  system  or  accessible  over  as  few  as  one  router  hop,  .  .  .  Most  Internet  service  providers  have  DNS  servers.")  (2001);  Werbach  Paper  at  30  ("  Internet  users  generally  do  not  need  to  specify  the  IP  number  of 
 the  destination  site,  because  IP  numbers  can  be  represented  by  alphanumeric  'domain  names'  such  as  'fcc.  gov'  or  'ibm.  com.  '  'Domain  name  servers'  throughout  the  network  contain  tables  that  cross  reference  these  domain  names 
 with  their  underlying  IP  numbers").  75 
 See  Cablevision  Systems  Corp.,  Cablevision  Optimum  Online  -  Privacy  Policy,  at  http://  www.  optimumonline.  com/  retail/  r_  generic/  1,  2994,  21,00.  html#  7  (visited  Jan.  10,  2002);  Cox  Aug.  15,  2001  Ex 


 Parte  at  4-  5  n.  15;  AT&  T  Dec.  15,  2000  Ex  Parte,  Attachment  (  AT&  T  Broadband  Choice  Trial  -  Boulder,  Colorado). 
 76  Caching  is  the  storing  of  copies  of  content  at  locations  in  the  network  closer  to  subscribers  than  their  original 
 sources,  i.  e.,  data  from  websites,  that  subscribers  wish  to  see  most  often  in  order  to  provide  more  rapid  retrieval  of  information.  See  generally  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  11-  16;  AOL  Time  Warner  Jan.  22,  2002 


 Ex  Parte  at  5.  77 
 See  generally  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  9;  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  4-  6,  12.  Capacity  engineering,  planning  and  management,  also  known  as  configuration  and 


 performance  management,  refers  to  the  ability  to  measure,  analyze,  track,  and  forecast  consumption  or  use  of  network  assets  to  meet  and  maintain  Service  Level  Agreements  (  SLAs)  of  consumers  on  the  network.  An  SLA  is 
 an  agreement  between  a  user  and  a  service  provider  defining  the  nature  of  the  service  provided  and  establishing  a  set  of  metrics  to  be  used  to  measure  the  level  of  service  provided  measured  against  the  agreed  level  of  service.  Such 
 service  levels  might  include  provisioning,  average  availability,  restoration  times  for  outages,  average  and  maximum  periods  of  outage,  average  and  maximum  response  times,  latency,  and  delivery  speeds.  The  SLA  also  typically 
 establishes  trouble  reporting  procedures,  escalation  procedures,  and  penalties  for  not  meeting  the  level  of  service  demanded    typically  refunds  to  the  users.  See  NEWTONS  TELECOM  DICTIONARY  616  (17  th  ed.  2001).  Assets 
 include  a  data  lines  capacity  (bandwidth  in  bits  per  second),  ports  available,  and  card  configurations  in  switches  and  routers.  Other  tasks  include  design  of  network  topology,  sizing  of  backbone  trunks  (e.  g.,  OC-  3  at  155.52  Megabits 
 per  second  up  to  OC-  192  at  9.953  Gigabits  per  second),  routing  of  traffic  across  the  network,  documentation  of  (continued....) 
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 generally  performed  at  an  ISP  or  cable  operators  Network  Operations  Center  (NOC)  80  or  back  office  and  serve  to  provide  a  steady  and  accurate  flow  of  information  between  the  cable  system  to  which  the 
 subscriber  is  connected  and  the  Internet.  81 
 18.  Complementing  the  Internet  access  functions  are  Internet  applications  provided  through  cable  modem  service.  These  applications  include  traditional  ISP  services  such  as  e-  mail,  access  to  online 


 newsgroups,  and  creating  or  obtaining  and  aggregating  content.  82  The  cable  modem  service  provider  will  also  typically  offer  subscribers  a  first  screen  or  home  page  83  and  the  ability  to  create  a  personal  web 
 page.  84 
 19.  Finally,  the  cable  modem  service  provider  must  provide  practical  operational  and  customer  service  functions  in  order  for  subscribers  to  utilize  the  service.  The  subscriber  must  have  a 


 computer  system  and  a  working  cable  modem  connected  via  an  Ethernet  or  USB  interface  to  establish  cable  modem  service.  85  As  a  result,  the  cable  modem  service  provider  may  offer  the  installation  of 


 (...  continued  from  previous  page)  customer  network  assignments  (e.  g.,  device  and  port  number,  IP  address,  and  configurations),  support  for 
 troubleshooting  efforts,  and  study/  documentation  of  usage  patterns/  trends.  See  id.  78 
 See  generally  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  4-  6,  12;  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  9.  Fault  management  refers  to  the  ability  to  detect,  isolate  and  correct  conditions  that  degrade  or 


 destroy  computer  (hardware  and  software)  or  network  functionality.  See  NEWTONS  TELECOM  DICTIONARY  270  (17  th  ed.  2001). 
 79  See  generally  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  9;  Excite@  Home  Aug.  17,  2001  Ex  Parte, 
 Attachment  4-  6,  12.  80 
 Network  Operations  Center  is  a  central  place  which  monitors  the  status  of  a  corporate  network  and  sends  out  instructions  to  repair  bits  and  pieces  of  the  network  when  they  break.  In  more  formal  terms,  its  functions  include  the 


 monitoring  of  network  status,  supervision  and  coordination  of  network  maintenance,  accumulation  of  accounting  and  usage  data,  and  user  support.  See  NEWTONS  TELECOM  DICTIONARY  473  (17  th  ed.  2001). 
 81  See  generally  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  9;  Excite@  Home  Aug.  17,  2001  Ex  Parte, 
 Attachment  4-  6,  12.  82 
 See,  e.  g.,  Road  Runner,  Residential  Service:  What  is  Road  Runner?  at  http://  rrcorp.  central.  rr.  com/  hso/  whatis.  asp  and  Residential  Service:  Features,  at  http://  rrcorp.  central.  rr.  com/  hso/  explore_  features.  asp  (describing  Road  Runner, 


 a  high-  speed  Internet  access  service)  (visited  Jan.  10,  2002).  83 
 In  general,  a  first  screen  or  home  page  is  the  screen  that  comes  up  first  when  the  user  initiates  interaction  with  his  or  her  cable  modem  service  provider  or  ISP,  for  example,  by  clicking  on  the  ISPs  desktop  icon  or  accessing  the 


 ISP  via  the  World  Wide  Web.  See  FCC  AOL  Time  Warner  Order,  16  FCC  Rcd  at  6601    126  n.  360.  Typically,  a  subscriber  is  able  to  change  the  first  screen  to  the  web  page  of  his  choice,  although  the  cable  operator  usually 
 provides  a  default  first  screen.  See  Christopher  Stern,  Comcast  to  Open  High-  Speed  Internet  Network  to  Rival  ISP,  Washington  Post  (Feb.  26,  2002)  (indicating  that  Juno  and  NetZero  customers  receiving  high-  speed  Internet  service 
 from  NetZero  or  Juno  on  a  Comcast  cable  system  will  be  greeted  by  a  NetZero  or  Juno  web  page  when  they  initially  launch  their  service). 
 84  See  supra  note  34. 
 85  See  generally  Cox  Aug.  15,  2001  Ex  Parte  at  4-  5;  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  5-  6,  9; 
 AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  4-  5.  With  the  development  of  the  CableLabs    DOCSIS  standard  for  modem  compatibility,  commercial  sales  of  cable  modems  are  possible.  See  Annual  Assessment  of  the  Status  of 


 Competition  in  Markets  for  the  Delivery  of  Video  Programming,  CS  Docket  No.  98-  102,  Fifth  Annual  Report,  13  FCC  Rcd  24284,  24318-  19  (1998).  CableLabs  is  a  non-  profit  research  and  development  organization  created  in 
 1988  by  a  consortium  of  cable  operators  representing  North  America  and  South  America,  purposed  to  develop  new  technologies  for  the  cable  industry  and  to  serve  as  a  clearinghouse  of  information  regarding  technological 
 developments  impacting  the  cable  industry.  See  CableLabs,  Fact  Sheet  at  http://  www.  cablelabs.  com/  about_  cl/  factSheet.  html  (visited  Feb.  19,  2002). 
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 hardware  and  software  in  the  subscribers  computer,  any  wiring  of  the  subscribers  premises  that  may  be  necessary,  and  simple  and  complex  customer  service,  as  well  as  technical  support.  86  The  cable  modem 
 service  provider  must  also  develop  and  implement  OSS  in  order  to  properly  bill,  provision,  and  manage  the  accounts  of  its  subscribers.  87  Finally,  cable  modem  service  providers  must  provide  for  the  sales  and 
 marketing  of  the  service  to  solicit  and  obtain  new  customers.  88 
 20.  Business  Models.  Cable  operators  offer  cable  modem  service  to  their  customers  using  a  variety  of  business  models,  many  of  which  are  currently  under  transition.  Some  operators  self-  provide, 


 while  others  provide  service  in  conjunction  with  affiliated  or  unaffiliated  entities.  Some  operators  have  chosen  to  employ  the  same  model  throughout  all  of  their  systems  nationally,  while  others  have  chosen  to 
 utilize  different  models  in  different  locales.  Currently,  however,  most  MSOs  only  offer  one  brand  of  cable  modem  service  on  any  given  cable  system.  89 


 21.  Historically,  most  operators  have  self-  provided  cable  modem  service  or  have  provided  the  service  in  conjunction  with  one  of  several  ISPs  specifically  created  and  owned  by  the  cable  operators 
 themselves.  These  affiliated  entities  provided  many  of  the  functions  of  cable  modem  service.  Excite@  Home,  for  example,  was  founded  by  a  consortium  of  cable  operators  (including  TCI,  Cox,  and 
 Comcast)  to  provide  comprehensive  networking  and  systems  integration  services  to  support  cable  modem  service.  90  Excite@  Home  filed  for  Chapter  11  bankruptcy  protection  in  September  2001  and  ceased 
 operations  entirely  on  February  28,  2002.  91  Prior  to  its  demise,  however,  it  provided  service  to  many  financially  affiliated  and  unaffiliated  cable  operators.  Affiliated  entities  included  AT&  T  (formerly  TCI), 
 Comcast,  Cox,  and  Cablevision.  92  Unaffiliated  cable  operators  that  formed  cooperative  agreements  with 
 86  See  generally  Cox  Aug.  15,  2001  Ex  Parte  at  4-  5;  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  4-  6; 
 Bova  Statement  of  Facts,  supra  note  31,  at  2-  3.  87 
 See  generally  Cox  Aug.  15,  2001  Ex  Parte  at  4-  5;  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  4-  7;  Bova  Statement  of  Facts,  supra  note  31,  at  2-  3;  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  8. 


 88  See  generally  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  8,  10. 
 89  See  Morgan  Stanley  July  2001  Report,  at  31. 
 90  The  At  Home  Corporation  (@  Home)  was  founded  in  1995  by  TCI  (now  AT&  T)  and  venture  capital  firm 
 Kleiner  Perkins  Caufield  &  Byers.  In  1996,  @Home  received  equity  investments  from  Comcast  Corp.  and  Cox  Communications  Inc.  Canadian  Multiple  System  Operators  (  MSOs)  Rogers  Cablesystems  Ltd.,  and  Shaw 


 Communications,  along  with  Sun  Microsystems,  also  purchased  equity  stakes  in  @Home  through  a  private  stock  placement  in  April  1997.  The  company  went  public  in  July  1997,  and  Cablevision  Systems  Corp.  purchased  an 
 equity  stake  in  the  venture  in  October  1997  in  return  for  distribution  of  the  @Home  service  in  certain  of  its  systems.  At  Home  Corp.,  SEC  Filing  10-  K  for  the  Year  Ended  December  31,  2000,  at  4;  Annual  Assessment  of  the  Status  of 
 Competition  in  Markets  for  the  Delivery  of  Video  Programming,  CS  Docket  No.  97-  141,  Fourth  Annual  Report,  13  FCC  Rcd  1034,  1066,  n.  150  (1998). 
 91  Rachel  Konrad  and  Alorie  Gilbert,  Book  Closes  on  Excite@  Home,  CNET  NEWS.  COM,  Feb  28,  2002,  at 
 http://  story.  news.  yahoo.  com/  news?  tmpl=  story&  u=/  cn/  20020301/  tc_  cn/  book_  closes_  on_  excite_  home;  At  Home  Corp.,  Excite@  Home  Reduces  Workforce  as  Operations  Wind  Down:  Operations  Expected  to  Cease  After  February 


 28,  2002  (press  release),  Dec.  14,  2001.  See  infra  n.  121.  92 
 See  At  Home  Corp.,  SEC  Filing  10-  K  for  the  Year  Ended  December  31,  2000,  at  3.  TCI,  Cox,  and  Comcast  were  the  original  investors  in  @Home.  In  1999,  AT&  T  acquired  TCI  including  all  of  its  cable  systems  as  well  as  its 


 partnership  in  @Home.  When  AT&  T  acquired  MediaOne  in  2000,  Media  One  was  using  Road  Runner  to  provide  cable  modem  service.  Following  the  dissolution  of  the  Road  Runner  partnership  and  the  bankruptcy  of 
 Excite@  Home,  AT&  T  moved  all  Road  Runner  and  @Home  subscribers  to  its  own  network.  AT&  T-  TCI  Merger  Order,  14  FCC  Rcd  3160    7;  AT&  T-  MediaOne  Merger  Order,  15  FCC  Rcd  at  9831    28;  Time  Warner 
 Entertainment  Co.,  LP,  SEC  Filing  10-  K  for  the  Year  Ended  December  31,  2000,  at  I-  4;  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  5;  At  Home  Corp.,  Excite@  Home  Reduces  Workforce  as  Operations  Wind  Down:  Operations 
 Expected  to  Cease  After  February  28,  2002  (press  release),  Dec.  14,  2001;  At  Home  Corp.,  Excite@  Home  Provides  Status  of  Negotiations  with  Cable  Companies  (press  release),  Dec.  1,  2001. 
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 Excite@  Home  included  Charter,  Adelphia,  Insight,  Cogeco,  MidContinent,  Videon,  and  MediaCom.  93  Another  ISP,  Road  Runner,  was  also  created  by  cable  operators  to  provide  many  of  the  functions  of  cable 
 modem  service.  Originally  formed  by  Time  Warner  Cable,  Road  Runner  later  became  a  partnership  between  Time  Warner  and  MediaOne.  94  Road  Runner  provided  cable  modem  service  to  both  operators 
 exclusively.  95  High-  Speed  Access  Corp.,  while  created  independently,  was  subsequently  acquired  in  part,  by  Vulcan  Ventures,  the  parent  company  of  cable  operator  Charter  Communications.  96  Historically,  High 
 Speed  Access  Corp.  contracted  with  Charter  Communications  and  several  smaller  operators  to  provide  turn  key  services,  which  entailed  not  only  Internet  connectivity  and  services  such  as  e-  mail  and  web-hosting, 
 but  also  equipment,  network  management,  and  in  some  cases  billing  and  customer  service  functions.  97  In  2001,  however,  High  Speed  Access  Corp.  filed  for  bankruptcy  and  sold  substantially  all  of 
 its  assets  to  Charter  Communications,  choosing  to  exit  all  of  its  turn  key  contracts  with  cable  operators  other  than  Charter.  98 


 93  At  Home  Corp.,  SEC  Filing  10-  K  for  the  Year  Ended  December  31,  2000,  at  5. 
 94  In  1996,  Time  Warner  Cable  and  Time  Inc.  New  Media  formed  The  Road  Runner  Group  as  a  separate  business 
 unit  to  develop  and  deploy  high-  speed  cable  data  services.  In  December  1997,  Time  Warner  and  MediaOne  (later  acquired  by  AT&  T)  formed  an  alliance  and  merged  their  cable  Internet  operations.  Time  Warner  Entertainment  Co., 


 LP,  SEC  Filing  10-  K  for  the  Year  Ended  December  31,  2000,  at  I-  3;  Kinetic  Strategies,  Inc.,  Cable  Internet  Service  Providers  and  Systems  Integrators,  CABLE  DATACOM  NEWS,  at  http://  www.  cabledatacomnews.  com/  cmic/  cmic 
 5.  html  (visited  Jan.  11,  2002);  see  Annual  Assessment  of  the  Status  of  Competition  in  Markets  for  the  Delivery  of  Video  Programming,  CS  Docket  No.  98-  102,  Fifth  Annual  Report  (  Fifth  Annual  Video  Competition  Report),  13 
 FCC  Rcd  24284,  24316    56  (1998).  The  Road  Runner  partnership  has  dissolved,  distributing  substantially  all  of  the  Road  Runner  assets  to  AOL  Time  Warner,  which  continues  to  offer  service  under  the  Road  Runner  brand  name. 
 Time  Warner,  Inc.,  Time  Warner  to  Increase  Road  Runner  Ownership  and  Merge  its  Operations  (press  release),  Dec.  18,  2000;  Time  Warner  Entertainment  Co.,  LP,  SEC  Filing  10-  K  for  the  Year  Ended  December  31,  2000,  at  I-4; 
 AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  1.  95 
 Time  Warner  Entertainment  Co.,  LP,  SEC  Filing  10-  K  for  the  Year  Ended  Dec  31,  2000,  at  I-  3  and  I-  4;  Kinetic  Strategies,  Inc.,  Cable  Internet  Service  Providers  and  Systems  Integrators,  CABLE  DATACOM  NEWS,  at 


 http://  www.  cabledatacomnews.  com/  cmic/  cmic5.  html  (visited  Jan.  11,  2002);  see  also  Fifth  Annual  Video  Competition  Report,  13  FCC  Rcd  at  24316    56.  Some  Time  Warner  and  MediaOne  systems  were  sold  to  other 
 cable  operators  which  retained  the  Road  Runner  service.  AT&  T,  for  example,  acquired  Road  Runner  subscribers  when  it  acquired  cable  operator  MediaOne.  However,  AT&  T  is  in  the  process  of  transitioning  those  subscribers  to 
 the  AT&  T  network.  AT&  T  Dec  18,  2001  Ex  Parte,  Attachment  at  5.  Cox  also  acquired  Road  Runner  subscribers  through  the  acquisition  of  certain  systems,  and  is  in  the  process  of  transitioning  those  subscribers  to  Coxs 
 proprietary  Cox  High  Speed  Internet  service.  Cox  Communications,  Inc.,  Cox  Communications  Announces  Agreement  to  Avoid  Disruption  of  Cox@  Home  Internet  Service  (press  release),  Dec.  3,  2001. 
 96  High  Speed  Access  Corp.  (  HSA)  was  formed  in  April  1998  through  the  merger  of  two  cable  Internet  service 
 providers:  HSAnet  of  Littleton,  Colorado  and  CATV.  net  of  Louisville,  Kentucky.  In  later  years,  owners  included  Vulcan  Ventures  Inc.  (48.8%),  Microsoft,  Cisco,  and  Lucent.  See  Kinetic  Strategies,  Inc.,  Cable  Internet  Service 


 Providers  and  Systems  Integrators,  CABLE  DATACOM  NEWS,  at  http://  www.  cabledatacomnews.  com/  cmic/  cmic5.  Html  (visited  Jan.  11,  2002);  see  also  Annual  Assessment  of  the  Status  of  Competition  in  Markets  for  the  Delivery  of 
 Video  Programming,  CS  Docket  No.  98-  102,  Fifth  Annual  Report,  13  FCC  Rcd  24284,  24316    56  (1998).  97 
 High  Speed  Access  Corp.,  SEC  Filing  10-  Q  for  the  Quarter  Ended  June  30,  2001,  at  6;  High  Speed  Access  Corp.,  SEC  Filing  10-  K  for  the  Year  Ended  December  31,  2000,  at  3-  5;  see  also  ACA  Comments  at  6-  7.  Some  of  the 


 smaller  cable  operators  serviced  by  HSA  included  Limestone  Cable,  Western  Shore  Cable,  Genesis  Cable,  and  Capital  Cable.  Kinetic  Strategies,  Commercial  Cable  Modem  Launches  in  North  America,  CABLE  DATACOM  NEWS, 
 at  http://  www.  cabledatacomnews.  com/  cmic/  cmic75.  html  (visited  Jan.  11,  2002).  98 
 Charter  Communications  Corp.,  Charter  Communications  and  HSA  Close  on  Purchase  Agreement  (press  release),  Feb.  28,  2002;  Charter  Communications  Corp.,  Charter  Communications  Extends  Offer  to  HSA  for  Contracts  and 


 Associated  Assets  Serving  Charter  Customers  (press  release),  July  31,  2001.  HSA  Corp  has  commenced  negotiations  to  exit  all  of  its  turn  key  contracts  with  cable  operators  other  than  Charter.  High  Speed  Access  Corp., 
 SEC  Filing  10-  Q  for  the  Quarter  Ended  June  30,  2001,  at  6. 
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 22.  Excite@  Home  and  Road  Runner  employed  similar  business  and  technical  models.  Both  ISPs  obtained  exclusive  contracts  with  the  cable  operators  they  served.  99  Both  ISPs  operated  regional 
 networks  and  provided  operators  with  connections  from  the  cable  headend  to  the  Internet,  as  well  as  content,  e-  mail,  and  web-  hosting,  and  varying  levels  of  network  management,  provisioning,  and  customer 
 service.  100  Excite@  Home  also  operated  its  own  Internet  backbone  facilities.  101  In  exchange  for  these  services,  cable  operators  typically  paid  Excite@  Home  or  Road  Runner  a  share  of  subscriber  revenues.  102 
 Cable  operators  then  combined  these  services  of  Excite@  Home  or  Road  Runner  with  certain  other  functions  that  they  typically  self-  provided,  including,  in  some  cases,  owning  and  operating  the  CMTS, 
 cable  modem  rental,  customer  service  administration,  and  cable  modem  installation.  103  The  integrated  service  provided  by  these  operators  was  co-  branded.  For  example,  Cox  provided  service  under  the  brand 
 Cox@  Home,  while  Comcast  provided  service  under  the  brand  Comcast@  Home,  and  Cablevision  has  provided  service  to  a  limited  number  of  customers  under  the  brand  Optimum@  Home.  104  AT&  T  has 
 provided  service  under  the  brands  AT&  T@  Home  and  AT&  T  Road  Runner.  105 
 23.  Although  many  cable  operators  have  traditionally  entered  into  cooperative  agreements  with  Excite@  Home  or  Road  Runner  to  provide  cable  modem  service,  some  operators  have  chosen  from 


 the  start  to  self-  provide  all  of  the  functions  included  in  their  cable  modem  service  offering  on  some,  if  not  all,  of  their  systems.  For  example,  Cablevision  has  long  provided  cable  modem  service  primarily  through 
 its  self-  branded,  self-  operated,  Optimum  Online  service.  106  Cox  and  Adelphia  have  also  provided  self-branded,  self-  operated  cable  modem  service  in  some  of  their  systems,  branded  as  Cox  Express  and 
 Adelphia  Powerlink,  respectively.  107 


 99  At  Home  Corp.,  SEC  Filing  10-  K  for  the  Year  Ended  Dec.  31,  2000,  at  8;  Time  Warner  Entertainment  Co.,  LP, 
 SEC  Filing  10-  K  for  the  Year  Ended  Dec.  31,  2000,  at  I-  3  and  I-  4;  see  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  1,  Kinetic  Strategies,  Inc.,  Cable  Internet  Service  Providers  and  Systems  Integrators,  CABLE  DATACOM  NEWS,  at 


 http://  www.  cabledatacomnews.  com/  cmic/  cmic5.  html  (visited  Jan.  11,  2002).  100 
 At  Home  Corp.,  SEC  Filing  10-  K  for  the  Year  Ended  Dec.  31,  2000,  at  8;  Kinetic  Strategies,  Inc.,  Cable  Internet  Service  Providers  and  Systems  Integrators,  CABLE  DATACOM  NEWS,  at  http://  www.  cabledatacomnews.  com/  cmic/ 


 cmic5.  html  (visited  Jan.  11,  2002);  Road  Runner,  Company  Information:  What  We  Offer  (fact  sheet),  May  1999.  101 
 At  Home  Corp.,  SEC  Filing  10-  K  for  the  Year  Ended  Dec.  31,  2000,  at  8;  Kinetic  Strategies,  Inc.,  Cable  Internet  Service  Providers  and  Systems  Integrators,  CABLE  DATACOM  NEWS,  at  http://  www.  cabledatacomnews.  com/  cmic/ 


 cmic5.  html  (visited  Jan.  11,  2002).  102 
 See  At  Home  Corp.,  SEC  Filing  10-  K  for  the  Year  Ended  Dec.  31,  2000,  at  3-  5;  Kinetic  Strategies,  Inc.,  Cable  Internet  Service  Providers  and  Systems  Integrators,  CABLE  DATACOM  NEWS,  at  http://  www.  cabledatacomnews.  com 


 /cmic/  cmic5.  html  (visited  Jan  11,  2002).  103 
 Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  5-  6;  Road  Runner,  Company  Information:  What  We  Offer  (fact  sheet),  May  1999. 


 104  Cox  Comments  at  3;  Comcast  Reply  in  the  2001  MVPD  Competition  Report,  at  9;  Cablevision  Systems  Corp., 
 SEC  Filing  10-  Q  for  the  Quarter  Ended  March  31,  2001,  at  3;  Morgan  Stanley  July  2001  Report,  at  31.  105 
 See  AT&  T  Comments  at  49;  Morgan  Stanley  July  2001  Report,  at  31.  106 
 See  Cablevision  Systems  Corp.,  Optimum  Online,  at  http://  www.  optimumonline.  com  (visited  Jan.  11,  2002);  see  also  Morgan  Stanley  July  2001  Report,  at  31.  Prior  to  January  2002,  Cablevision  was  providing  cable  modem 


 service  to  a  limited  number  of  its  subscribers  through  Optimum@  Home.  Cablevision  Systems  Corp.,  SEC  Filing  10-  Q  for  the  Quarter  Ended  March  31,  2001,  at  3;  Morgan  Stanley  July  2001  Report,  at  31;  John  Borland,  @Home 
 Pulling  Plug  on  Cable  Partners,  CNET  NEWS.  COM,  Jan.  10,  2002,  at  http://  dailynews.  yahoo.  com/  htx/  cn/  ling_  plug  _on_  cable_  partners_  1.  html  (visited  Jan  31,  2002). 
 107  See  Cox  Comments  at  3;  Adelphia  Communications  Corp.,  SEC  Filing  10-  K  for  the  Year  Ended  December  31, 
 2000,  at  4-  5;  see  also  http://  www.  adelphia.  com/  internet/  (visited  Jan.  11,  2002);  see  also  Morgan  Stanley  July  2001  Report,  at  31.  Cox  is  in  the  process  of  migrating  its  Excite@  Home  subscribers  to  self-  operated  Cox  High  Speed 


 (continued....) 
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 24.  Finally,  several  operators  have  provided  cable  modem  service  in  conjunction  with  ISPs  not  financially  affiliated  with  any  cable  operator.  Some  of  the  smaller  cable  operators,  for  example,  have 
 historically  contracted  with  independent  ISPs,  such  as  The  ISP  Channel,  to  obtain  turn  key  service,  108  which  entailed  not  only  Internet  connectivity  and  services  such  as  e-  mail  and  web-  hosting,  but  also 
 equipment,  network  management,  and  in  some  cases  billing  and  customer  service  functions  that  larger  operators  normally  have  self-  provided.  109  The  ISP  Channel  and  High  Speed  Access  Corp.,  however,  no 
 longer  provide  turn  key  services,  and  the  number  of  turn  key  providers  is  dwindling.  110  Cable  operators  using  independent  ISPs  to  provide  cable  modem  service  have  chosen  in  many  cases  to  re-  brand  the 
 service  as  their  own  or  to  co-  brand  the  service.  Charter  Communications,  for  example,  has  contracted  with  EarthLink  in  several  markets  to  provide  cable  modem  service,  and  then  rebranded  the  service  as 
 Charter  Pipeline.  111 
 25.  It  bears  repeating  that  cable  modem  service  subscribers,  by  click-  through  access,  may  obtain  many  functions  from  companies  with  whom  the  cable  operator  has  not  even  a  contractual 


 relationship.  112  For  example,  a  subscriber  to  Comcasts  cable  modem  service  may  bypass  that  companys  web  browser,  proprietary  content,  and  e-  mail.  The  subscriber  is  free  to  download  and  use  instead,  for 
 example,  a  web  browser  from  Netscape,  113  content  from  Fox  News,  114  and  e-  mail  in  the  form  of  Microsoft's  Hotmail.  115  Whether  the  subscriber  chooses  to  utilize  functions  offered  by  his  cable  modem 
 service  provider  or  obtain  them  from  another  source,  these  functions  currently  are  all  included  in  the  standard  cable  modem  service  offering. 


 26.  Many  of  the  business  models  described  above  are  currently  under  transition,  due  to  several  noteworthy  events.  First,  AOL  Time  Warner,  Comcast,  and  AT&  T  have  all  embarked  on  a 
 multiple-  ISP  approach  to  offering  cable-  modem  service.  Time  Warner  began  offering  a  choice  of 


 (...  continued  from  previous  page)  Internet  service.  Cox  Communications,  Inc.,  Cox  Communications  Announces  Agreement  to  Avoid  Disruption  of 
 Cox@  Home  Internet  Service  (press  release),  Dec.  3,  2001.  108 
 See  Morgan  Stanley  July  2001  Report,  at  31;  Letter  from  Emily  A.  Denney,  Cinnamon  Mueller,  to  Magalie  Roman  Salas,  Secretary,  FCC,  (Nov.  21,  2001)  (  ACA  Nov.  21,  2001  Ex  Parte)  at  1-  2;  see  also  ACA  Comments  at 


 6-  7;  Letter  from  Matthew  M.  Polka,  American  Cable  Association,  to  Anne  Levine,  Cable  Services  Bureau,  (Feb.  4,  2002)  (  ACA  Feb.  4,  2002  Ex  Parte)  at  1-  3. 
 109  See  ACA  Comments  at  6-  7;  see  also  Kinetic  Strategies,  Inc.,  Cable  Internet  Service  Providers  and  Systems 
 Integrators,  CABLE  DATACOM  NEWS,  at  http://  www.  cabledatacomnews.  com/  cmic/  cmic5.  html  (visited  Jan.  11,  2002). 


 110  The  ISP  Channel  ceased  operations  at  the  end  of  2000.  Jim  Wagner,  ISP  Channel  Closes  Doors  at  Month  End, 
 INTERNETNEWS.  COM,  Dec.  11,  2000,  at  http://  www.  internetnews.  com/  isp-  news/  article/  0,,  8_  531531,  00.  html  (visited  Jan.  11,  2002).  HSA  Corp  has  commenced  negotiations  to  exit  all  of  its  turnkey  contracts  with  cable  operators  other 


 than  Charter.  High  Speed  Access  Corp.,  SEC  Filing  10-  Q  for  the  Quarter  Ended  June  30,  2001,  at  6.  111 
 See  Charter  Dec.  12,  2001  Ex  Parte  at  1;  Charter  Communications,  Inc.,  EarthLink  and  Charter  Launch  High-Speed  Cable  Internet  Access  Joint  Service  (press  release),  Aug.  17,  1998. 


 112  See,  e.  g.,  Charter  Dec.  12,  2001  Ex  Parte  at  1  (Charters  cable  modem  service  allows  the  subscriber  to  connect 
 with  any  portals,  web  sites  or  any  ISP  that  authorizes  web  based  access.  .  .  .  Customers  may  select  any  home  page,  start  page  or  ISP  experience  including  MSN,  AOL,  and  EarthLink  without  restriction  unless  imposed  by  ISPs  that  do 


 not  support  web  based  access.);  Cox  Aug.  15,  2001  Ex  Parte  at  5  (  Coxs  cable  modem  service  provides  subscribers  with  a  variety  of  enhanced  functions  including  .  .  .  access  to  other  ISPs  through  the  web  .  .  .). 
 113  See  Netscape,  Do  More  Online  With  Netscape  6.  2,  at  http://  www.  netscape.  com/  computing/  download/  index.  html? 
 cp+  hophb2  (visited  Jan.  22,  2002).  114 
 See  Fox  News  Channel,  at  http://  www.  foxnews.  com  (visited  Jan.  18,  2002).  115 
 See  MSN  Hotmail,  at  http://  lc2.  law13.  hotmail.  passport.  com/  cgi-  bin/  login  (visited  Jan.  18,  2002). 
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 provider  after  Road  Runners  exclusivity  with  Time  Warner  was  terminated  on  December  31,  2000  in  conjunction  with  its  merger  with  AOL,  and  in  accordance  with  conditions  imposed  on  the  merger  by  the 
 FTC.  116  As  of  January  2002  AOL  Time  Warner  was  offering  cable  modem  service  using  both  affiliated  and  unaffiliated  ISPs  on  all  systems  in  its  20  largest  divisions  with  a  choice  of  three  national  ISP 
 services.  117  In  March,  AOL  Time  Warner  added  four  more  markets.  118  On  February  26,  2002,  Comcast  announced  that  it  had  negotiated  an  agreement  to  offer  United  Onlines  NetZero  and  Juno  high-  speed 
 Internet  services  to  Comcast  customers  in  two  major  metropolitan  areas,  within  90  days  of  the  agreement.  119  On  March  12,  2002,  AT&  T  announced  an  agreement  to  offer  EarthLink  high-  speed  cable 


 116  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  1;  Time  Warner  Inc.,  Time  Warner  to  Increase  Road  Runner 
 Ownership  and  Manage  its  Operations  (press  release),  Dec.  18,  2000;  FTC  AOL  Time  Warner  Merger  Order,  supra  note  8;  Federal  Trade  Commission  Office  of  Public  Affairs,  FTC  Approves  AOL/  Time  Warner  Merger  with 


 Conditions  (press  release),  Dec.  14,  2000  (describing  FTC  action);  Joint  America  Online  /  Time  Warner  Statement  on  Federal  Trade  Commissions  Favorable  Vote  on  Their  Merger  (press  release),  Dec.  14,  2000.  Time  Warner 
 terminated  its  exclusive  agreement  with  Road  Runner  so  that  Time  Warner  could  offer  multiple  ISPs  on  its  cable  systems,  including  AOL,  earlier  than  if  it  had  waited  for  the  exclusive  agreement  to  expire  by  its  original  terms. 
 Time  Warner  Inc.,  Time  Warner  to  Increase  Road  Runner  Ownership  and  Manage  its  Operations  (press  release),  Dec.  18,  2000. 
 117  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  1.  The  three  services  are:  America  Online,  Road  Runner,  and 
 EarthLink.  AOL  Time  Warner  has  also  entered  into  agreements  with  other  national  and  regional  ISPs,  which,  upon  approval  by  the  Federal  Trade  Commission,  will  allow  AOL  Time  Warner  to  offer  consumers  additional  ISP  choice 


 in  each  division.  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  2.  On  December  21,  2001,  the  FTC  approved  agreements  with  four  ISPs:  New  York  Connect.  Net,  Ltd.,  Internet  Junction  Corp.,  Inter.  net  US  Ltd.,  and  STIC.  NET, 
 and  on  February  26,  2002,  the  FTC  approved  agreements  with  five  more  ISPs:  West  Central  Ohio  LLC,  LocalNet  Corp.,  Gloabal  Systems,  Inc.,  Big  Net  Holdings,  Inc.,  and  Digital  Communications  Networks,  Inc.  Letter  from 
 Donald  S.  Clark,  Secretary,  Federal  Trade  Commission,  to  Robert  D.  Joffe,  Counsel,  Cravath,  Swaine  &  Moore,  (Dec.  21,  2001)  (Approving  Motions  for  Approval  of  Non-  Affiliated  ISP  and  Alternative  Cable  Broadband  ISP 
 Service  Agreement  in  Connection  with  Four  ISPs);  Letter  from  Donald  S.  Clark,  Secretary,  Federal  Trade  Commission,  to  Robert  D.  Joffe,  Counsel,  Cravth,  Swaine  &  Moore,  (Feb.  26,  2002)  (Approving  Motions  for 
 Approval  of  Non-  Affiliated  ISP  and  Alternative  Cable  Broadband  ISP  Service  Agreement  in  Connection  with  Five  ISPs). 
 118  See  AOL  Time  Warner,  Worldwide  AOL  Membership  Surpasses  34  Million  (press  release),  Mar.  12,  2002.  On 
 March  12,  2002,  AOL  Time  Warner  announced  the  rollout  of  its  AOL  High-  Speed  Broadband  service  in  four  additional  markets.  By  FTC  Order,  AOL  Time  Warner  must  make  available  to  subscribers  at  least  one  unaffiliated 


 ISP  on  Time  Warners  cable  systems  before  AOL  itself  begins  offering  service,  and  must  allow  two  other  unaffiliated  ISPs  onto  its  cable  systems  within  90  days  after  AOLs  commencement  of  service.  FTC  AOL  Time 
 Warner  Merger  Order;  Federal  Trade  Commission  Office  of  Public  Affairs,  FTC  Approves  AOL/  Time  Warner  Merger  with  Conditions  (press  release),  Dec.  14,  2000  (describing  FTC  action);  Joint  America  Online  /  Time  Warner 
 Statement  on  Federal  Trade  Commissions  Favorable  Vote  on  Their  Merger  (press  release),  Dec.  14,  2000.  119 
 Comcast  Corp.,  Comcast  and  United  Online  to  Offer  NetZero  and  Juno  High-  Speed  Internet  Service  (press  release),  Feb.  26,  2002.  The  first  two  markets  are  Nashville,  Tennessee  and  Indianapolis,  Indiana.  The  agreement 


 also  provides  a  template  for  a  subsequent  national  rollout  of  United  Onlines  Internet  service  to  anyone  who  can  get  Comcast  Cable.  Id.  Comcast  has  also  reached  a  conditional  agreement  with  Microsoft  to  provide  MSN  ISP  service 
 on  non-  discriminatory  terms  pending  conclusion  of  certain  provisions  of  Comcasts  proposed  merger  with  AT&  T.  Comcast  Corp.,  SEC  Filing  PREM14A,  Feb.  11,  2002,  at  V-  20  to  V-  21;  AT&  T  Comcast  Corp.,  SEC  Filing  S-  4,  Feb. 
 11,  2002,  (containing  Exchange  Agreement  dated  as  of  Dec.  7,  2001,  between  Microsoft  Corp.  and  Comcast  Corp).  Comcast  began  its  ISP  choice  effort  with  a  proposed  trial  of  multiple  ISP  service,  in  which  it  proposed  to  offer  Juno 
 Express  and  EarthLink  over  its  cable  systems  in  a  trial  in  the  Philadelphia  area.  That  trial  did  not  occur.  Comcast  Corp.,  Comcast  and  Juno  Announce  Multiple  ISP  Trial  (press  release),  Nov.  29,  2000;  EarthLink,  Comcast  and 
 EarthLink  Announce  Technical  Trial  of  High-  Speed  Cable-  Based  Internet  Service  (press  release),  Mar.  27,  2001;  see  Comcast  Comments  at  37-  38;  See  also  Comcast  Reply  Comments  at  16-  17. 
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 Internet  service  to  its  consumers  in  the  greater  Boston  and  Seattle  markets.  120 
 27.  Second,  as  noted  above,  in  September  2001,  Excite@  Home  filed  for  Chapter  11  bankruptcy  protection,  and  was  forced  to  liquidate  its  assets  to  pay  its  creditors.  121  As  a  result  many  of 


 the  nations  largest  cable  operators,  including  AT&  T,  Cox,  Comcast,  Insight  and  Charter  were  forced  either  to  self-  provide  all  of  the  functions  necessary  to  offer  cable  modem  service  in  the  regions  in  which 
 they  had  used  Excite@  Home,  or  to  adopt  alternative  business  and  technical  models.  122  As  a  result  of  the  termination  of  its  relationship  with  Excite@  Home,  for  example,  AT&  T  constructed  a  new  network  to 
 enable  it  to  self-  provide  cable  modem  service  to  subscribers.  123 
 28.  Finally,  other  MSOs,  have  been  conducting  or  have  announced  that  they  will  conduct  technical  trials  to  determine  how  cable  modem  service  can  be  offered  using  multiple  ISPs,  as  AOL  Time 


 Warner  is  now  doing,  and  AT&  T  and  Comcast  propose  they  will  do.  Cox  and  Charter  both  announced  technical  trials  of  multiple  ISP  service.  While  Cox  began  a  technical  trial  of  multiple  ISP-  service  with 
 AOL  and  EarthLink  in  the  third  quarter  of  2001,  Charter  has  since  decided  not  to  pursue  a  multiple  ISP 


 120  AT&  T  Broadband,  AT&  T  Broadband  and  EarthLink  Forge  ISP  Choice  Agreement  (press  release),  Mar.  12, 
 2002.  AT&  T  and  EarthLink  anticipate  launching  EarthLinks  service  in  additional  cities  in  2003.  Id.  AT&  T  was  the  first  MSO  to  conduct  a  multiple-  ISP  trial,  which  it  launched  in  Boulder,  Colorado  on  November  1,  2000.  The 


 first  phase  of  the  trial,  which  concluded  on  May  1,  2001,  was  designed  to  test  technical  and  operational  issues,  and  involved  300  subscribers  and  four  ISPs.  AT&  T  conducted  a  second  phase  from  June  15  to  August  15,  2001  to  test 
 billing,  customer  usage  and  customer  care  tools.  AT&  T  had  planned  to  roll  out  service  in  the  Boston,  Massachusetts  area  in  2001,  but  its  plans  were  interrupted  by  ongoing  negotiations  among  the  participating  ISPs,  and  the  demise  of 
 Excite@  Home.  AT&  T  later  announced  that  it  plans  to  deploy  multiple-  ISP  service  commercially  in  several  major  markets  by  mid-  2002.  Letter  from  Joan  Marsh,  Director,  Federal  Government  Affairs,  AT&  T,  to  Magalie  Roman 
 Salas,  Secretary,  FCC  (Feb.  28,  2001);  See  also  AT&  T  Comments  at  60-  64,  and  AT&  T  Reply  Comments  at  11-  15;  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  3  and  4. 
 121  At  Home  Corp.,  Excite@  Home  Reduces  Workforce  as  Operations  Wind  Down:  Operations  Expected  to  Cease 
 After  February  28,  2002  (press  release),  Dec.  14,  2001;  At  Home  Corp.,  Excite@  Home  Provides  Status  of  Negotiations  with  Cable  Companies  (press  release),  Dec.  1,  2001. 


 122  Due  to  Excite@  Homes  bankruptcy,  contracts  between  AT&  T  and  Excite@  Home  were  terminated  on  December 
 1,  2001.  AT&  T  now  self-  provides  all  of  the  equipment  and  functions  necessary  to  serve  its  cable  modem  subscribers.  Cox,  Comcast,  Insight,  and  Charter  all  reached  an  agreement  with  Excite@  Home  that  allowed  them  to 


 maintain  Internet  access  service  with  Excite@  Home  until  February  28,  2002  while  they  transitioned  the  subscribers  to  their  own  high-  speed  network.  At  the  time  of  @Homes  bankruptcy,  Cablevision  Systems  Corp.  was  still 
 providing  cable  modem  service  under  the  Optimum@  Home  brand,  though  it  had  already  substantially  shifted  to  the  self-  provisioning  model  of  cable  modem  service.  On  January  10,  2002,  @Home  cut  all  service  to  Cablevisions 
 remaining  @Home  subscribers.  AT&  T  Broadband,  AT&  T  Moves  More  Than  Half  of  its  Internet  Customers  to  New  High-  Speed  Network  (press  release),  Dec.  4,  2001;  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  5;  At  Home  Corp., 
 Excite@  Home  Provides  Status  of  Negotiations  with  Cable  Companies  (press  release),  Dec.  1,  2001;  Cox  Communications,  Inc.,  Cox  Communications  Announces  Agreement  to  Avoid  Disruption  of  Cox@  Home  Internet 
 Service  (press  release),  Dec.  3,  2001;  Comcast  Corp.,  Comcast  Unveils  High-  Speed  Internet  Network  Plans;  Gains  Final  Approval  For  Excite@  Home  Agreement  (press  release),  Dec.  11,  2001;  Karen  Brown,  Insight  Girds  for 
 Excite@  Home  Transition,  MULTICHANNEL  NEWS  ONLINE,  Jan.  29,  2002,  at  http://  www.  tvinsite.  com/  index.  asp?  layout=  story&  articleId=  CA194108&  pubdate=  01/  29/  2002&  stt=  001&  display=  sea 
 rchResults  (visited  Mar.  13,  2002);  Cablevision  Systems  Corp.,  SEC  Filing  10-  Q  for  the  Quarter  Ended  March  31,  2001,  at  3;  John  Borland,  @Home  Pulling  Plug  on  Cable  Partners,  CNET  NEWS.  COM,  Jan.  10,  2002,  at 
 http://  dailynews.  yahoo.  com/  htx/  cn/  ling_  plug_  on_  cable_  partners_  1.  html  (visited  Jan.  31,  2002);  E@  H  Fallout:  Charter,  CABLEFAX  DAILY,  Dec.  7,  2002,  at  1. 
 123  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  3  (  New  network  designed  to  optimize  open  access),  4  (listing 
 required  enhancements,  including  Service  Agent  modifications  and  network  upgrade  to  include  scaleable  policy  based  routing  solution).  AT&  T  has  stated  that  the  new  network  is  designed  to  enable  multiple  ISP  service  and  that 


 it  is  capable  of  doing  so  on  a  commercial  basis  once  certain  enhancements  are  added.  Id. 
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 trial.  124 
 29.  As  discussed  above,  the  multiple-  ISP  environment  requires  a  re-  thinking  of  many  technical,  operational,  and  financial  issues,  including  implementation  of  routing  techniques  to 


 accommodate  multiple  ISPs,  125  Quality  of  Service,  126  and  the  compensation,  billing,  and  customer  service  arrangements  between  the  cable  operator  and  the  ISPs.  127  While  much  more  could  be  said  regarding  these 
 issues,  it  is  clear  that  they  center  around  the  difficulties  of  trying  to  modify  a  service  designed  to  be  provisioned  by  a  single  cable  modem  service  provider  to  allow  the  provisioning  of  cable  modem  service 
 by  multiple  service  providers. 
 30.  Conclusion.  As  the  foregoing  description  makes  clear,  the  business  relationships  among  cable  operators  and  ISPs  and  their  offerings  to  consumers  are  still  evolving  through  negotiations  and 


 commercial  decisions.  Customers,  for  their  part,  are  still  learning  the  capabilities  of  cable  modem  service  and  deciding  which  applications  they  prefer.  As  we  address  the  issues  raised  in  this  proceeding,  we  are 
 mindful  that  the  broadband  market  in  general  and  cable  modem  services  in  particular  are  still  evolving  and  that  regulatory  decisions  will  affect  their  development.  We  anticipate  that  further  developments  in 
 this  market  will  inform  our  consideration  of  the  issues  presented  in  the  Notice  of  Proposed  Rulemaking  that  we  are  initiating  herein. 


 III.  DECLARATORY  RULING:  STATUTORY  CLASSIFICATION  OF  CABLE  MODEM  SERVICE 
 A.  Background 
 31.  In  the  Notice,  we  raised  questions  about  the  appropriate  legal  and  policy  framework  for  cable  modem  service.  128  Cable  modem  service,  for  purposes  of  this  proceeding,  is  a  service  that  uses 


 124  Cox  Communications,  Inc.,  Cox  Communications  and  EarthLink  Agree  to  High-  Speed  Cable-  Based  Internet 
 Service  Trial  (press  release),  Apr.  24,  2001;  Cox  Communications,  Inc.,  Cox,  AOL  and  EarthLink  Launch  High-Speed  Service  Trial  (press  release),  Nov.  6,  2001;  see  Charter  Dec.  12,  2001  Ex  Parte  at  1.  Coxs  six-  month  trial  is 


 taking  place  in  its  El  Dorado,  Arkansas,  system  with  50  subscribers.  Cox  Communications,  Inc.,  Cox,  AOL  and  EarthLink  Launch  High-  Speed  Service  Trial  (press  release),  Nov.  6,  2001. 
 125  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  11.  While  routing  techniques  are  not  new  technologies,  especially 
 with  regard  to  the  Internet,  they  are  new  to  cable  operators,  as  the  operators  have  not  used  the  routing  techniques  in  this  fashion  before. 


 126  The  IP-  based  data  transmission  of  cable  modem  service,  with  a  connectionless,  best  effort  delivery  model,  does 
 not  guarantee  the  delivery  of  packets  in  any  specific  order,  in  a  timely  manner,  or  at  all.  In  order  to  deploy  real  time  applications  over  IP  networks  with  an  acceptable  level  of  quality,  certain  bandwidth,  latency,  and  jitter  requirements, 


 known  as  Quality  of  Service  (  QoS),  must  be  guaranteed  and  met  in  a  fashion  that  allows  multimedia  traffic  to  coexist  with  traditional  data  traffic  on  the  same  network.  Applications  such  as  video  streaming,  IP  telephony,  and 
 video-  conferencing  are  extremely  bandwidth-  and  delay-  sensitive,  imposing  unique  QoS  demands  on  the  underlying  network  that  carry  them.  See  NEWTONS  TELECOM  DICTIONARY  562  (17  th  Ed.  2001).  QoS  guarantees  network 
 bandwidth  and  availability  for  applications.  Any  real  time  media  stream  that  crosses  a  DOCSIS  cable  modem-compatible  access  link  needs  to  be  given  prioritized  traffic  management  treatment  in  order  to  assure  the  best  user-perceived 
 quality  end-  to-  end.  DOCSIS  1.1  provides  several  potential  methods  for  classifying  traffic  and  several  access-  link  traffic  management  functions,  which  could  be  applied  to  the  traffic  of  unaffiliated  ISPs  to  provide  and 
 improve  QoS.  See  Glossary  -  DOCSIS  1.  1  at  http://  www.  cablelabs.  com/  news_  room/  glossary2.  html  (visited  Dec.  18,  2001). 
 127  See  AT&  T  Comments  at  54-  66;  NCTA  Comments  at  69-  76;  Excite@  Home  Aug.  17,  2001  Ex  Parte, 
 Attachment;  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  5,  6,  8,  9,  11-  16.  128 
 Notice,  15  FCC  Rcd  at  19293    15. 
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 cable  system  facilities  to  provide  residential  subscribers  with  high-  speed  Internet  access,  as  well  as  many  applications  or  functions  that  can  be  used  with  high-  speed  Internet  access.  129  Parties  advocate  several 
 different  legal  classifications  for  cable  modem  service,  including  "cable  service,"  130  "information  service,"  131  both  cable  service  and  information  service,  132  a  combination  of  telecommunications 
 service  133  and  information  service,  134  and  advanced  telecommunications  capability."  135  In  advocating  their  positions,  the  parties  rely  to  varying  degrees  on  statutory  definitions,  on  the  components  and 
 functions  that  make  up  cable  modem  service,  on  the  fundamental  policies  stated  in  the  Act,  and  on  past  Commission  decisions. 


 32.  The  Communications  Act  does  not  clearly  indicate  how  cable  modem  service  should  be  classified  or  regulated;  the  relevant  statutory  provisions  do  not  yield  easy  or  obvious  answers  to  the 
 questions  at  hand;  and  the  case  law  interpreting  those  provisions  is  extensive  and  complex.  The  technologies  and  business  models  used  to  provide  cable  modem  service  are  also  complex  and  are  still 
 evolving.  As  the  Supreme  Court  recently  observed  in  connection  with  the  Commissions  interpretation  of  the  Pole  Attachment  Act  and  its  application  to  cable  modem  service,  the  subject  matter  here  is  technical, 
 complex,  and  dynamic;  and,  as  a  general  rule,  agencies  have  authority  to  fill  gaps  where  statutes  are  silent.  136 


 33.  In  accordance  with  that  responsibility,  we  herein  address  the  classification  of  cable  modem  service  for  purposes  of  the  Act.  Our  analysis  begins,  as  always,  with  the  language  of  the  statute. 
 We  then  consider  the  factual  record  in  this  proceeding,  and  particularly  the  descriptions  by  cable  operators  and  others  of  how  cable  modem  service  is  provided  today  and  what  functions  it  makes  available 
 to  subscribers  and  to  ISPs.  We  conclude  that  cable  modem  service  as  currently  provided  is  an  interstate  information  service,  not  a  cable  service,  and  that  there  is  no  separate  telecommunications  service  offering 
 to  subscribers  or  ISPs. 


 129  We  do  not  consider  here  other  Internet-  based  services  that  cable  operators  may  offer,  such  as  service  on  virtual 
 private  networks  (  VPNs).  VPNs  provide  the  capability  to  send  and  receive  data  between  two  computers  as  though  they  are  connected  with  a  dedicated  private  line  (point-  to-  point  link),  even  though  they  are  using  the  shared 


 resources  of  the  Internet.  Regis  Bates  and  Donald  Gregory,  VOICE  AND  DATA  COMMUNICATIONS  HANDBOOK  at  440  (McGraw-  Hill  2001).  See  also  NEWTON'S  TELECOM  DICTIONARY  751-  52  (17  th  Ed.  2001). 
 130  See  Communications  Act    602(  6),  47  U.  S.  C.    522(  6),  and  Comcast  Comments  at  16-  18. 
 131  See  Communications  Act    3(  20),  47  U.  S.  C.    153(  20),  and  SBC/  BellSouth  Comments  at  12-  18. 
 132  See  Cox  Comments  at  28-  30. 
 133  See  Communications  Act    3(  46),  47  U.  S.  C.    153(  46). 
 134  Verizon  Reply  Comments  at  18-  19. 
 135  See  AT&  T  Comments  at  29-  30;  Competition  Policy  Institute  Comments  at  10.  See  also  ACA  Comments  at  15 
 (  advanced  service).  We  note  at  the  outset  that  no  party  to  this  proceeding  asserts,  and  no  court  has  held,  that  cable  modem  service  as  we  use  that  term  is  a  telecommunications  service  and  nothing  more.  Even  the  commenters  that 


 approach  this  position  acknowledge  that  the  service  contains  additional  elements  that  go  beyond  the  statutory  definition  of  telecommunications  service.  See  Competitive  Access  Coalition  Comments  at  10;  Matthew  P.  Lampe 
 Comments    3-  4  (citing  content);  New  Hampshire  ISP  Assn  Comments    18,  19,  23.  3,  24.  1  (noting  existence  of  session,  presentation,  and  application,  information  services  and  programming  services);  Verizon  Comments  at  10-  11 
 (noting  content).  EarthLink  defines  the  term  cable  modem  service  in  its  Comments  to  mean  the  underlying  facilities-  based  transmission  service  that  is  necessary  to  provide  the  information  service  commonly  referred  to  as 
 Internet  access.    EarthLink  Reply  Comments  at  9.  Here,  we  are  defining  the  term  cable  modem  service  to  mean  the  complete  retail  offering  that  is  provided  to  subscribers.  See  infra  para.  38.  EarthLink  concludes  that  cable 
 modem  service,  as  it  defines  that  term,  is  a  telecommunications  service.  EarthLink  Reply  Comments  at  10.  136 
 Gulf  Power,  122  S.  Ct.  at  783-  84,  citing  Chevron  U.  S.  A.  Inc.  v.  Natural  Resources  Defense  Council,  Inc.,  467  U.  S.  837  (1984). 
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 B.  "Information  Service"  or  "Telecommunications  Service"  Classification 
 34.  Because  the  classification  of  cable  modem  service  turns  on  statutory  interpretation,  we  begin  with  a  review  of  relevant  statutory  definitions.  The  1996  Act  defines  telecommunications  service 


 as  the  offering  of  telecommunications  for  a  fee  directly  to  the  public,  or  to  such  classes  of  users  as  to  be  effectively  available  directly  to  the  public,  regardless  of  the  facilities  used.  137  Telecommunications  is 
 defined  in  turn  as  the  transmission,  between  or  among  points  specified  by  the  user,  of  information  of  the  users  choosing,  without  change  in  the  form  or  content  of  the  information  as  sent  and  received.  138  The 
 Act  defines  information  service  as  the  offering  of  a  capability  for  generating,  acquiring,  storing,  transforming,  processing,  retrieving,  utilizing,  or  making  available  information  via  telecommunications, 
 and  includes  electronic  publishing,  but  does  not  include  any  use  of  any  such  capability  for  the  management,  control,  or  operation  of  a  telecommunications  system  or  the  management  of  a 
 telecommunications  service.  139 


 137  Communications  Act    3(  46),  47  U.  S.  C.    153(  46). 
 138  Communications  Act    3(  43),  47  U.  S.  C.    153(  43). 
 139  Communications  Act    3(  20),  47  U.  S.  C.    153(  20).  The  term  information  service  follows  from  a  distinction 
 the  Commission  drew  in  the  First,  Second,  and  Third  Computer  Inquiries  (  Computer  Inquiries).  See  generally  Regulatory  and  Policy  Problems  Presented  by  the  Interdependence  of  Computer  and  Communications  Services  and 


 Facilities,  Docket  No.  16979,  Final  Decision  and  Order,  28  F.  C.  C.  2d  267  (1971),  aff'd  in  part  sub  nom.  GTE  Service  Corp.  v.  FCC,  474  F.  2d  724  (2d  Cir.  1973),  decision  on  remand,  Order,  40  F.  C.  C.  2d  293  (1973); 
 Amendment  of  Section  64.  702  of  the  Commission's  Rules  and  Regulations  (Second  Computer  Inquiry)  (  Computer  II  Final  Decision),  CC  Docket  No.  20828,  Final  Decision,  77  FCC  2d  384  (1980),  on  reconsideration,  Memorandum 
 Opinion  and  Order,  84  F.  C.  C.  2d  50  (1980)  and  Memorandum  Opinion  and  Order  on  Further  Reconsideration,  88  F.  C.  C.  2d  512  (1981),  aff'd  sub  nom.  Computer  and  Commun.  Indus.  Ass'n  v  FCC,  693  F.  2d  198  (D.  C.  Cir.  1982), 
 cert.  denied,  461  U.  S.  938  (1983);  Amendment  of  Section  64.  702  of  the  Commission's  Rules  and  Regulations  (Third  Computer  Inquiry),  CC  Docket  No.  85-  229,  Report  and  Order,  Memorandum  Opinion  and  Order  on  Further 
 Reconsideration,  104  F.  C.  C.  2d  958  (1986),  on  reconsideration,  Memorandum  Opinion  and  Order  on  Reconsideration,  2  FCC  Rcd  3035  (1987),  Memorandum  Opinion  and  Order  on  Reconsideration,  3  FCC  Rcd  1135 
 (1988)  and  Memorandum  Opinion  and  Order  on  Further  Reconsideration  and  Second  Further  Reconsideration,  4  FCC  Rcd  5927  (1989),  vacated  in  part,  California  v.  FCC,  905  F.  2d  1217  (9th  Cir.  1990);  Report  and  Order,  2  FCC 
 Rcd  3072  (1987),  on  reconsideration,  Memorandum  Opinion  and  Order  on  Reconsideration,  3  FCC  Rcd  1150  (1988),  vacated  in  part,  California  v.  FCC,  905  F.  2d  1217  (9th  Cir.  1990);  Computer  III  Remand  Proceedings, 
 Report  and  Order,  5  FCC  Rcd  7719  (1990),  on  reconsideration,  Memorandum  Opinion  and  Order  on  Reconsideration,  7  FCC  Rcd  909  (1992),  petitions  for  review  denied,  California  v.  FCC,  4  F.  3d  1505  (9th  Cir. 
 1993);  Computer  III  Remand  Proceedings;  Bell  Operating  Company  Safeguards  and  Tier  I  Local  Exchange  Company  Safeguards,  CC  Docket  No.  90-  623,  Report  and  Order,  6  FCC  Rcd  7571  (1991),  vacated  in  part  and 
 remanded,  California  v.  FCC,  39  F.  3d  919  (9th  Cir.  1994),  cert.  denied,  514  U.  S.  1050  (1995);  Computer  III  Further  Remand  Proceedings:  Bell  Operating  Company  Provision  of  Enhanced  Services;  1998  Biennial  Review  - 
 Review  of  Computer  III  and  ONA  Safeguards  and  Requirements,  CC  Docket  Nos.  95-  20,  98-  10;  Further  Notice  of  Proposed  Rulemaking,  Report  and  Order,  13  FCC  Rcd  6040  (1998),  Report  and  Order,  14  FCC  Rcd  4289  (1999),  on 
 reconsideration,  Order,  14  FCC  Rcd  21628  (1999). 
 These  decisions  drew  a  distinction  between  bottleneck  common  carrier  facilities  and  services  for  the  transmission  or  movement  of  information  on  the  one  hand  and,  on  the  other,  the  use  of  computer  processing  applications  to  act  on 


 the  content,  code,  protocol,  or  other  aspects  of  the  subscribers  information.  The  latter  are  enhanced  or  information  services.  This  distinction  was  incorporated  into  the  Modification  of  Final  Judgment  (  MFJ),  which 
 governed  the  Bell  Operating  Companies  after  the  Bell  System  Break-  Up,  and  into  the  1996  Act.  Universal  Service  Report  13  FCC  Rcd  at  11536    75  (1998),  citing  United  States  v.  Western  Electric  Co.,  673  F.  Supp.  525  (D.  D.  C. 
 1987),  and  714  F.  Supp.  1  (D.  D.  C.  1988),  revd  in  part,  900  F.  2d  283  (D.  C.  Cir.  1990).  The  Commission  has  confirmed  that  the  two  terms    enhanced  services  and  information  services    should  be  interpreted  to  extend  to  the 
 same  functions.  Implementation  of  the  Non-  Accounting  Safeguards  of  Sections  271  and  272  of  the  Communications  Act  of  1934,  as  amended,  CC  Docket  No.  96-  149,  First  Report  and  Order  and  Further  Notice  of  Proposed 
 Rulemaking  (  Non-  Accounting  Safeguards  Order),  11  FCC  Rcd  21905,  21955-  56    102. 
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 35.  None  of  the  foregoing  statutory  definitions  rests  on  the  particular  types  of  facilities  used.  Rather,  each  rests  on  the  function  that  is  made  available.  140  Accordingly,  we  examine  below  the  functions 
 that  cable  modem  service  makes  available  to  its  end  users.  The  Commissions  prior  analysis  regarding  Internet  access  service  informs  our  analysis. 


 36.  In  the  Universal  Service  Report,  the  Commission  found  that  Internet  access  service  is  appropriately  classified  as  an  information  service,  because  the  provider  offers  a  single,  integrated  service, 
 Internet  access,  to  the  subscriber.  The  service  combines  computer  processing,  information  provision,  and  computer  interactivity  with  data  transport,  enabling  end  users  to  run  a  variety  of  applications.  141  In  the 
 Universal  Service  Report,  the  Commission  concluded  that  Internet  access  providers  do  not  offer  subscribers  separate  services    electronic  mail,  Web  browsing,  and  others    that  should  be  deemed  to 
 have  separate  legal  status.  142  Rather,  the  Commission  examined  specific  uses  of  Internet  access  in  order  to  understand  the  nature  of  the  functionality  that  an  Internet  access  provider  offers.  143 


 37.  The  Universal  Service  Report  provides  several  specific  examples  of  functions  that  Internet  access  service  providers  typically  include  in  their  service,  including  e-  mail,  newsgroups,  and  the 
 ability  to  create  a  web  page  that  is  accessible  by  other  Internet  users.  144  In  addition,  Internet  Access  service  generally  includes  using  the  DNS.  145  The  DNS  is  an  online  data  retrieval  and  directory  service. 
 The  DNS  is  a  distributed  system,  where  the  data  may  be  replicated  in  multiple,  geographically  dispersed  server  systems.  The  administration  of  the  DNS  is  hierarchical,  and  is  routinely  delegated  among  a  great 
 many  independent  organizations.  It  is  most  commonly  used  to  provide  an  IP  address  associated  with  the  domain  name  (such  as  www.  fcc.  gov)  of  a  computer;  however,  the  DNS  is  also  routinely  used  to  perform 
 reverse  address-  to-  name  lookups  146  and  to  identify  and  locate  e-  mail  servers.  147  In  addition,  the  DNS  is 
 140  Universal  Service  Report,  13  FCC  Rcd  at  11530    59  (noting  Congresss  direction  that  the  classification  of  a 
 provider  should  not  depend  on  the  type  of  facilities  used  .  .  .  [but]  rather  on  the  nature  of  the  service  being  offered  to  consumers.). 


 141  See  id.,  13  FCC  Rcd  at  11536    73  (1998).  The  Universal  Service  Report  advised  Congress  about  the 
 implementation  of  certain  provisions  of  the  1996  Act  concerning  the  universal  service  system.  It  focused  in  part  on  the  relationship  between  universal  service  and  the  explosive  growth  of  Internet-  based  information  services.  The 


 report  specifically  reserved  the  question  of  the  statutory  classification  of  cable  modem  service.  Id.  at  11535  n.  140.  142 
 See  id.,  13  FCC  Rcd  at  11537    75.  143 
 See  id.  144 
 See  id.,  13  FCC  Rcd  at  11537-  39    76-  78.  145 
 For  a  description  of  the  DNS,  see  supra  note  74. 
 146  This  is  accomplished  by  the  IETF  RFC  #1035,  Domain  Names    Implementation  and  Specification,    3.5  at  21 
 (  IN-  ADDR.  ARPA  domain)  (Nov.  1987).  The  Commission  has  previously  found  that  simple  reverse  directory  service  constitutes  an  enhanced  or  information  service.  US  West  Communications,  Inc.,  Petition  for  Computer  III 


 Waiver,  Order,  11  FCC  Rcd  1195,  1199    28  (Chief,  Common  Carrier  Bur.  1995)  (  The  NATA  Centrex  Order  concluded  that  the  provision  of  access  to  a  data  base  for  purposes  other  than  to  obtain  the  information  necessary  to 
 place  a  call  will  generally  be  found  to  be  an  enhanced  service.  The  presumption  regarding  such  services,  therefore,  is  that  they  are  enhanced  unless  they  are  shown  to  be  otherwise.). 
 147  Cox  has  described  some  of  the  functions  of  the  DNS  with  respect  to  how  it  is  used  in  Coxs  cable  modem  service 
 offering.  See  Bova  Statement  of  Facts,  supra  note  31,  at  5  (describing  Cox  cable  modem  service  as  follows:  When  subscribers  seek  to  send  an  e-  mail  message,  the  domain  name  system  (  DNS)  server  .  .  .  provides  the  fully-  qualified 


 host  name  and  Internet  Protocol  (  IP)  address  of  the  mail  server  serving  the  subscribers.),  6  (same:  The  CoxCom  cable  Internet  service  provides  IP  address  translation  to  subscribers  as  an  integral  part  of  the  provision  of  the 
 foregoing  services  [access  to  the  Internet,  content  created  or  aggregated  by  CoxCom,  storage  or  caching  of  popular  content  or  information,  Internet  newsgroups,  web  hosting  services,  and  electronic  mail].  .  .  .  CoxComs  cable 
 Internet  service  stores  on  its  dedicated  DNS  servers,  and  allows  subscribers  to  access  and  use,  domain  name  resolution  information,  other  Internet  host  information  and  programming  that  translates  these  commonly  used 
 (continued....) 
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 flexible  and  can  be  enhanced,  so  that  it  is  capable  of  supporting  new  functionality.  148  The  DNS  constitutes  a  general  purpose  information  processing  and  retrieval  capability  that  facilitates  the  use  of  the 
 Internet  in  many  ways. 
 38.  E-  mail,  newsgroups,  the  ability  for  the  user  to  create  a  web  page  that  is  accessible  by  other  Internet  users,  and  the  DNS  are  applications  that  are  commonly  associated  with  Internet  access 


 service.  149  Each  of  these  applications  encompasses  the  capability  for  generating,  acquiring,  storing,  transforming,  processing,  retrieving,  utilizing,  or  making  available  information  via 
 telecommunications.  150  Taken  together,  they  constitute  an  information  service,  as  defined  in  the  Act.  Consistent  with  the  analysis  in  the  Universal  Service  Report,  we  conclude  that  the  classification  of  cable 
 modem  service  turns  on  the  nature  of  the  functions  that  the  end  user  is  offered.  We  find  that  cable  modem  service  is  an  offering  of  Internet  access  service,  which  combines  the  transmission  of  data  with 
 computer  processing,  information  provision,  and  computer  interactivity,  enabling  end  users  to  run  a  variety  of  applications.  151  As  currently  provisioned,  cable  modem  service  supports  such  functions  as  e-mail, 
 newsgroups,  maintenance  of  the  users  World  Wide  Web  presence,  and  the  DNS.  152  Accordingly,  we  find  that  cable  modem  service,  an  Internet  access  service,  is  an  information  service.  This  is  so 
 regardless  of  whether  subscribers  use  all  of  the  functions  provided  as  part  of  the  service,  such  as  e-  mail  or  web-  hosting,  153  and  regardless  of  whether  every  cable  modem  service  provider  offers  each  function  that 


 (...  continued  from  previous  page)  domain  names  into  IP  addresses  to  enable  routing.  .  .  .  Without  this  service,  Internet  access  would  be  impractical 
 for  most  users.  (italics  added)).  148 
 Examples  of  the  extensibility  of  the  Domain  Name  System  include  the  IETF  RFC  #2915  The  Naming  Authority  Pointer  (NAPTR)  DNS  Resource  Record  (Sept.  2000);  and  IETF  RFC  #2916,  E.  164  number  and  DNS  (Sept.  2000). 


 149  See  47  U.  S.  C.    231(  e)(  4)  (defining  the  term  Internet  access  service  to  include  various  functions);  Universal 
 Service  Report,  13  FCC  Rcd  at  11537    76  (  Internet  access  providers  typically  provide  their  subscribers  with  the  ability  to  run  a  variety  of  applications,  including  World  Wide  Web  browsers,  FTP  clients,  Usenet  newsreaders, 


 electronic  mail  clients,  Telnet  applications,  and  others.  (footnotes  omitted)).  150 
 See  Communications  Act    3(  20),  47  U.  S.  C.    153(  20).  Information  services  do  not  implement  the  management,  control,  or  operation  of  a  telecommunications  system  or  the  management  of  a  telecommunications 


 service.  151 
 See  AT&  T  Comments  at  21-  23;  AT&  T  Reply  Comments  at  13-  14,  33-  39;  Cox  Aug.  15,  2001  Ex  Parte  at  4-  5  n.  15. 


 152  See  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  7  (describing  behavior  of  subscribers  to  AT&  T  Broadband  as 
 including  e-  mails,  web  surfing)  9  (  AT&  T  Broadband  .  .  .  Provides  DNS  .  .  ..);  Letter  from  Emily  A.  Denney,  Esq.,  of  Cinnamon  Mueller,  counsel  for  ACA,  to  Ms.  Magalie  Roman  Salas,  Secretary,  FCC  (Jan.  30,  2001)  (  BELD  Jan. 


 30,  2002  Ex  Parte)  at  1  (describing  the  cable  modem  service  of  the  Braintree,  Massachusetts,  Electric  Light  Board  as  follows:  BELD  provides  its  customers  information  services  including  email,  web  hosting,  and  the  BELD 
 homepage,  which  includes  local  news,  .  .  .);  Bova  Statement  of  Facts,  supra  note  31,  at  7  (  Enhanced  functions  such  as  .  .  .  DNS  functions  must  be  performed  by  CoxCom  to  enable  the  subscriber  to  transmit  or  receive  any 
 information  using  the  cable  modem  platform  to  or  from  anywhere.  .  .  .  The  current  cable  modem  architecture  requires  CoxCom  to  perform  these  functions  as  an  integral  part  of  its  network.  (underlining  in  original));  Charter 
 Dec.  12,  2001  Ex  Parte  at  1  (  We  have  provided  at  no  additional  charge  web  hosting,  e-  mail,  caching,  web  browser,  news  server,  IP  addressing,  DNS  address  translation,  .  .  .  security  and  other  functions  for  accessing  or  using  the 
 Internet.);  Cox  Aug.  15  2001  Ex  Parte  at  5  (  Coxs  cable  modem  service  provides  subscribers  with  a  variety  of  enhanced  functions  including  subscriber  browsing  and  retrieval  of  files  from  the  World  Wide  Web,  access  to  other 
 Internet  service  providers  through  the  Web,  use  of  electronic  mail,  and  access  to  and  interaction  with  online  newsgroups.  In  addition,  .  .  .  the  Cox  cable  modem  service  provides  the  subscriber  with  content  such  as  news,  .  .  .  . 
 Cox  also  provides  the  subscriber  with  the  ability  to  customize  his  or  her  welcome  page  .  .  .  and  the  ability  to  create  homepages  .  .  .  .). 
 153  In  this  regard  we  note  that  some  cable  modem  service  users  may  choose  not  to  use  the  e-  mail  or  webhosting,  for 
 example,  that  is  provided  with  their  cable  modem  service.  Nearly  every  cable  modem  service  subscriber,  however,  (continued....) 
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 could  be  included  in  the  service.  As  currently  provisioned,  cable  modem  service  is  a  single,  integrated  service  that  enables  the  subscriber  to  utilize  Internet  access  service  through  a  cable  providers  facilities 
 and  to  realize  the  benefits  of  a  comprehensive  service  offering. 
 39.  Cable  modem  service  is  not  itself  and  does  not  include  an  offering  of  telecommunications  service  to  subscribers.  We  disagree  with  commenters  that  urge  us  to  find  a  telecommunications  service 


 inherent  in  the  provision  of  cable  modem  service.  154  Consistent  with  the  statutory  definition  of  information  service,  cable  modem  service  provides  the  capabilities  described  above  via 
 telecommunications.  155  That  telecommunications  component  is  not,  however,  separable  from  the  data-processing  capabilities  of  the  service.  As  provided  to  the  end  user  the  telecommunications  is  part  and 
 parcel  of  cable  modem  service  and  is  integral  to  its  other  capabilities.  156 
 40.  As  stated  above,  the  Act  distinguishes  "telecommunications"  from  "telecommunications  service."  The  Commission  has  previously  recognized  that  "[  a]  ll  information  services  require  the  use  of 


 telecommunications  to  connect  customers  to  the  computers  or  other  processors  that  are  capable  of  generating,  storing,  or  manipulating  information."  157  Although  the  transmission  of  information  to  and 
 from  these  computers  may  constitute  "telecommunications,"  that  transmission  is  not  necessarily  a  separate  "telecommunications  service."  158  We  are  not  aware  of  any  cable  modem  service  provider  that 
 has  made  a  stand-  alone  offering  of  transmission  for  a  fee  directly  to  the  public,  or  to  such  classes  of  users  as  to  be  effectively  available  directly  to  the  public.  159  Further,  as  we  discuss  below,  there  is  no 
 Commission  requirement  that  such  an  offering  be  made. 
 41.  In  the  Universal  Service  Report,  the  Commission  concluded  that  the  Acts  information  service  and  telecommunications  service  definitions  establish  mutually  exclusive  categories  of  service: 


 (...  continued  from  previous  page)  accesses  the  DNS  that  is  provided  as  part  of  the  service.  See  Bova  Statement  of  Facts,  supra  note  31,  at  5-  7  (listing 
 all  the  popular  applications  that  use  DNS).  154 
 Several  commenters,  for  example,  appear  to  claim  that  there  is  within  cable  modem  service,  as  currently  offered  to  retail  subscribers,  a  distinct  telecommunications  service,  such  as  the  transmission  of  data  over  the  cable  system 


 between  the  subscriber  and  the  headend,  separate  from  the  web  surfing,  e-  mail,  and  other  functions  that  comprise  cable  modem  service.  See,  e.  g.,  ASCENT  Comments  at  13;  OpenNET  Comments  at  19;  WorldCom  Comments  at 
 10-  11;  WorldCom  Reply  Comments  at  12-  19.  As  noted  above,  supra  note  135,  EarthLink  defines  the  term  cable  modem  service  in  its  Comments  to  mean  the  underlying  facilities-  based  transmission  service  that  is  necessary  to 
 provide  the  information  service  commonly  referred  to  as  Internet  access  and  concludes  that  cable  modem  service,  as  EarthLink  defines  it,  is  a  telecommunications  service.  EarthLink  Reply  Comments  at  9-  10.  As  we  have  just 
 found,  no  such  separate  and  distinct  service  is  being  offered  now.  155 
 See  47  U.  S.  C.    153(  20).  156 
 See  Implementation  of  the  Non-  Accounting  Safeguards  of  Section  271  and  272  of  the  Communications  Act  of  1934,  as  amended,  CC  Docket  No.  96-  149,  Order  on  Remand  (  Non-  Accounting  Safeguards  Remand),  16  FCC 


 Rcd  9751,  9770    36  (2001).  157 
 See  id.,  16  FCC  Rcd  at  9751    16,  9758-  59    32  (stating  that  some  parties'  "argument  ignores  the  Act's  distinction  between  'telecommunications'  and  'telecommunications  service.  '  .  .  .  .  [I]  nformation  service  providers  as  such  are 


 not  providing  'telecommunications  service'  under  the  Act,  and  thus  are  not  subject  to  common  carrier  regulation."),  9769    34  (2001). 
 158  See  Non-  Accounting  Safeguards  Remand,  16  FCC  Rcd  at  9755    8  (stating  that  the  categories  of 
 "telecommunications  service"  and  "information  service"  are  "mutually  exclusive);  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96-  45,  Report  and  Order  (  Universal  Service  Order),  12  FCC  Rcd  8776,  9179- 


 80    788-  90  (1997)  (stating  that  information  services  are  not  inherently  telecommunications  services  simply  because  they  are  offered  via  telecommunications). 
 159  See  Communications  Act    3(  46),  47  U.  S.  C.    153(  46). 
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 when  an  entity  offers  transmission  incorporating  the  capability  for  generating,  acquiring,  storing,  transforming,  processing,  retrieving,  utilizing,  or  making  available  information,    .  .  .  it  offers  an 
 information  service  even  though  it  uses  telecommunications  to  do  so.  160  The  report  did  not  decide  the  statutory  classification  issue  in  those  cases  where  an  ISP  provides  an  information  service  over  its  own 
 transmission  facilities.  The  Universal  Service  Report  noted  that  [  o]  ne  could  argue  that  in  such  a  case  the  Internet  service  provider  is  furnishing  raw  transmission  capacity  to  itself.  161  In  the  case  of  cable  modem 
 service,  we  do  not  believe  that  the  fact  that  cable  modem  service  is  provided  over  the  cable  operators  own  facilities,  without  more,  necessarily  creates  a  telecommunications  service  separate  and  apart  from  the 
 cable  modem  service.  The  cable  operator  providing  cable  modem  service  over  its  own  facilities,  as  described  in  the  record,  is  not  offering  telecommunications  service  to  the  end  user,  but  rather  is  merely 
 using  telecommunications  to  provide  end  users  with  cable  modem  service.  162  Our  analysis,  like  the  relevant  statutory  definitions,  focuses  instead  on  the  single,  integrated  information  service  that  the 
 subscriber  to  cable  modem  service  receives  and  the  nature  of  the  relationships  among  cable  operators  and  the  entities  with  which  they  cooperate  to  provide  cable  modem  service,  which  is  discussed  further  below. 


 42.  Computer  II  Requirements.  EarthLink  argues  that  it  is  irrelevant  whether  cable  operators  in  fact  offer  transmission  service  on  a  stand-  alone  basis.  163  Instead,  EarthLink  contends  that  cable  modem 
 service  providers  must  create  a  stand-  alone  transmission  service  and  offer  it  to  ISPs  and  other  information  service  providers  on  a  tariffed  basis  pursuant  to  the  Commissions  Computer  II  requirements.  164 
 EarthLink  maintains  Computer  II  applies  to  cable  modem  service  because  cable  operators  offer  it  on  an  indiscriminate  and  standardized  basis  to  the  public  and  because  they  do  so  using  their  own  facilities.  165 
 According  to  EarthLink,  [  t]  he  reality  is  that  information  services  can  only  be  provided  to  the  public  over  a  common  carrier  telecommunications  facility.  166  In  support  of  its  arguments,  EarthLink  points  to  a  line 
 of  decisions  in  which  the  Commission  has  required  common  carriers  that  provide  information  services  to  offer  the  underlying  telecommunications  as  a  stand-  alone  service.  167 


 160  See  Universal  Service  Report,  13  FCC  Rcd  at  11520    39.  See  also  Non-  Accounting  Safeguards  Remand,  16 
 FCC  Rcd  at  9770    36.  161 
 See  Universal  Service  Report,  13  FCC  Rcd  at  11534    69.  162 
 See  id.,  13  FCC  Rcd  at  11521    41  (stating  that  [  w]  hen  an  entity  offers  subscribers  the  capability  for  generating,  acquiring,  storing,  transforming,  processing,  retrieving,  utilizing  or  making  available  information  via 


 telecommunications,    it  does  not  provide  telecommunications;  it  is  using  telecommunications.)  (italics  added).  163 
 See  Letter  from  John  W.  Butler,  Counsel  for  EarthLink,  Inc.,  to  Kenneth  W.  Ferree,  Chief,  Cable  Services  Bureau,  FCC  (Nov.  8,  2001),  transmitted  by  letter  from  John  W.  Butler,  Counsel  for  EarthLink,  Inc.,  to  Magalie 


 Roman  Salas,  Secretary,  FCC  (Nov.  8,  2001),  (  EarthLink  Nov.  8,  2001  Ex  Parte)  at  9-  10.  164 
 Id.  at  6.  See  also  supra  note  139.  165 
 EarthLink  Nov.  8,  2001  Ex  Parte  at  2  (stating  that  it  is  quite  clear  that  where  an  entity  uses  its  own  transmission  facilities  to  provide  an  information  service  to  the  public,  that  entity  is  required  as  a  condition  of  being  allowed  to 


 provide  information  services  to  make  its  transmission  facilities  available  to  other  information  service  providers).  See  EarthLink  Reply  Comments  at  36-  38  (concluding  that  cable  operators  offer  cable  modem  service 
 indiscriminately  to  the  public).  166 
 EarthLink  Nov.  8,  2001  Ex  Parte  at  3.  167 
 See,  e.  g.,  EarthLink  Comments  at  22-  23,  29-  30;  EarthLink  Reply  Comments  at  31.  See  also  WorldCom  Comments  at  14;  WorldCom  Reply  Comments  at  18.  The  cases  these  commenters  principally  rely  on  are  Non-Accounting 


 Safeguards,  16  FCC  Rcd  at  9771    38;  Independent  Data  Commun.  Mfgrs.  Assn,  Inc.  Petition  for  Declaratory  Ruling  That  AT&  T's  InterSpan  Frame  Relay  Service  Is  a  Basic  Service;  and  AT&  T  Petition  for 
 Declaratory  Ruling  That  All  IXCs  be  Subject  to  the  Commission's  Decision  on  the  IDCMA  Petition,  Memorandum  Opinion  and  Order  DA  95-  2190  (  Frame  Relay),  10  FCC  Rcd  13717,  13722    40  (Chief,  Common  Carrier  Bur. 
 1995);  and  the  Computer  Inquiries,  supra  note  139. 
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 43.  These  decisions  are  inapposite.  In  the  cases  relied  upon  by  EarthLink  and  others,  the  providers  of  the  information  services  in  question  were  traditional  wireline  common  carriers  providing 
 telecommunications  services  (e.  g.,  telephony)  separate  from  their  provision  of  information  services.  168  Computer  II  required  those  common  carriers  also  to  offer  on  a  stand-  alone  basis  the  transport  underlying 
 that  information  service.  The  Commission  has  never  before  applied  Computer  II  to  information  services  provided  over  cable  facilities.  Indeed,  for  more  than  twenty  years,  Computer  II  obligations  have  been 
 applied  exclusively  to  traditional  wireline  services  and  facilities.  169  We  decline  to  extend  Computer  II  here.  As  we  have  found  above,  cable  modem  service  providers  currently  offer  subscribers  an  integrated 
 combination  of  transmission  and  the  other  components  of  cable  modem  service.  170  EarthLink  invites  us,  in  essence,  to  find  a  telecommunications  service  inside  every  information  service,  extract  it,  and  make  it  a 
 stand-  alone  offering  to  be  regulated  under  Title  II  of  the  Act.  Such  radical  surgery  is  not  required. 
 44.  EarthLink  further  contends  that  the  fact  that  some  cable  operators  offer  local  exchange  service  as  competitive  LECs  in  some  markets  using  the  same  cable  facilities  that  are  at  issue  in  this 


 proceeding  establishes  that  these  cable  operators  are  common  carriers  and  therefore  must  abide  by  the  requirements  of  Computer  II  with  respect  to  their  offerings  of  cable  modem  service.  171  EarthLink  asserts 
 that  Computer  II  would  require  any  cable  operator  providing  telephone  service  to  unbundle  the  underlying  transmission  capacity  of  its  cable  modem  service  and  make  it  available  to  other  information  service 
 providers.  We  disagree.  As  the  Commission  recently  observed,  the  core  assumption  underlying  the  Computer  Inquiries  was  that  the  telephone  network  is  the  primary,  if  not  exclusive,  means  through  which 
 information  service  providers  can  gain  access  to  their  customers.  172  The  Computer  II  and  Computer  III  proceedings  thus  subjected  AT&  T  and  GTE,  and  later  the  Bell  Operating  Companies,  to  certain 
 safeguards  and  conditions,  and  imposed  an  unbundling  obligation  on  other  telephone  companies.  The  Commission  recently  noted  that  the  obligations  deriving  from  [the  Computer  II  and  Computer  III] 
 proceedings  currently  apply  to  the  provision  of  wireline  broadband  Internet  access  services  by  facilities-based  telephone  companies.  173  As  noted  above,  the  Commission  has  applied  these  obligations  only  to 
 traditional  wireline  services  and  facilities,  and  has  never  applied  them  to  information  services  provided  over  cable  facilities. 


 45.  Even  if  Computer  II  were  to  apply,  however,  we  waive  on  our  own  motion  the  requirements  of  Computer  II  in  situations  where  the  cable  operator  additionally  offers  local  exchange 
 service.  The  Commission,  on  its  own  motion  or  on  petition,  may  exercise  its  discretion  to  waive  such 
 168  See,  e.  g.,  Frame  Relay,  supra  note  167;  Computer  Inquiries,  supra  note  139.  But  see  EarthLink  Nov.  8,  2001  Ex 
 Parte  at  3  n.  2  (asserting  that  the  fact  that  AT&  T  might  also  have  offered  the  frame  relay  service  separately  from  the  enhanced  service  was  irrelevant  to  the  Commissions  separate  treatment  of  the  pure  transmission  component  of  the 


 bundled  service).  169 
 See,  e.  g.,  Frame  Relay,  supra  note  167.  By  wireline,  we  refer  to  services  provided  over  the  infrastructure  of  traditional  telephone  networks. 


 170  In  Computer  II,  the  Commission  found  that  enhanced  service  providers  were  not  common  carriers  under  the 
 Act  and  therefore  were  not  subject  to  regulation  under  Title  II  of  the  Act.  Computer  II,  77  F.  C.  C.  2d  at  430-  34    120-  29;  see  id.  at  431-  32    123  (  to  subject  enhanced  services  to  a  common  carrier  scheme  of  regulation  because  of 


 the  presence  of  an  indiscriminate  offering  to  the  public  would  negate  the  dynamics  of  computer  technology  in  this  area). 
 171  EarthLink  Nov.  8,  2001  Ex  Parte  at  7-  8  (stating  that  by  offering  local  exchange  service  over  its  cable  facilities, 
 Cox  has  chosen  freely  to  enter  into  the  common  carrier  telecommunications  business  .  .  .  .  Having  made  that  choice  to  be  a  common  carrier,  however,  both  by  offering  pure  transmission  and  by  offering  information  services 


 over  its  own  facilities,  neither  Cox  nor  any  other  cable  company  with  similar  offerings  can  now  avoid  the  undisputed  legal  obligations  that  attach  to  providers  of  such  services.). 
 172  Wireline  Broadband  NPRM,  supra  note  12,    36  (italics  added). 
 173  Id.  at    22. 
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 requirements  on  the  basis  of  good  cause  shown  and  where  the  particular  facts  would  make  strict  compliance  inconsistent  with  the  public  interest.  174  A  waiver,  therefore,  may  be  appropriate  if  special 
 circumstances  warrant  a  deviation  from  the  general  rule,  and  if  such  deviation  would  better  serve  the  public  interest  than  adherence  to  the  general  rule.  175 


 46.  If  we  were  to  require  cable  operators  to  unbundle  cable  modem  service  merely  because  they  also  provide  cable  telephony  service,  we  would  in  essence  create  an  open  access  regime  for  cable 
 Internet  service  applicable  only  to  some  operators.  We  believe  it  is  more  appropriate  to  examine  the  issue  of  open  access  on  a  national  basis  involving  all  those  Title  VI  cable  systems  that  choose  to  offer  cable 
 modem  service,  rather  than  to  divide  and  treat  separately  those  that  also  have  a  common  carrier  local  telephony  offering. 


 47.  Also,  we  believe  that  many,  if  not  most,  such  cable  operators  would  stop  offering  telephony  if  such  an  offering  triggered  a  multiple  ISP  access  obligation  for  the  cable  modem  service.  176 
 Because  many  cable  operators  would  likely  withdraw  from  the  telephony  market,  applying  Computer  II  in  such  circumstances  would  undermine  the  long-  delayed  hope  of  creating  facilities  based  competition  in  the 
 telephony  marketplace  and  thereby  seriously  undermine  the  goal  of  the  1996  Act  to  open  all  telecommunications  markets  to  competition.  177  It  would  also  disserve  the  goal  of  Section  706  that  we 
 encourage  the  deployment  on  a  reasonable  and  timely  basis  of  advanced  telecommunications  capability  to  all  Americans  .  .  .  by  utilizing  .  .  .  measures  that  promote  competition  in  the  local  telecommunications 
 market,  or  other  regulating  methods  that  remove  barriers  to  infrastructure  investment.  178  In  light  of  the  above,  we  believe  that  if  Computer  II  were  applicable,  strict  compliance  here  would  be  inconsistent  with 
 the  public  interest.  Because  we  believe  that  good  cause  is  shown  to  deviate  from  the  general  requirements  of  Computer  II,  we  decline  to  apply  Computer  II  in  the  manner  that  EarthLink  proposes.  179 


 174  See  47  C.  F.  R.    1.3;  WAIT  Radio  v.  FCC,  418  F.  2d  1153,  1159  (D.  C.  Cir.  1969),  cert.  denied,  409  U.  S.  1027 
 (1972).  175 
 Northeast  Cellular  Tel.  Co.  v.  FCC,  897  F.  2d  1164,  1166  (D.  C.  Cir.  1990).  176 
 Cable  operators  have  repeatedly  stated  that  if  local  governments  imposed  multiple  ISP  access  requirements,  they  would  delay  deployment  of  cable  modem  service  and  other  services,  apparently  including  local  exchange  service. 


 See,  e.  g.,  Jason  Krause,  AT&  T  Cable  Wins  Broadband  Case  in  Portland,  THESTANDARD.  COM,  June  22,  2000,  available  at  2000  WL  31589696;  Venessa  Hua,  Fight  Over  Open  Access;  Supervisor  Proposes  AT&  T  Share  Cable 
 System  by  End  of  01,  SAN  FRANCISCO  EXAMINER,  May  24,  2000,  available  at  2000  WL  6163923;  K.  C.  Neel  and  Eric  Glick,  GTE  Whacks  AT&  T/  Comcast  with  Lawsuit,  CABLE  WORLD,  Nov.  1,  1999,  available  at  1999  WL 
 28837464;  Greg  Edwards,  High-  Speed  Networks  Threaten  Richmond,  Va.,  Internet  Service  Providers,  KNIGHT-RIDDER  TRIBUNE  BUSINESS  NEWS:  RICHMOND  TIMES-  DISPATCH    VIRGINIA,  Oct.  29,  1999,  available  at  1999  WL 
 28703253  (stating  that  [  i]  f  they  must  provide  such  access,  cable  companies  warn,  they  will  be  forced  to  delay  the  deployment  of  Internet,  telephone  and  digital  television  services.)  (italics  added);  Leslie  Hillman,  Miami-  Area 
 Cable  Firms  Do  Not  Have  to  Open  Lines  to  Rival  Companies,  KNIGHT-  RIDDER  TRIBUNE  BUSINESS  NEWS:  SUN-SENTINEL  -  FORT  LAUDERDALE,  FLORIDA,  Oct.  20,  1999;  Joe  Estrella,  Access  Advocates  Say  See  You  in  St.  Louis, 
 MULTICHANNEL  NEWS,  Oct.  18,  1999,  available  at  1999  WL  10010373  (stating  that  [  s]  ome  industry  followers  worried  that  AT&  T  will  delay  a  proposed  $19  million  upgrade  in  St.  Louis,  [if  multiple  ISP  access  is  required] 
 thereby  delaying  the  introduction  of  cable-  modem  service  to  some  55,  000  customers.  They  took  Portland  off  the  top-  l0  list,  didn't  they?    one  source  said.). 
 177  See,  e.  g.,  H.  R.  Conf.  Rep.  104-  458,  1996  WL  46795  (Leg.  Hist.)  at  *201  (Jan.  31,  1996)  (stating  that  in  the 
 future,  the  conferees  anticipate  that  cable  companies  will  be  providing  local  telephone  service  and  the  BOCs  (  Bell  Operating  Companies)  will  be  providing  cable  service). 


 178  See  infra  note  274. 
 179  We  note  that  a  companion  notice  of  proposed  rulemaking,  Wireline  Broadband  NPRM,  supra  note  12,  will 
 address  the  broader  issue  of  the  application  of  Computer  II  requirements  to  facilities-  based  wireline  providers  of  broadband  Internet  access  services. 
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 48.  Cable  Operators  Relationships  With  ISPs    Self-  Provisioning  and  Input  Models.  We  have  concluded  above  that  cable  modem  service  does  not  include  a  stand-  alone  offering  of 
 telecommunications  service  to  subscribers.  Significantly,  cable  modem  service  as  currently  provided  also  does  not  include  an  offering  of  telecommunications  service  to  ISPs  or  other  information  service  providers. 
 As  discussed  above,  cable  modem  service  is  provided  based  on  a  wide  variety  of  arrangements,  some  of  which  involve  contractual  relationships  among  cable  operators  and  ISPs  or  other  information  service 
 providers.  180  Based  on  the  record  before  us,  none  of  these  arrangements  appears  to  involve  the  offering  of  telecommunications  to  ISPs  or  other  information  service  providers  on  a  common  carrier  basis. 


 49.  With  the  exception  of  AOL  Time  Warner,  most  cable  operators  currently  provide  only  one  brand  of  cable  modem  service  on  any  system.  181  Among  these  cable  operators,  two  models  prevail; 
 we  refer  to  them  here  as  the  self-  provisioning  model  and  the  input  model.  Some  cable  operators  self-provide  all  of  the  functions  that  comprise  the  cable  modem  service  offering.  182  AT&  T,  Comcast,  and 
 Cox,  for  example,  have  self-  provided  cable  modem  service  on  all  of  their  systems  since  the  demise  of  Excite@  Home.  183  Others,  such  as  Cablevision,  have  self-  provided  the  functions  of  cable  modem  service 
 since  the  service  was  first  offered  to  subscribers.  184  In  contrast,  other  cable  operators  contract  with  an  ISP,  which  may  or  may  not  be  affiliated  with  the  cable  operator,  to  provide  many  of  the  inputs  needed  to  create 
 the  cable  modem  service  offering.  185 
 50.  Many  of  the  large  cable  operators  initially  offered  cable  modem  service  using  inputs  provided  by  Excite@  Home  and  Road  Runner.  186  AOL  Time  Warner  has  used  and  still  uses  this  type  of 


 180  See  supra  paras.  20-  29. 
 181  AOL  Time  Warners  recent  deployment  of  a  multiple-  ISP  approach  to  offering  cable  modem  service  is  discussed 
 in  paragraphs  52-  54  below.  182 
 See  Bova  Statement  of  Facts,  supra  note  31,  at  8  (stating  that  [  i]  n  other  systems,  such  as  Cox  Express  systems,  CoxCom  has  no  arrangement  with  At  Home  and  obtains  elements  necessary  to  provide  Internet  services  from  other 


 parties  or  supplies  them  itself.).  See  also  supra  paras.  21-  23.  183 
 AT&  T,  Cox,  Comcast,  and  Charter  have  migrated  (or  are  in  the  process  of  migrating)  all  of  their  former  @Home  subscribers  off  of  Excite@  Homes  network  to  their  own  networks.  Cable  Notes,  WARREN'S  CABLE  REG.  MONITOR, 


 Mar.  11,  2002;  AT&  T  Dec.  18,  2001  Ex  Parte,  Attachment  at  5;  AT&  T  Broadband,  AT&  T  Broadband  Internet  Customers  Successfully  Moved  to  New  High-  SP  (press  release),  Dec.  7,  2001,  available  at 
 http://  www.  attbroadband.  com/  services/  other/  pressreleases/  2001_  12_  01.  html  (visited  Feb.  19,  2002);  Cox  Communications,  Inc.,  Cox  Communications  Announces  Agreement  to  Avoid  Disruption  of  Cox@  Home  Internet 
 Service  (press  release),  Dec.  3,  2001,  available  at  http://  www.  cox.  com/  PressRoom/  No%  20  .  .  .  Disruption.  asp?  LocalSys=&  LocalSys=  (visited  Dec.  18,  2001);  Comcast  Corp.,  Comcast  Unveils  High-  Speed 
 Internet  Network  Plans;  Gains  Final  Approval  For  Excite@  Home  Agreement  (press  release),  Dec.  11,  2001,  available  at  http://  www.  comcast.  com/  defaultframe.  asp?  section=  press_  room&  SubSection=  pr-  cable_  news  (visited 
 Feb.  19,  2002);  Charter  Dec.  12,  2001  Ex  Parte,  at  1.  184 
 See  supra  paras.  21-  23.  185 
 See  supra  paras.  21,  24.  See  also  ACA  Comments  at  6-  7  (  Many  ACA  members  provide  cable  modem  service  through  agreements  with  unaffiliated  ISPs.  ACA  members  and  companies  such  as  HSA  .  .  .  have  negotiated 


 agreements  for  unaffiliated  ISP  access  to  the  cable  modem  platform  in  smaller  markets.)  (underlining  omitted);  ACA  Feb.  4,  2002  Ex  Parte  at  2  (although  some  unaffiliated  ISPs  with  whom  ACA  members  had  agreements  have 
 folded,  a  substantial  number  of  ACA  members  continue  to  transact  with  unaffiliated  ISPs).  One  cable  operator  in  northern  New  England,  MetroCast,  offers  cable  modem  service  with  many  inputs  supplied  by  a  regional  ISP,  Great 
 Works  Internet.  See  Metrocast  Online,  available  at  http://  www.  metrocastonline.  com/  (visited  Feb.  1,  2002)  and  Great  Works  Internet,  available  at  http://  www.  gwi.  net/  (visited  Feb.  1,  2002). 
 186  See  supra  paras.  21-  23 
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 input  arrangement  to  provide  cable  modem  service  using  inputs  supplied  by  its  affiliate  Road  Runner.  187  Some  small  operators  also  typically  use  input  arrangements,  usually  in  conjunction  with  unaffiliated  ISPs 
 or  information  service  providers.  188  ISPs  and  other  information  service  providers  typically  supply  various  types  of  inputs  to  cable  operators  that  use  this  model.  Excite@  Home  and  HSA,  for  example,  provided  e-mail, 
 caching,  web-  hosting,  and  other  functions  included  in  cable  operators  cable  modem  service  offerings.  189  ISPs  also  have  provided  cable  operators  with  connectivity  between  the  cable  system  and  the 
 Internet  backbone.  190  Due  to  the  demise  of  Excite@  Home  and  HSA,  some  cable  operators  have  reduced  their  reliance  on  input  providers  for  this  and  other  functions.  Charter,  for  example,  has  recently  begun 
 self-  provisioning  connectivity  between  its  systems  and  the  Internet  backbone,  while  continuing  to  rely  on  various  input  providers  to  supply  functions  such  as  e-  mail,  web-  hosting,  and  a  welcome  page.  191 


 51.  None  of  the  foregoing  business  models  by  which  cable  operators  provide  cable  modem  service  appears  to  include  the  offering  of  any  transmission  service  by  a  cable  operator  to  an  ISP  or  other 
 information  service  provider.  192  This  is  necessarily  true  for  cable  operators  that  self-  provision  all  elements  of  cable  modem  service  and  therefore  have  no  arrangements  with  ISPs.  It  also  appears  true  for 
 cable  operators  that  provide  cable  modem  service  using  input  arrangements.  In  both  the  self-  provisioned  model  and  the  input  model,  the  cable  operator  is  offering  cable  modem  service  to  its  retail  subscribers. 
 Even  where  an  unaffiliated  ISP  provides  most  of  the  information  service  functions  described  above,  as  described  in  the  record,  the  entity  that  ultimately  provides  cable  modem  service  to  the  subscriber  is  the 
 cable  operator.  As  described  in  the  record,  the  cable  operator  is  providing  its  subscribers  with  a  single  service,  cable  modem  service,  not  with  separate  transmission,  e-  mail,  and  web  surfing  services.  193 


 52.  Cable  Operators  Relationships  With  ISPs    Potential  Private  Carriage  Offering.  AOL  Time  Warner  recently  has  begun  offering  multiple  brands  of  cable  modem  service  to  subscribers  on  all  of 
 its  major  systems  pursuant  to  the  FTC  AOL  Time  Warner  Merger  Order.  194  Currently  AOL  Time  Warner 
 187  Road  Runner,  Company  Info,  available  at  http://  www.  rr.  com/  rdrun/  (visited  Feb.  20,  2002).  See  also  supra  para. 
 21.  AOL  Time  Warner  has  recently  begun  providing  cable  modem  service  using  its  affiliated  ISP  AmericaOnline,  as  well  as  a  variety  of  unaffiliated  ISPs  including  EarthLink,  which  we  discuss  separately  below.  See  AOL  Time 


 Warner  Jan.  22,  2002  Ex  Parte.  188 
 See  ACA  Comments  at  6-  7;  ACA  Nov.  21,  2001  Ex  Parte;;  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  5-  6.  See  also  BELD  Broadband,  available  at  http://  www.  beld.  net  (small  cable  operators  cable  modem  service 


 first  page  includes  access  to  ten  search  engines,  including  Alta  Vista,  Excite,  Google,  HotBot,  Infoseek,  Lycos,  WebCrawler,  and  Yahoo!)  (visited  Jan.  29,  2002). 
 189  See  authorities  cited  supra  note  185;  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  5-  6. 
 190  ACA  Nov.  21,  2001  Ex  Parte  at  1;  AOL  Time  Warner  Jan  22,  2002  Ex  Parte  at  5;  Bova  Statement  of  Facts,  supra 
 note  31,  at  2-  3,  4-  6;  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  5-  6;  Road  Runner,  Residential  Service,  Technology,  available  at  http://  www.  rr.  com/  rdrun/  (visited  Feb.  20,  2002).  Excite@  Home  operated  regional 


 networks  that  supplied  connectivity  between  the  cable  headend  and  the  Internet.  At  Home  Corp.,  SEC  Filing  10-  K  for  the  Year-  Ended  Dec.  31,  2000,  at  8;  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  5-  6. 
 191  Charter  Dec.  12,  2002  Ex  Parte.  Charter  previously  contracted  with  Excite@  Home  and  HSA  for  connectivity 
 between  any  given  cable  system  and  the  Internet  backbone,  as  well  as  email,  web-  hosting,  and  similar  functions.  Id;  Excite@  Home  Aug.  17,  2001  Ex  Parte,  Attachment  at  5-  6.  As  noted  above,  Cox,  Comcast,  and  AT&  T  have 


 eliminated  their  reliance  on  input  providers  altogether  and  have  adopted  a  self-  provisioning  approach.  192 
 As  noted  in  paragraph  52  below,  AOL  Time  Warner  has  implemented  a  multiple  ISP  business  model  that  differs  somewhat  from  models  used  by  other  cable  operators.  Moreover,  as  described  in  paragraph  54  below,  if  a  cable 


 operators  input  function  were  a  pure  telecommunications  offering,  we  conclude  that,  given  the  cable  operator  does  not  hold  itself  out  indiscriminately  to  serve  all  ISPs,  such  offering  would  be  a  private  carrier  service. 
 193  See  supra  text  accompanying  notes  142-  143. 
 194  See  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  1-  2.  AOL  Time  Warner  notes  that  it  adopted  a  multiple  ISP 
 business  plan  before  any  obligations  were  imposed  on  it  by  the  FTC.  Id.  at  3.  Other  cable  operators  have  completed  (continued....) 
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 offers  cable  modem  service  in  conjunction  with  its  affiliated  ISPs,  AOL  and  Road  Runner,  and  with  unaffiliated  ISP  EarthLink  on  all  systems  in  each  of  its  20  largest  divisions.  195  Arrangements  with  other 
 unaffiliated  ISPs  are  in  various  stages  of  development.  196  AOL  Time  Warner  describes  its  arrangements  with  EarthLink  and  the  unaffiliated  ISPs  as  a  kind  of  partnership  in  which  the  [unaffiliated]  ISP  and  the 
 cable  operator  together  offer  an  integrated  Internet  service  to  consumers  and  both  retain  a  direct  interest  in  providing  the  service  to  the  consumer.  197  AOL  Time  Warner  explains  that  both  TWC  and  the  ISP  retain 
 a  direct  interest  in  each  customers  account  and  share  in  the  economics  of  each  customer  pursuant  to  the  individually  negotiated  affiliation  agreements.  198  According  to  AOL  Time  Warner,  both  TWC  and  the 
 ISP  take  full  responsibility  for  the  service  customers  receive.  Thus,  customers  can  call  either  TWC  or  the  ISP  to  have  their  problems  addressed.  199  Both  AOL  Time  Warner  and  the  ISP  have  the  right  to  sell  the 
 ISPs  brand  of  cable  modem  service  and  to  set  their  own  prices  for  the  service.  200  Regardless  of  which  entity  markets  and  bills  for  the  service,  it  appears  that  AOL  Time  Warner  and  the  ISP  are  cooperating  to 
 provide  a  retail  offering,  and  both  maintain  a  direct  customer  relationship  with  subscribers. 
 53.  AOL  Time  Warners  arrangement  with  EarthLink,  like  those  with  other  unaffiliated  ISPs,  represents  a  cooperative  arrangement  between  AOL  Time  Warner  and  the  ISP,  in  which  the  two  entities 


 together  are  providing  a  service  at  retail  to  subscribers.  201  Although  this  arrangement  differs  in  some  respects  from  the  input  model  described  above,  in  that  the  ISP  has  the  opportunity  to  establish  a  direct 
 relationship  with  the  subscriber,  it  is  the  same  in  that  subscribers  receive  a  single  service,  cable  modem  service,  and  that  neither  AOL  Time  Warner  nor  any  ISP  is  offering  subscribers  a  separate 
 telecommunications  service.  202 
 54.  It  is  possible,  however,  that  when  EarthLink  or  other  unaffiliated  ISPs  offer  service  to  cable  modem  subscribers,  they  receive  from  AOL  Time  Warner  an  input  that  is  a  stand-  alone 


 transmission  service,  making  the  ISP  an  end-  user  of  telecommunications,  as  that  term  is  defined  in  the 


 (...  continued  from  previous  page)  or  are  conducting  trials  of  multiple  ISP  offerings  and  appear  to  be  effecting  commercial  deployment  of  multiple  ISP 
 cable  modem  service  offerings.  See  supra  paras.  26,  28.  Comcast  appears  to  be  in  the  initial  stages  of  implementing  its  own  access  arrangements  with  unaffiliated  ISPs.  Comcast,  Comcast  and  United  Online  to  Offer  NetZero  and 
 Juno  High-  Speed  Internet  Service  (press  release),  Feb.  26,  2002,  available  at  http://  www.  comcast.  com/  press_  room/  viewrelease.  asp?  pressid=  130  (visited  Feb.  27,  2002);  Exchange  Agreement 
 dated  as  of  Dec.  7,  2001,  between  Microsoft  Corp.  and  Comcast  Corp.,  available  at  http://  www/  sec.  gov/  Archives/  edgar/.  .  .  0095012302001136/  e56461s4ex2-  6.  txyt  (visited  Feb.  27,  2001). 
 195  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  1-  3. 
 196  Time  Warner  Cable  has  entered  into  agreements  with  various  national  and  regional  ISPs.  See  AOL  Time  Warner 
 Jan.  22,  2002  Ex  Parte  at  2-  3;  FTC,  Application  for  Approval  of  Non-  Affiliated  ISP  and  Alternative  Cable  Broadband  ISP  Service  Agreement  (Dec.  21,  2001),  available  at  http://  www.  ftc.  gov/  os/  2002/  02/  index.  htm  (visited 


 Feb.  19,  2002).  The  FTC  has  approved  several  of  these  agreements.  FTC,  Application  for  Approval  of  a  Non-Affiliated  ISP  and  Alternative  Cable  Broadband  ISP  Service  Agreement  Feb.  26,  2002),  available  at 
 http://  www.  ftc.  gov/  opa/  2002/  02/  fyi0213.  htm  (visited  Mar.  1,  2002).  197 
 AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  3.  198 
 Id.  199 
 Id.  at  4.  200 
 Id.  201 
 See  NCTA  Comments  at  48,  50  (predicting  in  December  2000  that  cable  operators  would,  in  the  future,  enter  into  commercially  reasonable  agreements  with  unaffiliated  ISPs;  explaining  then-  current  coordinated  efforts  by 


 the  cable  operator  and  the  [affiliated]  Internet  service  [provider]).  202 
 See  id.  at  18. 
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 Act.  The  record  does  not  contain  sufficient  facts  by  which  to  make  that  determination.  203  To  the  extent  that  AOL  Time  Warner  is  providing  a  stand-  alone  telecommunications  offering  to  EarthLink  or  other 
 ISPs,  we  conclude  that  the  offering  would  be  a  private  carrier  service  and  not  a  common  carrier  service,  because  the  record  indicates  that  AOL  Time  Warner  determines  on  an  individual  basis  whether  to  deal 
 with  particular  ISPs  and  on  what  terms  to  do  so.  204 
 55.  The  Commission  and  courts  have  long  distinguished  between  common  carriage  205  and  private  carriage  by  examining  the  particular  service  at  issue.  206  As  the  D.  C.  Circuit  has  stated,  the 


 primary  sine  qua  non  of  common  carrier  status  is  a  quasi-  public  character,  which  arises  out  of  the  undertaking  to  carry  for  all  people  indifferently.  207  In  contrast,  an  entity  is  a  private  carrier  for  a 
 particular  service  when  a  carrier  chooses  its  clients  on  an  individual  basis  and  determines  in  each  particular  case  whether  and  on  what  terms  to  serve  and  there  is  no  specific  regulatory  compulsion  to 
 serve  all  indifferently.  208  The  record  indicates  that  AOL  Time  Warner  is  determining  on  an  individual  basis  whether  to  deal  with  particular  ISPs  and  is  in  each  case  deciding  the  terms  on  which  it  will  deal  with 
 any  particular  ISP.  209  To  the  extent  that  AOL  Time  Warner  is  making  an  offering  of  pure  telecommunications  to  ISPs,  it  is  dealing  with  each  ISP  on  an  individualized  basis  and  is  not  offering  any 
 transmission  service  indiscriminately  to  all  ISPs.  210  Thus,  such  an  offering  would  be  a  private  carrier 
 203  No  commenter  claims  that  AOL  Time  Warner  is  providing  any  telecommunications  or  information  service 
 offering  to  an  ISP.  204 
 See  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  passim;  authorities  cited  infra  note  210.  205 
 The  Commission  has  repeatedly  found  in  various  contexts  that  the  definition  of  telecommunications  service  under  the  Act  is  equivalent  to  common  carrier  service.  See,  e.  g.,  Cable  &  Wireless,  PLC,  File  No.  SCL-  96-  005, 


 Cable  Landing  License,  12  FCC  Rcd  8516,  8521  13  (1997);  AT&  T  Submarine  Systems,  Inc.,  File  No.  S-  C-  L-  94-006,  Memorandum  Opinion  and  Order,  13  FCC  Rcd  21585,  21587-  88    6  (1998),  aff'd,  Virgin  Islands  Tel.  Co.  v. 
 FCC,  198  F.  3d  921  (D.  C.  Cir.  1999);  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96-  45,  Report  and  Order,  12  FCC  Rcd  8776,  9177-  78    785  (1997),  aff'd  in  part,  reversed  in  part,  and  remanded  in  part, 
 Texas  Office  of  Public  Utility  Counsel  v.  FCC,  183  F.  3d  393  (5th  Cir.  1999),  cert.  granted,  530  U.  S.  1213  (2000);  Declaratory  Ruling,  14  FCC  Rcd  3040,  3042    6  (1999),  remanded  on  other  grounds,  State  of  Iowa  v.  FCC,  218 
 F.  3d  756  (D.  C.  Cir.  2000).  Moreover,  the  D.  C.  Circuit  has  held  that  the  FCC's  interpretation  of  "telecommunications  service"  as  common  carrier  service  is  reasonable  and  permissible.  Virgin  Islands  Tel.  Co.  v.  FCC,  198  F.  3d  921,  926 
 (D.  C.  Cir.  1999).  206 
 See  National  Assn  of  Reg.  Utils.  Commrs  v.  FCC,  525  F.  2d  630,  640  (D.  C.  Cir.),  cert.  denied,  425  U.  S.  992  (1976)  (  NARUC  I);  NARUC  v.  FCC,  533  F.  2d  601,  608-  09  (D.  C.  Cir.  1976)  (  NARUC  II);  Southwestern  Bell 


 Tel.  Co.  v.  FCC,  19  F.  3d  1475,  1481  (D.  C.  Cir.  1994);  AT&  T  Submarine  Systems,  Inc.  Application  for  a  License  to  Land  and  Operate  a  Digital  Submarine  Cable  System  Between  St.  Thomas  and  St.  Croix  in  the  U.  S.  Virgin  Islands, 
 File  No.  S-  C-  L-  94-  006,  Memorandum  Opinion  and  Order,  13  FCC  Rcd  21585,  21588-  89    8-  9  (1998),  affd,  Virgin  Islands  Tel.  Corp.  v.  FCC,  198  F.  3d  921  (D.  C.  Cir.  1999);  NORLIGHT  Request  for  Declaratory  Ruling,  File  No. 
 PRB-  LMMD  86-  07,  Declaratory  Ruling,  2  FCC  Rcd  132,  133    14  (1987).  See  also  Cox  Comments  at  45-  46;  NCTA  Comments  at  13-  17. 
 207  NARUC  II,  533  F.  2d  at  608-  09  (quotation  marks  omitted).  See  also  authorities  cited  supra  note  206. 
 208  Southwestern  Bell  Tel.  Co.  v.  FCC,  19  F.  3d  1475,  1481  (D.  C.  Cir.  1994);  see  NARUC  I,  525  F.  2d  at  641  (  a 
 carrier  will  not  be  a  common  carrier  where  its  practice  is  to  make  individualized  decisions,  in  particular  cases,  whether  and  on  what  terms  to  deal). 


 209  See  supra  paras.  52-  54. 
 210  See  AOL  Time  Warner  Jan.  22,  2002  Ex  Parte  at  3  (referring  to  its  individually  negotiated  affiliation 
 agreements  with  ISPs),  at  4  (suggesting  that  AOL  Time  Warner  intends  to  exercise  its  discretion  in  choosing  which  ISPs  participate  in  its  multiple  ISP  offerings  to  subscribers:  TWC  also  believes  that  this  partnering  arrangement 


 works  best  for  customers  because  TWC  is  putting  its  reputation  on  the  line  with  every  ISP  it  sells,  both  in  the  case  of  affiliated  ISPs  like  AOL,  and  unaffiliated  ones  like  EarthLink.).  See  also  AOL  Time  Warner  Inc.,  Texas 
 Networking,  Inc.,  Petition  for  Declaratory  Ruling  and  Complaint  Regarding  Violations  of  Merger  Conditions  and  for  Enforcement  of  Merger  Conditions,  CS  Docket  No.  00-  30,  AOL  Time  Warner  Response  and  Opposition  at  8  & 
 (continued....) 
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 service,  not  a  telecommunications  service.  Similarly,  to  the  extent  that  other  cable  providers  elect  to  provide  pure  telecommunications  to  selected  clients  with  whom  they  deal  on  an  individualized  basis,  we 
 would  expect  their  offerings  to  be  private  carrier  service. 
 56.  AT&  T  v.  City  of  Portland.  We  recognize  that  the  United  States  Court  of  Appeals  for  the  Ninth  Circuit  considered  issues  related  to  the  classification  of  cable  modem  service  in  AT&  T  v.  City  of 


 Portland.  211  While  we  are  considering  the  broad  issue  of  the  appropriate  national  framework  for  the  regulation  of  cable  modem  service,  the  Portland  court  considered  a  much  narrower  issue  --  whether  a 
 local  franchising  authority,  whose  authority  was  limited  to  cable  service,  had  the  authority  to  condition  its  approval  of  a  cable  operators  merger  on  the  operators  grant  of  multiple  ISP  access.  212  In  that  case,  the 
 court  held  that  the  cable  modem  service  at  issue,  @Home,  was  not  a  cable  service.  213  The  court  further  concluded  that: 


 @Home  consists  of  two  elements:  .  .  .  .  To  the  extent  @Home  is  a  conventional  ISP,  its  activities  are  that  of  an  information  service. 
 However,  to  the  extent  that  @Home  provides  its  subscribers  Internet  transmission  over  its  cable  broadband  facility,  it  is  providing  a 
 telecommunications  service  as  defined  in  the  Communications  Act.  214 
 57.  The  Ninth  Circuits  decision  was  based  on  a  record  that  was  less  than  comprehensive.  The  parties  proceeded  on  the  assumption  that  the  cable  modem  service  at  issue  was  a  cable  service  and 


 therefore  did  not  brief  the  regulatory  classification  issue.  215  Notably,  the  Commission,  filing  as  amicus  curiae,  was  not  a  party  to  the  case  and  did  not  provide  its  expert  opinion  on  this  issue.  216  In  contrast,  the 
 record  in  this  proceeding,  developed  over  the  course  of  a  year  through  written  comments  and  replies  and  meetings  with  interested  parties,  has  fully  addressed  the  classification  issue  and  explored  the 
 characteristics  of  cable  modem  service  as  it  is  now  provided. 
 58.  The  Ninth  Circuit  could  have  resolved  the  narrow  question  before  it  by  finding  that  cable  modem  service  is  not  a  cable  service.  Nevertheless,  in  the  passage  quoted  above  the  court  concluded  that 


 because  there  is  a  "telecommunications"  component  involved  in  providing  cable  modem  service,  a  separate  "telecommunications  service"  is  also  being  offered  within  the  meaning  of  section  3(  46)  of  the 


 (...  continued  from  previous  page)  n.  22  (describing  part  of  AOL  Time  Warners  multiple  ISP  access  activities,  specifically  a  questionnaire  for  ISPs  to 
 provide  [Time  Warner  Cable]  with  information  to  help  evaluate  the  companies  which  sought  to  enter  into  agreements  with  TWC.  It  requests  basic  information  touching  on  matters  related  to  the  integrity,  consumer 
 acceptability  and  stability  of  a  business  and  the  people  who  run  it.)  (filed  Sept.  4,  2001).  211 
 AT&  T  v.  City  of  Portland,  216  F.  3d  871  (9th  Cir.  2000)  (  Portland),  reversing  43  F.  Supp.  2d  1146  (D.  Ore.  1999). 


 212  Id.  at  875. 
 213  Id.  at  876. 
 214  Id.  at  878. 
 215  Id.  at  876  (noting  that  Portland  premised  its  open  access  condition  on  its  position  that  @Home  is  a  cable 
 service  governed  by  the  franchise).  216 
 Amicus  Brief  of  Federal  Communications  Commission,  AT&  T  Corp.  v.  City  of  Portland,  No.  99-  35609,  United  States  Court  of  Appeals  for  the  Ninth  Circuit,  filed  Aug.  16,  1999.  See  also  Portland,  216  F.  3d  at  876  (  We  note  at 


 the  outset  that  the  FCC  has  declined,  both  in  its  regulatory  capacity  and  as  amicus  curiae,  to  address  the  issue  before  us.  Thus,  we  are  not  presented  with  a  case  involving  potential  deference  to  an  administrative  agency's  statutory 
 construction  pursuant  to  the  Chevron  doctrine.). 
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 Act.  217  As  discussed  in  paragraph  40  above,  however,  under  the  Act  telecommunications  is  distinct  from  telecommunications  service.  Though  by  definition  an  information  service  includes  a  telecommunications 
 component,  the  mere  existence  of  such  a  component,  without  more,  does  not  indicate  that  there  is  a  separate  offering  of  a  telecommunications  service  to  the  subscriber.  218  The  Ninth  Circuit  did  not  have  the 
 benefit  of  briefing  by  the  parties  or  the  Commission  on  this  issue  and  the  developing  law  in  this  area.  219 
 59.  Commission  Authority.  Having  concluded  that  cable  modem  service  is  an  information  service,  we  clarify  that  it  is  an  interstate  information  service.  The  Commission  has  found  that  traffic 


 bound  for  information  service  providers  (including  Internet  access  traffic)  often  has  an  interstate  component.  220  The  Commission  concluded  that  although  such  traffic  is  both  interstate  and  intrastate  in 
 nature,  it  is  properly  classified  as  interstate  and  it  falls  under  the  Commissions  .  .  .  jurisdiction.  221  The  jurisdictional  analysis  rests  on  an  end-  to-  end  analysis,  in  this  case  on  an  examination  of  the  location  of  the 
 points  among  which  cable  modem  service  communications  travel.  These  points  are  often  in  different  states  and  countries.  222  Accordingly,  cable  modem  service  is  an  interstate  information  service.  223 


 217  See  Communications  Act    3(  46),  47  U.  S.  C.    153(  46). 
 218  Non-  Accounting  Safeguards  Remand,  16  FCC  Rcd  at  9755    8  (stating  that  the  categories  of 
 "telecommunications  service"  and  "information  service"  are  "mutually  exclusive);  Universal  Service  Order,  12  FCC  Rcd  at  9179-  80    788-  90  (stating  that  information  services  are  not  inherently  telecommunications  services 


 simply  because  they  are  offered  via  telecommunications).  219 
 We  also  note  that  the  Ninth  Circuits  determination  that  cable  modem  service  was  in  part  a  telecommunications  service  also  recognized  that  the  Commission  has  broad  authority  to  forbear  from  regulation  under    10  of  the  Act, 


 47  U.  S.  C.    160.  See  Portland,  216  F.  3d  at  879.  The  United  States  District  Court  for  the  Southern  District  of  California  has  applied  the  Ninth  Circuits  determination  that  a  cable  operator  providing  Internet  transmission  is 
 providing  a  telecommunications  service  and  has  held  that  that  determination  mandates  a  deferral  to  the  primary  jurisdiction  of  the  FCC  on  the  enforcement  of  the  common  carrier  obligations  of  the  statute.  The  District  Court 
 referred  specifically  to  the  Commissions  authority  to  forbear  from  regulating  telecommunications  services  in  certain  circumstances.  GTE.  Net  LLC  v.  Cox  Commun.,  Inc.,  Case  No.  00-  CV-  2289-  J  (BEN),  Order  Granting 
 Motion  to  Stay  and  Denying  Motion  to  Dismiss,  slip  op.  at  7-  9  (Jan.  29,  2002).  Although  we  do  not  forbear  from  Title  II  regulation  (to  the  extent  other  jurisdictions  seek  to  apply  it)  on  this  record,  we  do  tentatively  conclude  that 
 such  regulation  would  not  be  appropriate  and  that  we  should  forbear  from  it.  See  infra  para.  94.  220 
 Implementation  of  the  Local  Competition  Provisions  in  the  Telecommunications  Act  of  1996,  CC  Docket  No.  96-98,  Intercarrier  Compensation  for  ISP-  Bound  Traffic,  CC  Docket  No.  99-  68,  Order  on  Remand  and  Report  and 


 Order  (  Intercarrier  Compensation  Order)  FCC  01-  131    52  (rel.  Apr.  27,  2001),  available  at  2001  WL  455869,  petition  for  review  pending,  WorldCom,  Inc.  v.  FCC,  D.  C.  Circuit  Nos.  01-  1218  et  al. 


 221  Intercarrier  Compensation  Order,  supra  note  220  at    52  (footnote  omitted).  See  also  Southwestern  Bell  Tel. 
 Co.  v.  FCC,  153  F.  3d  523,  543  (8th  Cir.  1998)  (affirming  the  jurisdictionally  mixed  nature  of  ISP-  bound  traffic);  GTE  ADSL,  13  FCC  Rcd  at  22466    1  (concluding  that  [GTEs  ADSL  service],  which  permits  Internet  Service 


 Providers  (ISPs)  to  provide  their  end  user  customers  with  high-  speed  access  to  the  Internet,  is  an  interstate  service  and  is  properly  tariffed  at  the  federal  level). 


 222  See  Intercarrier  Compensation  Order,  supra  note  220,  at    14  (noting  longstanding  rule  that  the  jurisdictional 
 nature  of  ISP-  bound  traffic  should  be  determined,  consistent  with  Commission  precedent,  by  the  end  points  of  the  communication)  (footnote  omitted);  GTE  ADSL,  13  FCC  Rcd  at  22478-  79    22. 


 223  See  Communications  Act    2(  a);  47  U.  S.  C.  152(  a)  (granting  the  Commission  jurisdiction  over  all  interstate  and 
 foreign  communication  by  wire  or  radio  and  all  interstate  and  foreign  transmission  of  energy  by  radio,  which  originates  and/  or  is  received  within  the  United  States,  and  to  all  persons  engaged  within  the  United  States  in  such 


 communication  or  such  transmission  of  energy  by  radio,  .  .  .).  See  also  infra  paras.  75-  76  and  California  v.  FCC,  39  F.  3d  919,  932-  33  (9  th  Cir.  1994),  cert.  denied,  514  U.  S.  1050  (1995). 
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 C.  Cable  Service  Classification 
 60.  We  find  that  cable  modem  service  is  not  a  cable  service  under  the  definition  prescribed  by  the  Act.  224  Section  602  of  the  Act  defines  cable  service  as  (  A)  the  one-  way  transmission  to 


 subscribers  of  (i)  video  programming,  or  (ii)  other  programming  service,  and  (B)  subscriber  interaction,  if  any,  which  is  required  for  the  selection  or  use  of  such  video  programming  or  other  programming 
 service.  225  The  Act  further  defines  video  programming  as  programming  provided  by,  or  generally  considered  comparable  to  programming  provided  by,  a  television  broadcast  station.  226  Other 
 programming  service  is  defined  as  information  that  a  cable  operator  makes  available  to  all  subscribers  generally.  227  The  Act  states  that  a  cable  operator  provides  cable  service  over  a  cable  system  it  owns 
 or  manages.  228  Commenters  debating  whether  the  cable  service  definition  applies  to  cable  modem  service  focus  their  arguments  primarily  on  what  is  meant  by  the  terms  one-  way  transmission  and  other 
 programming  service  that  were  part  of  the  definition  as  originally  enacted  in  1984  and  the  term  or  use  added  in  1996.  We  will  analyze  key  phrases  in  the  statutory  definition. 


 61.  One-  Way  Transmission  to  Subscribers.  The  phrase  one-  way  transmission  to  subscribers  in  the  definition  reflects  the  traditional  view  of  cable  as  primarily  a  medium  of  mass  communication,  with 
 the  same  package  or  packages  of  video  programming  transmitted  from  the  cable  operator  and  available  to  all  subscribers.  229  When  the  definition  was  enacted  in  1984,  cable  systems  designed  for  the  traditional 
 one-  way  delivery  of  programming  were  developing  the  capability  to  provide    two-  way  services,  such  as  the  transmission  of  voice  and  data  traffic,  and  transactional  services  such  as  at-  home  shopping  and 
 banking.  230  The  legislative  history  indicates  that  Congress  intended  the  cable  service  definition  to  mark  the  boundary  between  those  services  provided  over  a  cable  system  which  would  be  exempted  from 
 common  carrier  regulation  under  section  621(  c)  and  all  other  communications  services  that  could  be  provided  over  a  cable  system.  231  Thus,  the  definition  reflected  the  traditional  view  that  the  one-  way 
 delivery  of  television  programs,  movies,  and  sporting  events  is  not  a  traditional  common  carrier  activity 
 224  See  Communications  Act    3(  7),  602(  6),  47  U.  S.  C.    153(  7)  and  522(  6). 
 225  47  U.  S.  C.  522(  6). 
 226  Communications  Act    602(  20),  47  U.  S.  C.  522(  20). 
 227  Id.    602(  14),  47  U.  S.  C.  522(  14). 
 228  Id.    602(  5),  47  U.  S.  C.    522(  5). 


 A  cable  system  is  a  facility,  consisting  of  a  set  of  closed  transmission  paths  and  associated  .  .  .  equipment  that  is  designed  to  provide  cable  service  which  includes  video  programming  and  which  is  provided  to  multiple 
 subscribers  within  a  community.  Id.    602(  7),  47  U.  S.  C.    522(  7).  The  Commission  has  concluded  that  the  term  cable  system  as  used  in  the  Act  encompasses  only  video  delivery  systems  that  employ  cable,  wire,  or  other 
 physically  closed  or  shielded  transmission  paths  to  provide  service  to  subscribers  .  .  .  .  Radio  services  that  do  not  use  such  closed  transmission  paths  at  all  .  .  .  are  therefore  not  cable  systems  under  the  Act.  Definition  of  a  Cable 
 Television  System,  MM  Docket  No.  89-  35,  Report  and  Order,  5  FCC  Rcd  7638,  7638    5  (1990),  remanded  in  part  on  other  grounds  sub  nom.  Beach  Commun.,  Inc.  v.  FCC,  959  F.  2d  975  (D.  C.  Cir.),  further  reconsidered  on  other 
 grounds,  965  F.  2d  1103  (D.  C.  Cir.  1992),  revd,  508  U.  S.  307  (1993).  Cf.  H.  R.  Conf.  Rep.  No.  485,  104  th  Cong.  2d  Sess.  113,  114,  116  (1996)  (  Joint  Explanatory  Statement),  reprinted  in  1996  U.  S.  C.  C.  A.  N.  124,  125,  127  (using 
 closed  transmission  to  refer  to  a  transmission  medium  when  explaining  the  term  telecommunications).  We  disagree  with  EarthLinks  suggestion  in  its  Reply  Comments  at  20  n.  63  that  the  term  closed  transmission  paths  in 
 this  definition  provides  guidance  in  interpreting  the  cable  service  definition.  We  find  no  basis  for  concluding  that  the  term  was  intended  by  Congress  to  have  significance  beyond  describing  the  physical  facilities  of  a  cable  system. 
 229  See  H.  R.  Rep.  No.  934,  98  th  Cong.  2d  Sess.  22,  27  (1984)  (  1984  House  Report),  reprinted  in  1984 
 U.  S.  C.  C.  A.  N.  4655,  4659,  4664.  230 
 See  1984  House  Report  at  27,  1984  U.  S.  C.  C.  A.  N.  at  4664.  231 
 1984  House  Report  at  41,  1984  U.  S.  C.  C.  A.  N.  at  4678. 
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 and  should  not  be  regulated  as  such.  232 
 62.  The  Commission  has  previously  interpreted  the  term  transmission  in  the  cable  services  definition  as  requiring  active  participation  in  the  selection  and  distribution  of  video  programming,  an 


 interpretation  that  the  D.  C.  Circuit  has  upheld.  233  In  the  Video  Dialtone  proceeding,  the  Commission  found  that  control  over  video  content  distinguished  cable  service  from  video  dialtone  service,  the 
 provision  of  a  transparent  video  conduit  to  be  used  for  delivering  the  programming  of  others.  234  Because  the  one  way  transmission  requirement  applies  to  all  content  in  the  cable  services  definition,  operator 
 control  over  the  selection  of  content  offered  to  subscribers  is  a  characteristic  of  both  video  programming  and  other  programming  service  provided  as  a  cable  service.  We  recognize,  as  AT&  T  and  the  National 
 League  of  Cities  point  out,  that  some  operators  or  their  affiliated  ISPs  may  themselves  produce  or  obtain  the  rights  to  content  accessible  through  their  web  sites,  235  but  cable  operators  do  not  control  the  majority 
 of  information  accessible  by  cable  modem  subscribers,  as  discussed  further  below. 
 63.  Other  Programming  Service.  The  statutory  definition  specifies  that  cable  service  includes  two  types  of  content.  One  is  the  video  programming  historically  transmitted  by  cable  operators  to 


 subscribers,  which  is  not  provided  today  through  cable  modem  service,  236  as  commenters  generally 
 232  See  Communications  Act    621(  c),  47  U.  S.  C.    541(  c)  (  Any  cable  system  shall  not  be  subject  to  regulation  as  a 
 common  carrier  or  utility  by  reason  of  providing  any  cable  service.);  id.    621(  d)(  2),  47  U.  S.  C.    541(  d)(  2)  (  Nothing  in  this  title  [VI]  shall  be  construed  to  affect  the  authority  of  any  State  to  regulate  any  cable  operator  to  the 


 extent  that  such  operator  provides  any  communication  service  other  than  cable  service,  whether  offered  on  a  common  carrier  or  private  contract  basis.);  1984  House  Report  at  29,  41,  1984  U.  S.  C.  C.  A.  N.  at  4666,  4678.  See 
 also  Communications  Act    624(  a),  47  U.  S.  C.    544(  a)  ([  a]  ny  franchising  authority  may  not  regulate  the  services,  facilities,  and  equipment  provided  by  a  cable  operator  except  to  the  extent  consistent  with  this  title  [VI]). 
 233  See  Telephone  Company-  Cable  Television  Cross-  Ownership  Rules,  Sections  63.  54-  63.  58,  CC  Docket  No.  87- 
 266,  Memorandum  Opinion  and  Order  on  Reconsideration  (  Video  Dialtone  Reconsideration),  7  FCC  Rcd  5069,  5071    16,  5072    18  (1992),  affd,  National  Cable  Television  Assn.  v.  FCC  (  NCTA  v.  FCC),  33  F.  3d  66,  73  (D.  C. 


 Cir.  (1994).  See  also  Telephone  Company-  Cable  Television  Cross-  Ownership  Rules,  Sections  63.  54-  63.  58,  CC  Docket  No.  87-  266,  Memorandum  Opinion  and  Order  on  Reconsideration  and  Third  Further  Notice  of  Proposed 
 Rulemaking,  10  FCC  Rcd  244,  290-  91    97  (1994)  (traditional  cable  operators  select  or  provide  the  video  programming  available  to  subscribers);  Second  Report  and  Order,  Recommendation  to  Congress,  and  Second 
 Further  Notice  of  Proposed  Rulemaking  (  Video  Dialtone  Second  Report),  7  FCC  Rcd  5781,  5817    69  (1992)  (cable  operators  select  video  programming  by  owning,  exercising  editorial  control  over,  or  having  cognizable 
 financial  interests  in,  video  programming  and  by  making  decisions  concerning  the  price  of  video  program  offerings  and  by  bundling,  packaging,  and  creating  tiers  of  video  programming);  1984  House  Report  at  43,  1984 
 U.  S.  C.  C.  A.  N.  at  4680  (stating  that  the  options  or  categories  available  as  cable  services  would  be  created  by  the  cable  operator  or  programming  service  provider  and  made  generally  available  to  all  subscribers  and  would  be 
 delineated  by  the  cable  operator  or  the  programming  service  provider).  The  1996  Act  amendments  to  the  Communications  Act  affecting  video  dialtone  did  not  alter  the  analysis  of  cable  service  in  the  Video  Dialtone 
 proceeding  or  in  NCTA  v.  FCC.  234 
 See  Video  Dialtone  Reconsideration,  7  FCC  Rcd  at  5071-  72;  NCTA  v.  FCC,  33  F.  3d  at  71;  see  also  Entertainment  Connections,  Inc.  (  ECI),  13  FCC  Rcd  14277,  14303    55,  14311    73  (1998),  review  denied  sub 


 nom.  City  of  Chicago  v.  FCC,  199  F.  3d  424  (7  th  Cir.  1999),  cert.  denied,  531  U.  S.  825  (2000).  235 
 AT&  T  Comments  at  10-  11,  14;  National  League  of  Cities  Comments  at  9  n.  10.  See  1984  House  Report  at  42,  1984  U.  S.  C.  C.  A.  N.  at  4679  (the  cable  operator  need  not  create  the  content  itself;  the  provision  of  information  over 


 a  cable  system  by  a  channel  lessee  or  by  the  cable  operator  through  a  joint  venture  or  other  commercial  arrangement  would  be  a  cable  service  if  it  met  all  other  criteria  for  being  a  cable  service).  We  note  that  operator  control  is 
 specifically  limited  by  statute  with  respect  to  channels  made  available  for  public,  educational  and  governmental  access  (section  611)  and  leased  access  (section  612),  and  in  the  conditions  governing  carriage  of  the  signals  of 
 television  broadcast  stations  (sections  614  and  615),  47  U.  S.  C.    531,  532,  534,  535.  236 
 Internet  video,  called  "streaming  video"  because  data  are  streamed"  over  the  Internet  to  provide  continuous  motion  video,  has  not  yet  achieved  television  quality.  See  Annual  Assessment  of  the  Status  of  Competition  in  the 


 (continued....) 
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 agree.  237  The  other  is  the  category  of  other  programming  service,  which  the  Act  defines  as  information  that  a  cable  operator  makes  available  to  all  subscribers  generally.  238  The  1984  legislative  history 
 describes  other  programming  service  as  non-  video  information  having  the  characteristics  of  traditional  video  programming.  239  Other  programming  service  does  not  include  information  that  is 
 subscriber  specific.  240 
 64.  Subscriber  Interaction.  While  cable  service  is  defined  as  the  one-  way  transmission  of  video  programming  or  other  programming  services,  the  definition  specifically  contemplates  some 


 subscriber  interaction.  The  definition  enacted  in  1984  provided  for  subscriber  interaction,  if  any,  which  is  required  for  the  selection  of  content,  so  that  cable  service  includes  subscribers  ability  to  select  video 
 programming  and  information  provided  in  other  non-  video  programming  services.  241  The  legislative  history  states  that  Congress  intended  simple  menu-  selection  or  searches  of  pre-  sorted  information  from 
 an  index  of  keywords  that  would  not  activate  a  sorting  program  and  would  not  produce  a  subset  of  data  individually  tailored  to  the  subscribers  request  to  be  cable  services.  On  the  other  hand,  offering  the 
 capacity  to  engage  in  transactions  or  off-  premises  data  processing,  242  including  unlimited  keyword  searches  or  the  capacity  to  communicate  instructions  or  commands  to  software  programs  stored  in 
 facilities  off  the  subscribers  premises,  243  would  not  be.  244  Thus,  operators  offering  video  programming  or  non-  video  information  could  also  offer  subscribers  the  on-  line  capability  to  choose  the  content  of  interest 
 to  them,  but  not  to  manipulate,  customize  or  interact  with  the  information  on-  line.  245  As  the  Commission  has  held,  services  offering  a  high  degree  of  interactivity,  such  as  offering  subscribers  the  capability  for 
 tailoring  a  video  image  to  a  subscribers  specific  requests,  would  fall  outside  the  scope  of  video 
 (...  continued  from  previous  page)  Market  for  the  Delivery  of  Video  Programming,  CS  Docket  No.  00-  132,  Seventh  Annual  Report,  16  FCC  Rcd  6005, 
 6054    107  &  n.  379  (2001);  see  also  supra  note  39.  Streaming  video,  therefore,  is  not  consistent  with  the  definition  of  video  programming.  Even  if  streaming  video  does  achieve  television  quality,  it  would  not  be  treated  as  a  cable 
 service  unless  it  otherwise  falls  within  the  definition  of  cable  service.  237 
 See  e.  g.,  AT&  T  Reply  Comments  at  30;  EarthLink  Reply  Comments  at  15.  See  generally  Internet  Ventures,  15  FCC  Rcd  3247  (denying  access  to  a  leased  channel  for  Internet  access  service  because  the  varied  array  of  services 


 comprising  the  service  today  are  not  limited  to  video  programming,  the  only  use  for  which  leased  channels  are  available  under  section  612  of  the  Act,  47  U.  S.  C.    532). 
 238  47  U.  S.  C.    522(  14). 
 239  1984  House  Report  at  41,  1984  U.  S.  C.  C.  A.  N.  at  4678. 
 240  See  id.  at  41-  42,  1984  U.  S.  C.  C.  A.  N.  at  4678-  79  (  If  information  transmitted  on  a  cable  system  is  made  available 
 only  to  an  individual  subscriber  or  to  a  discrete  group  of  subscribers,  the  transmission  of  this  information  is  not  a  cable  service.). 


 241  Pub.  L.  No.  98-  549    2,  98  Stat.  2779,  2780  (1984)  (text  of  new  section  602(  5)(  B)  defining  cable  service);  see 
 1984  House  Report  at  43,  1984  U.  S.  C.  C.  A.  N.  at  4680.  242 
 See  1984  House  Report  at  42,  1984  U.  S.  C.  C.  A.  N.  at  4679  (  In  general,  services  providing  subscribers  with  the  capacity  to  engage  in  transactions  or  to  store,  transform,  forward,  manipulate,  or  otherwise  process  information  or 


 data  would  not  be  cable  services.).  243 
 According  to  the  legislative  history,  examples  of  software  programs  included  computer  or  video  games  or  statistical  packages  stored  off-  premises.  The  transmission  and  downloading  of  software  programs,  video  games,  and 


 statistical  packages  to  personal  computers  could  be  a  cable  service  if  the  information  were  made  available  to  all  subscribers  and  not  used  interactively  over  the  cable  system.  Id.  at  42,  1984  U.  S.  C.  C.  A.  N.  at  4679. 
 244  Id.  at  42-  43,  1984  U.  S.  C.  C.  A.  N.  at  4679-  80. 
 245  See  Video  Dialtone  Second  Report,  7  FCC  Rcd  at  5821    75  (addressing  the  definition  of  video  programming 
 in  the  context  of  adopting  video  dialtone  rules).  Because  video  programming  and  non-  video  information  are  treated  comparably  in  the  statute,  the  reasoning  the  Commission  applied  to  video  programming  in  Video  Dialtone  Second 


 Report  is  applicable  to  non-  video  information  as  well. 
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 programming  under  the  definition  of  cable  service  enacted  in  1984.  246 
 65.  Or  Use.  The  1996  Telecommunications  Act  (  1996  Act)  added  the  words  or  use  to  the  cable  service  definition,  so  that  a  cable  service  may  now  include  subscriber  interaction,  if  any,  which 


 is  required  for  the  selection  or  use  of  cable  services.  247  We  disagree  with  those  cable  operator  and  franchising  authority  commenters  who  argue  that  this  amendment  brings  cable  modem  service  within  the 
 definition  of  cable  service.  248  The  amendment  itself  addresses  only  the  use  of  content  otherwise  qualifying  as  cable  service.  As  the  D.  C.  Circuit  has  pointed  out,  the  subsection  of  the  definition  permitting 
 subscriber  interaction  is  qualified  by  the  term  if  any,  implying  that  subscriber  interaction  .  .  .  is  not  a  necessary  component  of  cable  service.  249  Cable  service  continues  to  be  defined  as  the  one-  way 
 transmission  to  subscribers,  and  both  video  programming  and  other  programming  services  remain  subject  to  this  limitation.  250  The  definition  of  other  programming  service  continues  to  be  information 
 that  a  cable  operator  makes  available  to  all  subscribers  generally.  251 
 66.  The  legislative  history  relied  on  by  commenters  who  favor  an  expansive  reading  of  the  amendment  does  not  require  the  result  they  advocate.  The  Joint  Explanatory  Statement  for  the  1996  Act 


 states:  The  conferees  intend  the  amendment  to  reflect  the  evolution  of  cable  to  include  interactive  services  such  as  game  channels  and  information  services  made  available  to  subscribers  by  the  cable 
 operator,  as  well  as  enhanced  services.  252  This  statement  supports  an  intent  to  permit  interactivity  associated  with  both  video  and  other  programming  services  provided  by  cable  operators  to  subscribers.  If 
 Congress  intended  by  the  language  in  the  Joint  Explanatory  Statement  to  broaden  the  meaning  of  cable  services  to  include  stand-  alone  information  services  as  defined  in  the  1996  Act  or  enhanced  services 
 as  that  term  has  traditionally  been  defined,  the  language  of  the  statute  itself  does  not  reflect  this  intent. 
 67.  In  light  of  the  statutory  language  itself  and  the  ambiguities  in  the  legislative  history,  we  find  that  the  addition  of  the  term  or  use  to  the  definition  of  cable  service  does  not  bring  cable  modem 


 service  within  the  definition  of  cable  service.  Rather,  we  believe  that  the  one-  way  transmission  requirement  in  that  definition  continues  to  require  that  the  cable  operator  be  in  control  of  selecting  and 
 distributing  content  to  subscribers  and  that  the  content  be  available  to  all  subscribers  generally.  Based  on 
 246  Id. 
 247  Pub.  L.  No.  104-  104    301(  a)(  1),  110  Stat.  56,  114,  47  U.  S.  C.    552(  6)(  B)  (emphasis  added). 
 248  See  Comcast  Comments  at  17;  Cox  Aug.  15,  2001  Ex  Parte  at  7;  NCTA  Comments  at  6;  National  League  of 
 Cities  Comments  at  9.  Others  argue  that  the  amendment  simply  reflects  the  evolution  of  two-  way  video  services,  game  channels,  or  program  guides,  but  makes  no  fundamental  change  to  the  meaning  of  cable  service.  See  Texas 


 Office  of  Public  Utility  Counsel  Reply  Comments  at  18  (  Congress  wanted  to  accommodate  interactivity  that  might  surround  one-  way  video  services);  OpenNET  Comments  at  7-  8  (information  received  by  subscribers  must  be 
 available  to  all  subscribers  generally);  WorldCom  Reply  Comments  at  30.  249 
 NCTA  v.  FCC,  33  F.  3d  at  72.  250 
 See  Communications  Act    602(  6)(  A),  47  U.  S.  C.    522(  6)(  A).  251 
 See  id.  602(  14),  47  U.  S.  C.    522(  14).  252 
 Joint  Explanatory  Statement  at  169,  1996  U.  S.  C.  C.  A.  N.  at  182.  The  conferees  added,  This  amendment  is  not  intended  to  affect  Federal  or  State  regulation  of  telecommunications  service  offered  through  cable  system  facilities, 


 or  to  cause  dial-  up  access  to  information  services  over  telephone  lines  to  be  classified  as  a  cable  service.  The  House,  whose  version  of  the  amendment  was  adopted  in  conference,  had  explained  the  addition  of  the  term  or  use 
 only  as  reflecting  the  evolution  of  video  programming  toward  interactive  services.  Id.  at  167,  1996  U.  S.  C.  C.  A.  N.  at  180.  Some  commenters  also  cite  Representative  Dingells  remarks  during  the  floor  debates,  which  state  that 
 [  t]  his  conference  agreement  strengthens  the  ability  of  local  governments  to  collect  fees  for  the  use  of  public  right-of-  way.  For  example,  the  definition  of  the  term  cable  service  has  been  expanded  to  include  game  channels  and 
 other  interactive  services.  See  National  League  of  Cities  Comments  at  6-  7  (quoting  142  Cong.  Rec.  H1156  (daily  ed.  Feb.  1,  1996)  (remarks  of  Rep.  Dingell)). 
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 the  record  before  us,  we  find  that  cable  modem  service  does  not  have  the  characteristics  required  for  a  cable  service.  The  record  shows  cable  modem  service  to  be  a  service  built  around  Internet  access,  which, 
 among  other  things,  allows  subscribers  to  define  searches  for  information  throughout  the  World  Wide  Web,  query  web  sites  for  information,  engage  in  transactions,  receive  individually  tailored  responses  to 
 their  requests,  generate  their  own  information,  and  exchange  e-  mail.  253  That  the  cable  operator  makes  subscriber  access  to  the  Internet  possible  does  not  establish  the  operators  control  over  the  selection  of  the 
 information  made  available  to  subscribers  via  the  Internet.  254  Facilitating  subscriber  use  of  the  Internet  by  giving  subscribers  access  to  the  Internets  TCP/  IP  protocols,  255  making  commercial  arrangements  for 
 connections  to  the  Internet  backbone  network,  256  providing  links  to  search  engines  on  the  home  page,  providing  home  page  links  to  web  sites  that  can  be  searched,  257  or  caching  frequently  requested 
 information  to  enhance  the  high-  speed  performance  of  the  network,  258  does  not  put  the  Internet  experience  offered  through  the  cable  modem  service  in  either  the  video  programming  or  other  programming  service 
 categories  of  cable  service.  These  capabilities  may  make  the  subscribers  Internet  experience  easier,  faster,  and  more  convenient,  but  the  ultimate  control  of  the  experience  lies  with  the  subscriber.  259  As 
 EarthLink  comments,  the  majority  of  the  information  accessed  over  the  Internet  is  chosen  individually  by  the  Internet  user  without  the  involvement  of  the  cable  operator  or  a  third  party  with  which  it  contracts  in 
 the  creation  or  selection  of  the  content.  260  Furthermore,  much  of  the  information  received  by  the  subscriber  is  tailored  to  that  subscribers  interests. 


 68.  Including  proprietary  information  or  packages  of  pre-  selected  web  site  links  in  the  service 


 253  See  WorldCom  Comments  at  10  (disputing  that  these  types  of  activities  are  cable  service);  WorldCom  Reply 
 Comments  at  28  (arguing  that  subscriber  interaction  is  the  essence  of  Internet  service,  not  merely  ancillary  to  a  one-way  service).  See  also  EarthLink  Reply  Comments  at  20  n.  64  (stating  that  the  AT&  T  Website  Agreement  it  found  at 


 www.  att.  com/  terms  shows  that  AT&  T  does  not  control  the  information  available  through  its  cable  modem  service).  254 
 See  AT&  T  Comments  at  13;  Cox  Aug.  15,  2001  Ex  Parte  at  6-  7  (advocating  that  providing  Internet  capability  satisfies  the  requirement  that  the  operator  make  the  information  generally  available). 


 255  See  NATOA  Comments  at  8  n.  11. 
 256  See  AT&  T  Comments  at  16  n.  22. 
 257  See  id.  at  11. 
 258  See  Cox  Aug.  15,  2001  Ex  Parte  at  7.  Cox  and  AT&  T  also  argue  that  cable  modem  service  would  be  classified  as 
 cable  service  under  the  1984  definition  because  on-  line  computer  services  were  included  in  the  other  programming  service  category  in  the  original  definition.  Id.  at  6;  AT&  T  Comments  at  13.  The  1984  House  Report 


 describes  transmitting  and  downloading  computer  software,  such  as  computer  games  or  statistical  packages,  for  use  on  personal  computers  as  a  cable  service;  on-  line  interactivity,  such  as  data  base  searching,  fell  outside  the 
 definition.  1984  House  Report  at  42-  43,  1984  U.  S.  C.  C.  A.  N.  at  4679-  80.  259 
 The  FCC  Local  State  Government  Advisory  Committee  (  LSGAC)  argues  that  there  is  nothing  inconsistent  about  a  service  being  simultaneously  a  cable  service  and  an  information  service.  In  fact--  all  cable  services 


 offered  by  a  cable  operator  appear  to  be  information  services  because  cable  services  offer  the  capability  for  .  .  .  making  available  information  via  telecommunications,  and  includes  electronic  publishing.    LSGAC,  Advisory 
 Recommendation  No.  26,  In  the  Matter  of  Inquiry  Concerning  High  Speed  Cable  Access  to  the  Internet  Over  Cable  and  Other  Facilities,  GN  Docket  No.  00-  185  (Feb.  5,  2002)  (  LSGAC  Advisory  Recommendation  No.  26),  at  1-  2, 
 transmitted  by  letter  from  Kenneth  S.  Fellman,  Chairman,  LSGAC,  to  Magalie  Roman  Salas,  Secretary,  FCC  (Feb.  5,  2002),  transmitted  by  letter  from  Elizabeth  Jackson  for  Kenneth  S.  Fellman  to  Dr.  Emily  Hoffnar,  FCC  (Feb.  5, 
 2002).  Even  if  there  is  an  overlap  between  cable  services  and  information  services,  however,  this  would  not  make  all  information  services  cable  services.  As  discussed  above,  offering  the  capability  for  making  information  available 
 does  not  establish  that  the  operator  controls  the  selection  and  distribution  of  the  information  and  that  the  information  is  generally  available  as  required  for  a  cable  service. 
 260  EarthLink  Comments  at  11. 
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 does  not  change  the  classification.  261  Even  if  discrete  parts  of  cable  modem  service  have  characteristics  of  cable  service,  that  does  not  require  classification  of  the  service  as  a  cable  service  when  it  is  predominantly 
 Internet  access.  262  NCTA  points  to  language  in  the  1984  House  Report  stating  that  the  regulatory  classification  of  separate  cable  services  and  non-  cable  services  is  not  affected  by  the  packaging  or 
 marketing  of  such  services  together.  263  NCTA  argues  from  this  that  the  bundling  of  non-  cable  services  with  cable  services  does  not  contaminate  the  cable  service  or  transform  it  into  a  non-  cable  service.  The 
 House  Report  language  does  not  persuade  us  that  the  integrated  cable  modem  service  should  be  classified  as  a  cable  service.  The  House  Report  reflects  congressional  intent  in  1984,  expressed  again  in  the  Joint 
 Explanatory  Statement  accompanying  the  1996  Act,  264  that  existing  regulatory  authority  over  non-communications  services  was  not  to  be  affected  by  Title  VI,  and  it  is  consistent  with  the  Commissions 
 treatment  of  bundled  offerings  of  separate  telecommunications  services  with  non-  telecommunications  services.  Our  determination  that  cable  modem  service  is  not  a  cable  service  does  not  mean  that  the  cable 
 operator  cannot  provide  the  service,  just  that  the  service  is  not  subject  to  Title  VI. 
 69.  Internet  Tax  Freedom  Act.  We  also  are  not  persuaded  by  arguments  that  the  Internet  Tax  Freedom  Act,  enacted  more  than  two  years  after  the  amendment  at  issue,  demonstrates  any  congressional 


 intent  regarding  the  regulatory  classification  of  cable  modem  service.  265  That  statute  provides  for  a  moratorium  on  taxes  on  Internet  access,  unless  such  tax  was  generally  imposed  and  actually  enforced 
 prior  to  October  1,  1998.  266  The  statute  defines  tax  as  (  i)  any  charge  imposed  by  any  governmental  entity  for  the  purpose  of  generating  revenues  for  governmental  purposes,  and  is  not  a  fee  imposed  for  a 
 specific  privilege,  service,  or  benefit  conferred;  or  (ii)  the  imposition  on  a  seller  of  an  obligation  to  collect  and  to  remit  to  a  governmental  entity  any  sales  or  use  tax  imposed  on  a  buyer  by  a  governmental 
 entity.  267  It  specifically  exempts  franchise  fees  for  cable  services  from  the  definition  of  taxes.  268  Los  Angeles  and  the  National  League  of  Cities  argue  that  this  exemption  would  not  be  necessary  unless 
 Congress  believed  cable  modem  service  to  be  a  cable  service.  269  However,  the  views  of  a  subsequent  Congress  form  a  hazardous  basis  for  inferring  the  intent  of  an  earlier  one,  270  and  as  the  National  League 
 of  Cities  acknowledges,  may  not  be  dispositive.  271  Nothing  in  the  Internet  Tax  Freedom  Act  shows  any 
 261  See  AT&  T  Comments  at  10-  11,  14-  15;  Cox  Aug.  15,  2001  Ex  Parte  at  8  (stating  that  cable  operators  offer  a 
 cable  modem  service  that  integrates  high-  speed  Internet  access,  content,  information  and  services).  Compare  OpenNET  Reply  Comments  at  9-  10  (contending  that  customer  using  cable  modem  service  does  not  need  proprietary 


 home  page)  with  AT&  T  Reply  Comments  at  31-  32  (stating  that  it  is  irrelevant  that  subscribers  can  bypass  the  cable  operators  home  page  as  long  as  the  information  is  made  available  to  subscribers). 
 262  See  AT&  T  Comments  at  14  (arguing  that  if  any  part  of  cable  modem  service  can  be  classified  as  a  cable  service, 
 the  service  in  its  entirety  should  be  classified  as  a  cable  service).  263 
 NCTA  Reply  Comments  at  7  (citing  1984  House  Report  at  44,  1984  U.  S.  C.  C.  A.  N.  at  4681;  Universal  Service  Report,  13  FCC  Rcd  at  11536,  11539    75,  79). 


 264  1984  House  Report  at  41,  1984  U.  S.  C.  C.  A.  N.  at  4678;  Joint  Explanatory  Statement  at  169,  1996  U.  S.  C.  C.  A.  N.  at 
 182.  265 
 Internet  Tax  Freedom  Act,  Pub.  L.  No.  105-  277,  Div.  C,  Title  XI,    1100-  1104,  112  Stat.  2681-  719  (1998),  47  U.  S.  C.    151  note  (  Internet  Tax  Freedom  Act). 


 266  Id.    1101(  a)(  1). 
 267  Id.    1104(  8)(  A). 
 268  Id.    1104(  8)(  B).  It  also  exempts  fees  for  open  video  systems  operating  pursuant  to  Communications  Act    653, 
 47  U.  S.  C.    573,  and  any  other  fee  related  to  obligations  or  telecommunications  carriers  under  the  Communications  Act.  Id. 


 269  See  Los  Angeles  Comments  at  16;  National  League  of  Cities  Comments  at  10-  11. 
 270  United  States  v.  Price,  361  U.  S.  304,  313  (1960). 
 271  National  League  of  Cities  Comments  at  10. 
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 congressional  intent  to  address  or  amend  the  statutory  definition  of  cable  service  in  the  Communications  Act.  The  exemption  simply  makes  clear  that  franchise  fee  obligations  for  cable  services 
 are  not  affected  by  the  moratorium. 
 D.  Other  Statutory  Classifications 
 70.  A  few  commenters  advocate  other  statutory  classifications  for  cable  modem  service,  such  as  "advanced  telecommunications  capability"  as  defined  in  section  706  of  the  1996 


 Telecommunications  Act.  272  Most  cable  modem  service  fits  within  our  definition  of  advanced  telecommunications  capability  because  it  affords  the  user  the  ability  to  send  and  receive  information  at 
 speeds  higher  than  200  kbps.  273  Section  706  does  not,  however,  impose  particular  obligations  on  providers  of  such  capability.  Accordingly,  we  need  not  consider  cable  modem  service's  status  as 
 advanced  telecommunications  capability  in  resolving  the  issue  of  statutory  classification.  Consistent  with  section  706,  however,  in  the  following  Section,  we  seek  comment  on  what  regulatory  framework  will 
 promote  the  deployment  of  cable  modem  service,  as  well  as  other  forms  of  advanced  telecommunications  capability,  to  all  Americans  in  a  reasonable  and  timely  fashion.  274 


 71.  Some  commenters  suggest  that  we  create  a  category  of  service  that  would  be  within  our  general  authority  over  "interstate  and  foreign  commerce  in  communication  by  wire  and  radio."  275 
 Because  we  have  found  that  cable  modem  service  fits  within  the  statutory  definition  of  an  information  service,  we  need  not  consider  whether  we  have  the  authority  to  create  a  new  category  of  service. 


 IV.  NOTICE  OF  PROPOSED  RULEMAKING 
 A.  Background 
 72.  Having  determined  that  cable  modem  service  is  an  interstate  information  service,  we  now  address  the  regulatory  implications  of  our  determination.  We  note  that  the  record  in  the  Notice  contains 


 extensive  comments  on  the  Commissions  authority  to  regulate  cable  modem  service,  as  well  as  the  costs  and  benefits  of  imposing  a  multiple  ISP  requirement  on  cable  operators.  Nonetheless,  we  initiate  a 
 rulemaking  proceeding  to  examine  these  issues  in  light  of  the  Commissions  recent  initiation  of  the  Wireline  Broadband  NPRM.  276  We  also  seek  to  further  examine  the  scope  of  the  Commissions 
 jurisdiction  to  regulate  cable  modem  service,  including  whether  there  are  any  Constitutional  limitations  on  the  exercise  of  that  jurisdiction.  Next,  in  light  of  marketplace  developments,  we  consider  whether  it  is 
 necessary  or  appropriate  at  this  time  to  require  that  cable  operators  provide  unaffiliated  ISPs  with  the  right  to  access  cable  modem  service  customers  directly  (what  we  refer  to  hereafter  as  multiple  ISP  access). 
 We  also  seek  comment  on  the  role  of  state  and  local  franchising  authorities  in  regulating  cable  modem  service.  Finally,  we  note  the  relationship  between  our  classification  decision  and  statutory  or  regulatory 
 provisions  concerning  pole  attachments,  universal  service,  and  the  protection  of  subscriber  privacy. 


 272  AT&  T  Comments  at  29-  30.  See  also  ACA  Comments  at  15  (  advanced  service). 
 273  Second  706  Report,  15  FCC  Rcd  at  20920    11. 
 274  Section  706  of  the  1996  Act,  supra  note  14,  requires  that  the  Commission  .  .  .  encourage  the  deployment  on  a 
 reasonable  and  timely  basis  of  advanced  telecommunications  capability  to  all  Americans  (including,  in  particular,  elementary  and  secondary  schools  and  classrooms)  by  utilizing,  in  a  manner  consistent  with  the  public  interest, 


 convenience,  and  necessity,  price  cap  regulation,  regulatory  forbearance,  measures  that  promote  competition  in  the  local  telecommunications  market,  or  other  regulating  methods  that  remove  barriers  to  infrastructure  investment. 
 275  SBC/  BellSouth  Comments  at  13-  24;  Communications  Act    1,  2(  a),  47  U.  S.  C.    151,  152(  a). 
 276  The  proceeding  initiated  by  our  Notice  in  GN  Docket  No.  00-  185  is  left  open  only  to  the  extent  that  the  Notice 
 raised  issues  that  are  also  raised  in  this  notice  of  proposed  rulemaking. 
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 73.  In  considering  whether  regulation  of  cable  modem  service  is  appropriate,  we  are  guided  by  the  principles  set  forth  above.  277  First  and  foremost,  we  are  guided  by  our  statutory  mandates  to 
 encourage  the  ubiquitous  availability  of  broadband  to  all  Americans.  278  Section  706  of  the  1996  Act  charges  the  Commission  with  encourag[  ing]  the  deployment  on  a  reasonable  and  timely  basis  of 
 advanced  telecommunications  capability  to  all  Americans  by  regulatory  forbearance,  measures  that  promote  competition  or  other  regulating  methods  that  remove  barriers  to  infrastructure  investment.  279 
 Moreover,  consistent  with  section  230(  b)(  2)  of  the  Act,  we  seek  to  preserve  the  vibrant  and  competitive  free  market  that  presently  exists  for  the  Internet  and  other  interactive  computer  services,  unfettered  by 
 Federal  or  State  regulation.  280  Second,  we  are  mindful  of  the  need  to  minimize  both  regulation  of  broadband  services  and  regulatory  uncertainty  in  order  to  promote  investment  and  innovation  in  a 
 competitive  market.  281  Third,  we  seek  to  encourage  facilities-  based  broadband  competition.  By  promoting  development  and  deployment  of  multiple  platforms,  we  will  best  ensure  that  public  demands 
 and  needs  for  broadband  services  can  be  met.  Fourth,  we  strive  to  develop  an  analytical  approach  that  is,  to  the  extent  possible,  consistent  across  multiple  platforms. 


 74.  Different  Models  of  Multiple  ISP  Access.  The  Notice  in  this  docket  sought  comment  on  three  possible  models  pursuant  to  which  a  cable  operator  could  be  required  to  provide  multiple  ISP 
 access.  282  Some  commenters  addressed  one  or  more  of  these  models.  283  Other  commenters  proposed  different  models  for  mandating  multiple  ISP  access.  While  some  proposed  to  rely  primarily  on  private 
 negotiation  among  cable  operators  and  ISPs,  284  others  proposed  regulation  comparable  to  that  imposed  on  incumbent  LECs  DSL  service  285  or  to  cable  operators  leased  access  obligations.  286  Others  advocated 
 regulation  of  the  cable  operators  facilities  comparable  to  regulation  of  the  unbundled  network  elements  of  incumbent  LECs  pursuant  to  section  251(  c)(  3).  287  Another  form  of  multiple  ISP  access  is  provided 


 277  See  supra  paras.  4-  6. 
 278  Wireline  Broadband  NPRM,  supra  note  12,  at    3. 
 279  See  supra  note  14. 
 280  See  Communications  Act    230(  b)(  2),  47  U.  S.  C.    230(  b)(  2). 
 281  See  Wireline  Broadband  NPRM,  supra  note  12,  at    5. 
 282  The  Notice  stated:  Under  one  open  access  model,  no  particular  connecting  ISP  has  a  privileged  or  preferred 
 relationship  with  the  cable  operator;  rather,  each  ISP  purchases  transmission  capability  and  customer  access  from  the  cable  operator  on  nondiscriminatory  prices,  terms  and  conditions,  and  the  cable  operator  manages  the  network 


 on  a  nondiscriminatory  basis.  Under  a  second  open  access  model,  multiple  ISPs  purchase  transmission  capability  and  customer  access  from  the  cable  operator  on  nondiscriminatory  prices,  terms,  and  conditions,  but  an  affiliated  or 
 preferred  ISP  manages  the  network  on  a  nondiscriminatory  basis.  Under  a  third  model,  multiple  unaffiliated  ISPs  would  obtain  access  to  the  cable  modem  platform  according  to  agreements  negotiated  between  those  ISPs  and  cable 
 operators.  Notice,  15  FCC  Rcd  at  19299-  300    30-  31. 
 The  Notice,  in  the  passage  quoted  above,  assumed  that  multiple  ISP  access  would  involve  the  ISP  purchasing  transmission  capability  from  the  cable  operator.  The  comments  herein  and  recent  experience  suggest,  however,  that 


 multiple  ISP  access  would  not  necessarily  involve  a  purchase  of  transmission  capability.  283 
 See,  e.  g.,  Consumer  and  ISP  Representatives  Comments  at  3,  11-  14;  George  Mason  University,  Mercatus  Center,  Regulatory  Studies  Program  Comments  at  4-  5;  New  Hampshire  ISP  Association  Comments  at  7. 


 284  See,  e.  g.,  AT&  T  Comments  at  82;  CIX  Comments  passim  (advocating  some  oversight  by  the  Commission);  New 
 Hampshire  ISP  Association  Reply  Comments  at  2-  5.  285 
 See,  e.  g.,  Brand  X  Internet  Comments  at  3-  4;  LavaNet  Comments  at  2.  286 
 See,  e.  g.,  Consumer  and  ISP  Representatives  Comments  at  3,  6-  10;  Consumers  Union  et  al.  Comments  at  22.  287 
 See,  e.  g.,  ASCENT  Comments  at  13-  18;  Consumers  Union  et  al.  Comments  at  20-  22. 
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 consistent  with  the  FTC  AOL  Time  Warner  Merger  Order.  288  Therefore,  we  ask  that  parties,  in  their  comments,  specify  whether  they  are  addressing  any  form  of  multiple  ISP  access  in  particular  or  all  the 
 forms  that  have  been  proposed.  Commenters  should  also  consider  whether  any  access  requirement  should  specifically  limit  ISP  access  to  uses  related  to  the  offering  of  cable  modem  service,  or  should  explicitly 
 permit  other  uses  by  ISPs. 
 B.  Commission  Authority 
 75.  Federal  courts  have  long  recognized  the  Commissions  authority  to  promulgate  regulations  to  effectuate  the  goals  and  accompanying  provisions  of  the  Act  in  the  absence  of  explicit 


 regulatory  authority,  if  the  regulations  are  reasonably  ancillary  to  existing  Commission  statutory  authority.  289  This  authority  stems  from  several  provisions  of  the  Communications  Act.  Section  1  of  the 
 Act  charges  the  Commission  with  execut[  ing]  and  enforc[  ing]  the  provisions  of  this  Act,  290  provisions  which  extend  to  all  interstate  and  foreign  communication  by  wire  or  radio  .  .  .  and  .  .  .  all  persons 
 engaged  within  the  United  States  in  such  communication."  291  Moreover,  section  4(  i)  provides  that  [  t]  he  Commission  may  perform  any  and  all  acts,  make  such  rules  and  regulations,  and  issue  such  orders,  not 
 inconsistent  with  the  Act,  as  may  be  necessary  in  the  execution  of  its  functions.  292  The  Commissions  authority  pursuant  to  Title  I,  however,  is  not  unrestrained  and  may  only  be  exercised  provided  such 
 action  is  necessary  to  ensure  the  achievement  of  the  Commissions  statutory  responsibilities.  293 
 76.  The  Commission  asserted  ancillary  jurisdiction  over  information  services  (then  called  enhanced  services)  in  the  Computer  Inquiries.  294  Since  then,  it  has  only  exercised  that  authority  in 


 limited  instances.  295  Private  interstate  communications  services  likewise  fall  within  the  Commissions 


 288  See  supra  note  8. 
 289  United  States  v.  Southwestern  Cable  Co.,  392  U.  S.  157,  178  (1968).  See  also  FCC  v.  Midwest  Video  Corp.,  440 
 U.  S.  689  (1979);  United  States  v.  Midwest  Video  Corp.,  406  U.  S.  649  (1972)  (  Midwest  Video);  Promotion  of  Competitive  Networks  in  Local  Telecommunications  Markets,  Wireless  Commun.  Assn  Intl,  Inc.,  Petition  to  Amend 


 Section  1.4000  of  the  Commissions  Rules,  First  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking  in  WT  Docket  No.  99-  217,  Fifth  Report  and  Order  and  Memorandum  Opinion  and  Order  in  CC  Docket  No.  96-  98,  and 
 Fourth  Report  and  Order  and  Memorandum  Opinion  and  Order  in  CC  Docket  No.  88-  57  (  Competitive  Networks),  15  FCC  Rcd  22983,  23028-  29    101  and  n.  261  (2000). 
 290  See  Communications  Act    1,  47  U.  S.  C.    151. 
 291  See  Communications  Act    2(  a),  47  U.  S.  C.    152(  a). 
 292  See  Communications  Act    4(  i),  47  U.  S.  C.    154(  i). 
 293  Midwest  Video,  440  U.  S.  at  706. 
 294  See,  e.  g.,  Computer  II  Final  Decision,  77  FCC2d  at  432  (1980),  affd,  Computer  and  Commun.  Indus.  Assn  v. 
 FCC,  693  F.  2d  198  (D.  C.  Cir.  1982),  cert.  denied,  461  U.  S.  938  (1983).  See  also  Non-  Accounting  Safeguards  Order,  11  FCC  Rcd  at  21955    102  (1996)  (  all  of  the  services  that  the  Commission  has  previously  considered  to  be 


 enhanced  services  are  information  services).  295 
 See,  e.  g.,  Competitive  Networks,  15  FCC  Rcd  at  23029    102,  23042    134  &  n.  318  (asserting  Title  I  jurisdiction  over  customer  premises  antennas  used  for  fixed  wireless  signals);  Implementation  of  Sections  255  and  251(  a)(  2)  of 


 the  Communications  Act  of  1934,  as  Enacted  by  the  Telecommunications  Act  of  1996,  Access  to  Telecommunications  Service,  Telecommunications  Equipment  and  Customer  Premises  Equipment  by  Persons  with 
 Disabilities,  WT  Docket  No.  96-  198,  Report  and  Order  and  Further  Notice  of  Inquiry,  16  FCC  Rcd  6417,  6457    98  (1999)  (asserting  Title  I  jurisdiction  to  regulate  information  services  generally,  whether  provided  by  carriers  or  non-carriers, 
 and  to  impose  disability  access  rules  on  the  offering  of  voicemail  and  interactive  menu  services,  and  related  equipment);  Computer  II  Final  Decision,  77  FCC2d  at  432,  461-  86  (asserting  Title  I  jurisdiction  over 
 enhanced  services  and  imposing  structural  separation  on  AT&  T  provision  of  enhanced  services). 
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 subject  matter  jurisdiction.  296 
 77.  In  the  Wireline  Broadband  NPRM,  the  Commission  tentatively  concluded  that  wireline  broadband  Internet  access  service  is  an  interstate  information  service.  297  Consistent  with  this  tentative 


 conclusion,  we  requested  comment  on  the  extent  to  which  we  should  exercise  our  Title  I  ancillary  jurisdiction  to  regulate  the  provision  of  wireline  broadband  Internet  access  service  by  incumbent  local 
 exchange  carriers.  Given  our  classification  above  of  cable  modem  service  as  an  interstate  information  service,  we  now  seek  comment  on  whether  the  Commission  should  exercise  its  Title  I  authority  here  with 
 regard  to  the  provision  of  cable  modem  service. 
 78.  We  note  that  in  both  proceedings,  we  are  requesting  comment  on  the  extent  to  which  we  should  exercise  Title  I  authority  to  regulate  the  facilities-  based  provision  of  interstate  information 


 services.  We  seek  comment  regarding  how  our  findings  and  decisions  in  one  proceeding  should  impact  the  other.  We  also  request  comment  on  whether  there  are  legal  or  policy  reasons  why  we  should  reach 
 different  conclusions  with  respect  to  wireline  broadband  Internet  access  service  and  cable  modem  service.  Should  any  decision  to  exercise  Title  I  jurisdiction  over  either  service  be  influenced  by  the  cable 
 operators'  current  status  as  the  leading  providers  of  residential  broadband  services? 
 79.  We  seek  comment  on  any  explicit  statutory  provisions,  including  expressions  of  congressional  goals,  that  would  be  furthered  by  the  Commissions  exercise  of  ancillary  jurisdiction  over 


 cable  modem  service.  One  possibility  is  the  Commissions  basic  purpose  "to  make  available,  so  far  as  possible,  to  all  the  people  of  the  United  States  .  .  .  a  rapid,  efficient,  Nation-  wide,  and  world-  wide  wire 
 and  radio  communication  service  with  adequate  facilities  at  reasonable  charges."  298  Other  statutory  grounds  might  include  the  goals  stated  in  section  230(  b)  of  the  Act,  299  the  Title  VI  goal  of  assuring  that 
 cable  communications  provide  and  are  encouraged  to  provide  the  widest  possible  diversity  of  information  sources  and  services  to  the  public,  300  and  section  706  of  the  1996  Act.  301  We  request  comment  on  the 
 use  of  these  or  other  statutory  provisions  as  the  basis  for  our  exercise  of  Title  I  jurisdiction.  We  also  request  comment  on  whether  our  reliance  on  our  ancillary  jurisdiction  in  support  of  these  or  other 
 provisions  would  be  analogous  to  our  reliance  on  ancillary  jurisdiction  in  adoption  of  the  Computer  Inquiry  rules.  In  addition,  given  the  relationship  of  cable  modem  service  (including  the  underlying 
 transmission  component)  to  services  provided  by  wireline  common  carriers,  we  seek  comment  on  whether  there  are  any  additional  bases  for  asserting  ancillary  jurisdiction. 


 296  United  States  v.  Southwestern  Cable  Co.,  392  U.  S.  157  (1968);  Southwestern  Bell  Tel.  Co.  v.  FCC,  19  F.  3d  147 
 (D.  C.  Cir.  1994);  NARUC  II,  supra  note  206.  297 
 Wireline  Broadband  NPRM,  supra  note  12.  298 
 See  Communications  Act    1,  47  U.  S.  C.    151.  299 
 See  Communications  Act    230(  b)  (1,  2)  ,  47  U.  S.  C.    230(  b)  (1,  2)  (including  to  promote  the  continued  development  of  the  Internet  and  other  interactive  computer  services  and  other  interactive  media  and  to  preserve 


 the  vibrant  and  competitive  free  market  that  presently  exists  for  the  Internet  and  other  interactive  computer  services,  unfettered  by  Federal  or  State  regulation). 


 We  have  relied  on    230  for  guidance  in  making  many  decisions.  See,  e.  g.,  FCC  AOL  Time  Warner  Merger  Order,  16  FCC  Rcd  at  6603    128;  Implementation  of  the  Local  Competition  Provisions  of  the  Telecommunications 
 Act  of  1996,  Declaratory  Ruling  in  CC  Docket  No.  96-  98  and  Notice  of  Proposed  Rulemaking  in  Docket  No.  99-  68,  14  FCC  Rcd  3689,  3693    6  (1999);  Access  Charge  Reform,  CC  Docket  No.  96-  262,  First  Report  and  Order,  12 
 FCC  Rcd  15982,  16133    344  (1997);  Notice  of  Proposed  Rulemaking,  Third  Report  and  Order,  and  Notice  of  Inquiry,  11  FCC  Rcd  21354,  21477    282  (1996). 
 300  See  Communications  Act    601(  4),  47  U.  S.  C.    521(  4). 
 301  See  supra  note  14. 
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 80.  The  First  Amendment.  Many  commenters  have  debated  whether  a  federally-  mandated  system  of  multiple  ISP  access  would  violate  the  First  Amendment  rights  of  cable  operators.  302  We  seek 
 comment  on  this  issue  and,  in  particular,  on  the  level  of  First  Amendment  scrutiny  that  would  apply  to  a  federal  multiple  ISP  access  requirement.  Because  the  record  already  contains  comment  on  First 
 Amendment  Constitutional  issues  potentially  raised  by  multiple  ISP  access,  we  ask  commenters  to  update  the  record.  For  example,  has  recent  case  law  303  or  Commission  precedent  304  altered  or  clarified  the  First 
 Amendment  analysis  that  would  be  applicable  to  multiple  ISP  access?  Have  marketplace  conditions  in  the  residential  high-  speed  Internet  access  business  changed  since  the  close  of  the  pleading  cycle  in  ways 
 that  alter  the  First  Amendment  analysis?  Have  trials  and  limited  commercial  offerings  of  different  kinds  of  multiple  ISP  access  shown  that  certain  types  of  access  place  a  minimal  burden  on  the  cable  operators 
 while  achieving  the  maximum  choice  for  subscribers? 
 81.  The  Fifth  Amendment.  Several  commenters  argue  that  multiple  ISP  access  would  constitute  a  per  se  or  regulatory  taking  of  the  cable  operators  property  without  just  compensation 


 under  the  Takings  Clause  of  the  Fifth  Amendment  to  the  U.  S.  Constitution.  305  We  seek  comment  on  this  issue.  If  a  form  of  multiple  ISP  access  did  entail  a  taking,  what  would  be  just  compensation  for  it? 
 Would  ensuring  just  compensation  necessarily  involve  regulators  in  setting  the  price  that  a  cable  operator  charges  unaffiliated  ISPs  (or  vice  versa)?  Or  could  just  compensation  be  ensured  by  some  market-  based 
 process  of  negotiations?  Do  recent  technological  developments,  technical  trials,  and  limited  commercial  offerings  of  multiple  ISP  access  indicate  that  some  forms  of  multiple  ISP  access  minimize  occupation  of 
 the  cable  operators  property  and  economic  harm  to  it?  We  request  comment  on  these  issues. 
 82.  Other  Constitutional  Issues.  We  seek  comment  on  whether  there  are  additional  constitutional  concerns  related  to  multiple  ISP  access  requirements. 


 C.  Marketplace  Developments 
 83.  Since  we  issued  the  Notice,  the  cable  modem  service  marketplace  has  changed  significantly.  As  discussed  above,  the  cable  modem  service  business  is  still  nascent,  and  the  shape  of 


 302  The  First  Amendment  provides  that  Congress  shall  make  no  law  .  .  .  abridging  the  freedom  of  speech,  or  of  the 
 press  .  .  .  U.  S.  Const.  Amend.  I.  Compare  Comcast  Comments  at  26;  Cox  Comments  at  47-  50;  NCTA  Comments  at  38-  39,  NCTA  Reply  Comments  at  3;  Verizon  Comments  at  35-  38  with  Consumers  Union  Comments  at  6-  9; 


 NATOA  Comments  at  18.  See  also  David  Wolitz,  Open  Access  and  the  First  Amendment:  A  Critique  of  Comcast  Cablevision  of  Broward  County,  Inc.  v.  Broward  County,  4  YALE  SYMP.  L.  &  TECH  6  (2001)  (arguing  that  the  First 
 Amendment  does  not  prohibit  multiple  ISP  access  regulations  similar  to  those  promulgated  by  Broward  County  and  litigated  in  Comcast  Cablevision  of  Broward  County,  Inc.  v.  Broward  County,  124  F.  Supp.  2d  685  (S.  D.  Fla. 
 2000));  Harold  Feld,  Whose  Line  Is  It  Anyway?  The  First  Amendment  and  Cable  Open  Access,  8  COMMLAW  CONSPECTUS  23  (2000)  (arguing  that  the  First  Amendment  authorizes  but  does  not  require  the  federal  government 
 and  local  franchise  authorities  to  impose  multiple  ISP  access  conditions  on  cable  operators).  303 
 See,  e.  g.,  Satellite  Broadcasting  &  Commun.  Assn  v.  FCC,  2001  WL  1557809  (4th  Cir.,  Dec.  7,  2001),  affg  146  F.  Supp.  2d  803  (E.  D.  Va.  2001);  Time  Warner  Ent.  Co.  v.  FCC,  240  F.  3d  1126  (D.  C.  Cir.  2001). 


 304  See  Carriage  of  Digital  Television  Broadcast  Signals,  CS  Docket  No.  98-  120,  Local  Broadcast  Signal  Carriage 
 Issues,  CS  Docket  No.  00-  96,  Application  of  Network  Non-  Duplication,  Syndicated  Exclusivity  and  Sports  Blackout  Rules  to  Satellite  Transmission  of  Broadcast  Signals,  CS  Docket  No.  00-  2,  First  Report  and  Order  and  Further 


 Notice  of  Proposed  Rule  Rulemaking,  FCC  01-  22    112-  15  (rel.  Jan.  23,  2001),  available  at  2001  WL  69391  (tentatively  concluding  that  the  mandatory  simultaneous  carriage  of  both  a  television  station's  digital  and  analog 
 signals  may  burden  cable  operators'  First  Amendment  interests  substantially  more  than  is  necessary  to  further  the  legitimate  interests). 
 305  See,  e.  g.,  Charter  Reply  Comments  at  34;  Cox  Comments  at  50-  51.  The  relevant  portion  of  the  Fifth  Amendment 
 provides:    .  .  .  nor  shall  private  property  be  taken  for  public  use,  without  just  compensation.  U.  S.  Const.  Amend.  V. 
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 broadband  deployment  is  not  yet  clear.  Business  relationships  among  cable  operators  and  their  service  offerings  are  evolving.  306  Until  recently,  some  cable  operators  had  exclusive  contracts  with  one  affiliated 
 ISP.  Now,  AOL  Time  Warner,  Comcast  and  AT&  T  have  each  reached  agreements  that  allow  certain  ISPs  access  to  the  cable  operators  system.  As  described  in  detail  above,  307  in  accordance  with  conditions 
 imposed  on  the  AOL  Time  Warner  merger  by  the  FTC,  AOL  Time  Warner  already  is  offering  ISP  choice  to  its  subscribers.  308  Comcast  recently  announced  that  an  unaffiliated  company,  United  Online,  and  its 
 NetZero  and  Juno  Internet  services  would  be  available  as  part  of  Comcasts  cable  modem  service.  309  Comcast  also  appears  to  have  reached  a  conditional  agreement  with  Microsoft  to  provide  MSN  ISP 
 service  on  non-  discriminatory  terms.  310  AT&  T  has  announced  that  it  plans  to  deploy  multiple-  ISP  service  commercially  in  several  major  markets  by  mid-  2002  and  that  EarthLink  will  be  included  in  its  cable 
 modem  service  in  certain  cities.  311  Finally,  Cox  is  conducting  technical  trials  of  multiple  ISP  access.  312 
 84.  We  ask  that  commenters  refresh  the  record  on  these  points,  and  we  intend  to  monitor  the  industry  closely.  We  seek  comment  in  particular  on  whether  the  commercial  relationships  and  trials 


 discussed  above  demonstrate  that  the  market  will  provide  consumers  a  choice  of  ISPs  without  government  intervention,  or  whether  the  absence  of  widespread  business  arrangements  raises  a  level  of  concern 
 sufficient  to  warrant  Commission  action.  If  parties  believe  that  Commission  intervention  is  necessary,  we  ask  that  they  describe  in  detail  what  sort  of  regulations  we  should  impose.  We  also  request  comment 
 regarding  whether  any  decision  we  make  about  multiple  access  requirements  for  cable  systems  in  this  proceeding  should  apply  to  Open  Video  Systems.  313 


 85.  In  considering  multiple  ISP  access  requirements,  we  will  seek  to  promote  the  goals  set  forth  in  paragraphs  4-  6  above.  We  seek  comment  regarding  whether,  in  current  and  likely  future  market 
 conditions,  any  form  of  multiple  ISP  access  is  needed  to  promote  those  goals.  For  example,  would  a  multiple  ISP  access  mandate  promote  deployment  of  advanced  telecommunications  capability;  spur 
 investment  in  facilities  to  provide  high-  speed  Internet  access  service  and  innovation  among  service  providers,  ISPs,  and  creators  of  content;  and/  or  facilitate  intramodal  or  intermodal  competition?  314  Or 
 would  it  have  the  opposite  effects?  Moreover,  we  seek  comment  on  whether  the  Commissions  decisionmaking  should  be  guided  by  principles  which  embrace  intramodal  competition.  If  so,  we  seek 
 comment  on  whether  the  market  can  or  will  satisfy  these  principles  or  whether  some  form  of  multiple  ISP  access  regime  for  cable  systems  is  needed  to  do  so.  To  what  extent  should  our  decision  regarding  multiple 
 ISP  access  requirements  be  influenced  by  the  desirability  of  regulatory  parity,    namely  the  presence  or  absence  of  multiple  ISP  access  regimes  for  other  technologies  (such  as  wireline,  terrestrial  wireless,  and 


 306  See  supra  paras.  20-  29. 
 307  See  supra  para.  26. 
 308  See  supra  note  8. 
 309  Comcast,  Comcast  and  United  Online  to  Offer  NetZero  and  Juno  High-  Speed  Internet  Service  (press  release), 
 Feb.  26,  2002.  310 
 AT&  T  Comcast  Corp.,  SEC  Filing  S-  4,  Feb.  11,  2002  (containing  Exchange  Agreement  dated  as  of  Dec.  7,  2001,  between  Microsoft  Corp.  and  Comcast  Corp). 


 311  See  supra  note  120. 
 312  See  supra  note  124. 
 313  Communications  Act    651,  653,  47  U.  S.  C.    571,  573. 
 314  In  this  context,  we  refer  to  "intramodal"  competition  as  competition  among  providers  using  the  same  type  of 
 facilities  (e.  g.,  incumbent  and  competitive  Local  Exchange  Carriers  (  LECs),  cable  operators  and  overbuilders).  "Intermodal"  competition  is  competition  among  providers  using  different  types  of  facilities  (e.  g.,  LECs  and  cable 


 operators). 
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 satellite)  that  offer  residential  high-  speed  Internet  access  service?  315  To  what  extent  should  that  decision  be  impacted  by  cable  operators  current  status  as  the  leading  providers  of  residential  broadband  services? 
 86.  Consumer  Demand.  If  there  is  a  demand  for  access  to  several  ISPs,  is  that  demand  being  met  today?  Specifically,  does  click  through  access  to  any  ISP  and  content  on  the  World  Wide  Web 
 produce  the  same,  or  almost  the  same,  value  that  a  regulatory  system  of  multiple  ISP  access  would  produce?  Is  any  cable  operator  or  ISP  denying,  or  likely  to  deny,  click  through  access? 


 87.  We  note  that  we  are  unaware  of  any  allegation  that  a  cable  operator  has  denied  click  through  access  to  other  ISPs  Moreover,  although  it  is  technically  feasible  for  a  cable  operator  to  deny 
 access  to  unaffiliated  content,  or  to  relegate  unaffiliated  content  to  the  slow  lane  of  its  residential  high-speed  Internet  access  service,  we  are  unaware  of  a  single  allegation  that  a  cable  operator  has  done  so.  316  Is 
 the  threat  that  subscriber  access  to  Internet  content  or  services  could  be  blocked  or  impaired,  as  compared  to  content  or  services  provided  by  the  cable  operator  or  its  affiliate,  sufficient  to  justify  regulatory 
 intervention  at  this  time? 
 88.  Cost/  Benefit  Analysis.  We  request  comment  on  the  costs  that  a  multiple  ISP  access  mandate  would  impose  on  cable  operators  and  on  the  benefits  that  a  mandate  would  bring  to  consumers. 


 Would  some  forms  of  multiple  ISP  access  be  less  costly  to  cable  operators  317  and  more  beneficial  to  consumers  than  others?  Is  the  cost/  benefit  calculation  for  multiple  ISP  access  different  for  small  cable 
 operators  than  it  is  for  others?  Would  the  requirements  imposed  on  telecommunications  carriers  by  our  Second  or  Third  Computer  Inquiries  318  provide  a  useful  model  for  a  multiple  ISP  access  regime?  Would 
 the  new  forms  of  multiple  ISP  access  that  are  being  deployed  or  are  under  consideration  by  cable  operators,  such  as  the  model  being  implemented  by  AOL  Time  Warner  pursuant  to  the  FTC  AOL  Time 
 Warner  Merger  Order,  319  provide  useful  models?  Other  possible  means  of  effecting  a  multiple  ISP  access  regime  include  adopting  a  general  rule  of  reasonableness  for  cable  operators  in  their  dealings  with  ISPs 
 seeking  access  to  their  cable  systems  and/  or  requiring  cable  operators  to  make  high-  speed  transmission  available  to  other  ISPs  at  market-  based  prices.  320  We  could  then  rely  on  our  complaint  processes  to 
 resolve  individual  disputes  about  these  standards.  Would  such  a  system  of  general  principles  and  case-by-  case  adjudication  achieve  our  goals  in  a  timely  and  cost-  effective  manner? 


 315  See  Wireline  Broadband  NPRM,  supra  note  12,  at    6  (  the  Commission  will  strive  to  develop  an  analytical 
 framework  that  is  consistent,  to  the  extent  possible,  across  multiple  platforms).  316 
 See  Adelphia  Reply  Comments  at  7  n.  23  (stating  that  Adelphia  is  not  aware  of  a  single  allegation  in  the  comments  that  Adelphia,  or  any  other  operator,  has  actually  engaged  in  any  activity  designed  to  relegate  certain 


 sites  to  the  slow  lane.  Indeed,  .  .  .  the  capability  to  engage  in  the  posited  behavior  exists  in  any  ISP.);  Comcast  Comments  at  31  (opining  that  the  openness  that  really  matters  to  customers    and  what  makes  the  Internet  so 
 special  and  remarkable    is  the  ability  to  go  anywhere,  to  access  any  information  with  a  single  click  of  a  mouse.  That  openness  exists  with  cable  Internet  today.);  Cox  Comments  at  19  (stating  that  once  connected  [to  the 
 Internet],  moreover,  [consumers]  are  able  to  visit  any  website  and  access  any  information  (or  ISP)  they  desire).  The  Center  for  Democracy  and  Technology,  a  proponent  of  multiple  ISP  access  that  conducted  a  large  study  of  the 
 broadband  business,  concluded  only  that  there  was  a  theoretical  but  cognizable  risk  of  content  censorship  in  the  absence  of  mandated  open  access.  Center  for  Democracy  and  Technology  Comments  at  5  (italics  added). 
 317  We  are  struck  by  the  complexity  of  the  proposals  for  multiple  ISP  access  advocated  by  some  commenters.  See 
 supra  notes  283-  287.  See  also  AT&  T  Reply  Comments  at  17-  26;  Big  Planet  Comments  at  14;  Center  for  Democracy  &  Technology  Comments  at  16-  18;  Charter  Reply  Comments  at  33-  36. 


 318  See  supra  note  29. 
 319  See  supra  note  8. 
 320  See  Wireline  Broadband  NPRM,  supra  note  12,  at    50. 
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 89.  What  lessons,  if  any,  do  trials  and  current  commercial  offerings  of  multiple  ISP  access  321  reveal  about  the  costs  and  benefits  of  multiple  ISP  access  and  how  such  costs  and  benefits  can  be 
 balanced?  Has  recent  experience  with  the  addition  of  source-  based  routers,  described  in  paragraph  15  above,  showed  that  technology  to  be  an  efficient  form  of  multiple  ISP  access? 


 90.  What  would  be  the  costs  of  regulatory  enforcement  of  a  multiple  ISP  access  mandate?  Would  a  multiple  ISP  access  mandate  lead  to  significant  opportunities  for  regulatory  arbitrage  -- 
 businesses  making  decisions  based  on  regulatory  classifications  rather  than  on  customers'  preferences  and  innovative  and  sustainable  business  plans?  Would  a  multiple  ISP  access  mandate  impose  long  term  costs 
 on  the  market?  In  light  of  the  new  and  fast-  changing  nature  of  the  residential  high-  speed  Internet  access  business,  would  a  multiple  ISP  access  requirement,  imposed  at  this  time,  hinder  the  development  of  a 
 market  that  is  still  evolving?  322  In  particular,  might  a  requirement  preclude  the  discovery  of  network  design,  content,  applications,  and  business  models  that  would  otherwise  enjoy  widespread  adoption  and 
 enhance  long-  term  consumer  welfare?  323  Is  there  a  way  to  implement  multiple  ISP  access  now  that  would  avoid  any  such  harmful  interference  in  the  future  and  that  would  achieve  the  goals  we  set  forth  in 
 paragraphs  4-  6  above?  If  we  adopt  a  multiple  ISP  access  mandate  for  cable  systems  generally,  should  we  exempt  small  cable  systems  from  such  a  mandate  because  of  the  particular  conditions  that  they  face? 


 91.  We  recognize  that  much  comment  has  already  been  provided  regarding  these  issues,  in  this  proceeding  and  others.  Accordingly,  we  are  particularly  interested  in  comments  that  provide  updated 
 information  and  discuss  relevant  regulatory  and  judicial  decisions  issued  since  the  comment  period  closed  in  this  proceeding.  We  are  likely  to  find  particularly  relevant  and  persuasive  empirically  supported 
 studies  that  use  well-  established  methods  for  quantifying  benefits  and  harms,  as  well  as  comments  based  on  well-  established  economic  theory. 


 92.  Changing  Market  Conditions.  If  we  ultimately  conclude  not  to  impose  multiple  ISP  access  at  this  time,  what,  if  any,  future  events  should  lead  us  to  do  so?  Are  there  market  conditions  that 
 are  not  currently  pervasive  but,  should  they  become  pervasive,  would  suggest  the  need  for  a  multiple  ISP  access  mandate  in  the  future?  324  Would  these  conditions  include  the  acquisition  of  market  power  by  cable 
 operators  in  providing  residential  high-  speed  Internet  access,  cable  operators  refusals  to  satisfy  subscriber  demand  for  multiple  ISP  access,  or  the  evolution  of  a  mature  market  for  residential  high-  speed 
 Internet  access?  Would  a  finding  that  subscriber  access  to  Internet  content  or  services  may  be  blocked  or  impaired,  as  compared  to  other  content  or  services,  particularly  that  provided  by  the  cable  operator  or  its 
 affiliate,  support  regulatory  intervention?  We  seek  comment  on  other  conditions  that  would  suggest  regulation  is  needed  and  on  objective,  readily  measurable  criteria  by  which  we  could  detect  the 
 occurrence  of  such  conditions.  Is  ongoing  monitoring  appropriate  to  ensure  that  any  relevant  conditions  are  detected  accurately  and  in  a  timely  manner  and,  if  so,  what  type  of  monitoring? 


 93.  We  also  seek  comment  on  indicia  that  a  cable  operator  is  offering  a  telecommunications 


 321  See  supra  paras.  26-  29. 
 322  Adelphia  Reply  Comments  at  10-  11  (listing  unresolved  technical  issues  in  multiple  ISP  access). 
 323  See  also  AeA  Comments  at  11  (stating  that  agreements,  which  reflect  commercial  reality,  are  preferable  to  the 
 imposition  of  a  one-  size  fits  all  common  carrier  approach);  Comcast  Comments  at  38  (noting  the  uncertainty  about  how  many  subscribers  will  place  the  greatest  value  on  ease  of  searching,  instant  messaging  capabilities,  vast 


 amounts  of  proprietary  content,  backbone  capacity,  or  filtering  out  offensive  content);  NCTA  Comments  at  63-  64  (same).  See  also  Universal  Service  Report,  13  FCC  Rcd  at  11524    46,  11540    82. 
 324  As  previously  noted,  the  FTC  and  this  Commission  have  separately  analyzed  the  question  of  whether  the  AOL 
 Time  Warner  merger  created  market  conditions  warranting  intervention  applicable  to  the  merged  firm.  See  supra  note  8. 
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 service  325  or  private  carrier  service,  on  a  stand-  alone  basis,  to  ISPs  or  subscribers.  Such  an  offering  might  provide  the  Commission  with  grounds,  respectively,  for  common  carriage  regulation  or  exercise  of 
 its  ancillary  authority.  How  might  we  detect  that  a  cable  operator  is,  in  fact,  making  such  an  offering?  If  and  when  a  cable  operator  makes  such  an  offering,  what,  if  any,  access  requirements  should  the 
 Commission  impose  on  it?  For  example,  if  we  found  that  a  cable  operator  were  making  such  an  offering,  would  that  trigger  the  requirements  of  Computer  II  and  III  with  respect  to  the  retail  offering  of  cable 
 modem  service  to  subscribers  or  make  their  application  in  the  public  interest?  326  To  what  extent  should  these  decisions  impact,  or  be  impacted  by,  the  conclusions  we  make  in  our  Wireline  Broadband  NPRM 
 proceeding?  We  note  that  providers  of  individually  negotiated  private  carriage  may  begin  to  make  standard  offerings  of  transmission  service  to  the  general  public,  so  that  the  service  becomes  a 
 telecommunications  service  within  the  meaning  of  the  Act.  We  seek  comment  on  the  appropriate  scope  of  regulation  of  any  such  offerings.  We  also  seek  comment  on  whether  it  would  be  appropriate  to  forbear 
 from  particular  Title  II  obligations  in  these  circumstances.  327 
 94.  Forbearance  from  Telecommunications  Service  Obligations.  As  noted  above,  the  U.  S.  District  Court  for  the  Southern  District  of  California  has  expressed  its  view  that  it  is  bound  by  the  Ninth 


 Circuits  Portland  decision  with  regard  to  the  classification  of  cable  modem  service.  328  The  court  noted,  however,  that  the  Ninth  Circuit  left  open  the  question  whether  the  Commission  would  exercise  its 
 forbearance  authority  to  remove  any  telecommunications  service  regulations  from  the  provision  of  cable  modem  service.  Further,  the  district  court  stayed  its  proceedings  pending  the  resolution  of  the  FCCs 
 NOI  proceeding  to  determine  whether  the  Commission  will  forbear  in  this  circumstance.  329  We  note  that  the  NOI  remains  open,  and  we  address  the  issue  of  forbearance  here. 


 95.  To  the  extent  that  cable  modem  service  may  be  subject  to  telecommunications  service  classification,  we  seek  comment  on  whether  we  should  forbear  from  applying  each  provision  of  Title  II  or 
 common  carrier  regulation.  330  We  invite  comment  on  whether  enforcement  of  such  provisions  is  not  necessary  to  ensure  that  the  charges,  practices,  classification  or  regulations  in  connection  with  cable 
 modem  service  are  just  and  reasonable  and  not  unjustly  or  unreasonably  discriminatory.  Is  enforcement  not  necessary  for  the  protection  of  consumers?  Would  forbearance  be  consistent  with  the  public  interest? 
 We  tentatively  conclude  that  such  forbearance  would  be  justified.  As  an  initial  matter,  we  note  our  determination  that  cable  modem  service,  as  described  in  the  record,  is  appropriately  classified  as  an 
 information  service  and  does  not  contain  a  distinct  telecommunications  service.  331  The  Commission  has  a  long  history  of  classifying  information  services  as  Title  I  services  and  thus  not  subject  to  the  obligations 
 and  requirements  imposed  on  services  subject  to  Title  II.  332  Given  that  cable  modem  service  will  be  treated  as  an  information  service  in  most  of  the  country,  we  tentatively  conclude  that  the  public  interest 
 would  be  served  by  the  uniform  national  policy  that  would  result  from  the  exercise  of  forbearance  to  the  extent  cable  modem  service  is  classified  as  a  telecommunications  service.  We  also  believe  that 
 forbearance  would  be  in  the  public  interest  because  cable  modem  service  is  still  in  its  early  stages;  supply  and  demand  are  still  evolving;  and  several  rival  networks  providing  residential  high-  speed  Internet  access 


 325  Communications  Act    3(  46),  47  U.  S.  C.    3(  46). 
 326  See  supra  paras.  42-  43. 
 327  Communications  Act    10,  47  U.  S.  C.    160. 
 328  See  supra  note  219. 
 329  GTE.  Net  LLC  v.  Cox  Commun.,  Inc.,  Case  No.  00-  CV-  2289-  J  (BEN),  Order  Granting  Motion  to  Stay  and 
 Denying  Motion  to  Dismiss,  slip.  op.  at  10  (Jan.  29,  2002).  330 
 Communications  Act    10,  47  U.  S.  C.    160.  331 
 See  supra  paras.  38  39.  332 
 See  authorities  cited  supra  note  139. 
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 are  still  developing.  For  these  same  reasons  we  tentatively  conclude  that  enforcement  of  Title  II  provisions  and  common  carrier  regulation  is  not  necessary  for  the  protection  of  consumers  or  to  ensure 
 that  rates  are  just  and  reasonable  and  not  unjustly  or  unreasonably  discriminatory.  As  such,  we  believe  that  forbearance  from  the  requirements  of  Title  II  and  common  carrier  regulation  is  appropriate  in  this 
 circumstance.  We  request  comment  on  this  analysis.  Again,  we  request  that  commenters  focus  on  how  such  forbearance  and/  or  regulation  would  further  the  Commissions  goals,  stated  in  paragraphs  4-  6  above. 


 D.  Consequences  Of  Legal  Classification  As  Information  Service 
 1.  State  and  Local  Regulation  of  Cable  Modem  Service  and  Rights-  Of-  Way. 
 96.  As  discussed  above,  cable  modem  service  is  an  interstate  information  service  within  the  scope  of  our  jurisdiction  over  interstate  and  foreign  communications.  333  We  recognize,  however,  that  it  is 


 provided  over  the  facilities  of  cable  systems  that  occupy  public  rights-  of-  way  in  local  communities.  In  order  to  facilitate  our  national  policy  goals,  we  seek  to  clarify  the  authority  of  State  and  local 
 governments  with  respect  to  cable  modem  service. 
 97.  By  addressing  the  classification  issues  in  the  accompanying  Declaratory  Ruling,  we  seek  to  remove  regulatory  uncertainty  that  may  discourage  investment  and  innovation  in  broadband  services 


 and  facilities.  In  this  part  of  the  Notice  of  Proposed  Rulemaking,  we  address  potential  areas  of  regulatory  uncertainty  at  the  State  and  local  levels  that  could  also  discourage  such  investment  and  innovation.  We 
 would  be  concerned  if  a  patchwork  of  State  and  local  regulations  beyond  matters  of  purely  local  concern  resulted  in  inconsistent  requirements  affecting  cable  modem  service,  the  technical  design  of  the  cable 
 modem  service  facilities,  or  business  arrangements  that  discouraged  cable  modem  service  deployment  across  political  boundaries.  We  also  would  be  concerned  if  State  and  local  regulations  limited  the 
 Commissions  ability  to  achieve  its  national  broadband  policy  goals  to  promote  the  deployment  of  advanced  telecommunications  capability  to  all  Americans  in  a  reasonable  and  timely  manner,  to 
 promote  the  continued  development  of  the  Internet  and  other  interactive  computer  services  and  other  interactive  media  and  to  preserve  the  vibrant  and  competitive  free  market  that  presently  exists  for  the 
 Internet  and  other  interactive  computer  services,  unfettered  by  Federal  or  State  regulation.  334 
 98.  Accordingly,  we  seek  comment  regarding  whether  we  should  interpret  the  Commissions  assertion  of  jurisdiction  under  the  Communications  Act  to  preclude  State  and  local  authorities  from 


 regulating  cable  modem  service  and  facilities  in  particular  ways.  335  We  note  that  the  courts  have  recognized  the  Commissions  authority  under  Title  I  to  preempt  non-  Federal  regulations  that  negate  the 
 Commissions  goals,  including  regulations  affecting  enhanced  services.  336  We  seek  comment  as  to  any  additional  basis  for  preempting  such  regulations.  For  example,  does  section  624(  b)  provide  preemptive 
 authority?  Section  624(  b)  states  that  a  franchising  authority  may  not  .  .  .  establish  requirements  for  .  .  .  other  information  services.  337 


 99.  Below  we  address  three  specific  types  of  local  requirements  that  may  be  affected  by  our 
 333  See  Communications  Act    2(  a),  47  U.  S.  C.    152(  a). 
 334  See  47  U.  S.  C.    157  note,  230(  b)(  1),  (2). 
 335  See  supra  Section  IV.  B.  See  generally  LSGAC  Advisory  Recommendation  No.  26,  at  2-  3  (Title  VI  provides 
 local  governments  with  sufficient  authority  to  address  competition  between  affiliated  and  unaffiliated  content  providers,  play  a  meaningful  role  in  overseeing  the  deployment  of  advanced  cable  services,  and  ensure  that 


 providers  of  advanced  services  address  local  and  specific  community  needs  and  interests).  336 
 See  California  v.  FCC,  39  F.  3d  919,  931-  33  (9  th  Cir.  1994);  Computer  and  Communications  Industry  Assn  v.  FCC,  693  F.  2d  198,  214-  218  (D.  C.  Cir.  1982),  cert.  denied,  461  U.  S.  938  (1983). 


 337  47  U.  S.  C.    544(  b)(  1). 
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 determination  that  cable  modem  service  is  an  interstate  information  service:  access  requirements,  franchise  requirements,  and  franchise  fees.  However,  we  also  request  comment  on  any  other  forms  of 
 State  and  local  regulation  that  would  limit  the  Commissions  ability  to  achieve  its  national  broadband  policy,  discourage  investment  in  advanced  communications  facilities,  or  create  an  unpredictable 
 regulatory  environment.  Specifically,  we  seek  comment  as  to  whether  we  should  use  our  preemption  authority  to  preempt  specific  state  laws  or  local  regulations.  We  ask  commenters  to  specify  what 
 preemption  authority  we  would  rely  on  in  each  case. 
 100.  Access  Requirements.  For  the  most  part,  States  and  localities  that  have  considered  imposing  access  requirements  have  done  so  in  the  context  of  their  Title  VI  authority  to  review  cable 


 franchise  transfers.  338  In  light  of  our  conclusion  that  cable  modem  service  is  an  interstate  information  service,  we  seek  comment  on  any  regulatory  authority  that  State  and  local  governments  may  have  with 
 respect  to  cable  modem  service  as  an  information  service,  including  any  authority  to  impose  multiple  ISP  access  requirements  or  to  prohibit,  limit,  restrict,  or  condition  the  provision  of  cable  modem  service.  Is 
 such  regulation  consistent  with  any  exercise  of  our  jurisdiction  over  cable  modem  service  under  Title  I,  including  any  affirmative  decision  we  might  make  to  refrain  from  imposing  specific  regulatory 
 requirements? 
 101.  Rights-  of-  Way  and  Franchising  Issues.  The  Commission  has  long  recognized  the  important  responsibility  of  local  and  State  governments  to  manage  rights-  of-  way.  339  Indeed,  Congress  in 


 1984  sought  to  establish  franchise  procedures  and  standards  which  encourage  growth  and  development  of  cable  systems  and  which  assure  that  cable  systems  are  responsive  to  the  needs  and  interests  of  the  local 
 community,  and  to  establish  guidelines  for  the  exercise  of  Federal,  State,  and  local  authority  with  respect  to  the  regulation  of  cable  systems.  340 


 102.  We  request  comment  on  how  our  classification  of  cable  modem  service  as  an  interstate  information  service  impacts  rights-  of-  way  and  franchising  issues.  We  note  that  section  621  authorizes 
 local  franchising  authorities  to  require  cable  operators  to  obtain  a  franchise  to  construct  a  cable  system 
 338  See  Communications  Act    613(  d),  617,  47  U.  S.  C.    533(  d),  537.  Access  conditions  imposed  by  Portland  and 
 Multnomah  County,  Oregon  and  Henrico  County,  Virginia  were  overturned  pursuant  to  section  621(  b),  47  U.  S.  C.    541(  b)  as  beyond  the  franchisors  Title  VI  authority.  See  MediaOne  Group,  Inc.  v.  County  of  Henrico  (  Henrico 


 County),  257  F.  3d  356,  363-  64  (4  th  Cir.  2001)  (access  requirement  compelling  the  cable  operator  to  offer  the  platform  separately  for  the  use  of  unaffiliated  ISPs  impermissibly  required  the  cable  operator  to  provide 
 telecommunications  facilities);  Portland,  216  F.  3d  at  877-  880  (the  transport  function  of  cable  modem  service  was  a  separate  telecommunications  service,  which  could  not  be  addressed  pursuant  to  cable  franchising  authority  conferred 
 by  Title  VI).  A  Broward  County,  Florida  ordinance  requiring  all  cable  operators  offering  cable  modem  service  to  provide  open  access  was  overturned  based  on  First  Amendment  considerations  and  was  withdrawn  in  a  subsequent 
 settlement  agreement.  See  Comcast  Cablevision  of  Broward  County,  Inc.  v.  Broward  County,  124  F.  Supp.  2d  685  (S.  D.  Fla.  2000);  Broward  County  Settles  Open  Access  Lawsuit  with  AT&  T,  Comcast,  COMMUNICATIONS  DAILY, 
 April  17,  2001.  In  other  cases,  franchising  authorities  considering  multiple  ISP  access  requirements  determined  that  present  and  future  competition  for  broadband  Internet  services  obviated  the  need  for  a  mandatory  access 
 requirement.  See  supra  note  9.  As  discussed  supra  para.  26,  several  cable  operators  have  announced  their  intentions  to  accommodate  multiple  ISPs. 
 339  See  Communications  Act    253(  c),  47  U.  S.  C.    253(  c)  (preserving  for  State  and  local  governments  authority  over 
 rights-  of-  way);  Communications  Act    602(  7)(  B),  47  U.  S.  C.    522(  7)(  B)  (excluding  from  definition  of  cable  system  subject  to  franchising  authority  a  facility  that  serves  subscribers  without  using  any  public  right-  of-  way);  TCI 


 Cablevision  of  Oakland  County,  Inc.,  Petition  for  Declaratory  Ruling,  Preemption  and  Other  Relief  Pursuant  to  47  U.  S.  C.    541,  544(  e),  and  253,  CSR-  4790,  Memorandum  Opinion  and  Order  (  Troy  Decision),  12  FCC  Rcd 
 21396,  21441-  42  (1997),  reconsideration  denied,  (  Troy  Reconsideration  Order)  13  FCC  Rcd  16400,  16414    43  (1998);  Definition  of  a  Cable  Television  System,  MM  Docket  No.  89-  35,  Report  and  Order,  5  FCC  Rcd  7638,  7639   
 10  (1990).  340 
 Communications  Act    601(  2)-(  3),  47  U.  S.  C.  521(  2)-(  3). 
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 over  public  rights-  of-  way.  341  Once  a  cable  operator  has  obtained  a  franchise  for  such  a  system,  our  information  service  classification  should  not  affect  the  right  of  cable  operators  to  access  rights-  of-  way  as 
 necessary  to  provide  cable  modem  service  or  to  use  their  previously  franchised  systems  to  provide  cable  modem  service.  We  seek  comment  on  this  tentative  conclusion.  We  also  seek  comment  on  whether 
 providing  additional  services  over  upgraded  cable  facilities  imposes  additional  burdens  on  the  public  rights-  of-  way  such  that  the  existing  franchise  process  is  inadequate.  If  so,  does  Title  VI  nevertheless 
 preclude  local  franchising  authorities  from  imposing  additional  requirements  on  cable  modem  service?  We  note  that  section  624(  b)  provides  that,  in  a  request  for  proposals  for  a  franchise  or  franchise  renewal,  a 
 franchising  authority  may  not  .  .  .  establish  requirements  for  video  programming  or  other  information  services.  342  Furthermore,  section  624(  a)  provides  that  [  a]  ny  franchising  authority  may  not  regulate  the 
 services,  facilities,  and  equipment  provided  by  a  cable  operator  except  to  the  extent  consistent  with  this  title.  343  Based  on  the  foregoing,  we  tentatively  conclude  that  Title  VI  does  not  provide  a  basis  for  a  local 
 franchising  authority  to  impose  an  additional  franchise  on  a  cable  operator  that  provides  cable  modem  service. 


 103.  We  also  seek  comment  generally  on  the  scope  of  local  franchising  authority  over  facilities-  based  providers  of  information  services.  Do  State  statutes  and  constitutional  provisions 
 authorizing  local  franchising  in  terms  of  utility  services  generally,  or  cable  and  telecommunications  networks  and  services  specifically,  authorize  localities  to  franchise  providers  of  information  service  under 
 existing  law?  If  so,  is  there  any  basis  for  treating  facilities-  based  providers  of  information  services  differently  based  on  the  facilities  used? 


 104.  As  the  Commission  has  previously  stated,  we  believe  that  administration  of  the  public  rights-  of-  way  should  not  be  used  to  undermine  efforts  of  either  cable  or  telecommunications  providers  to 
 upgrade  or  build  new  facilities  to  provide  a  broad  array  of  new  communications  services.  344  We  expect  that  State  and  local  governments  share  this  view  and  will  work  to  facilitate  the  deployment  of  broadband 
 services  in  their  communities.  The  Commission  has  previously  expressed  concern  about  unnecessary  regulation  at  the  local  level  that  extends  far  beyond  local  government  interests  in  managing  the  public 
 rights-  of-  way,  345  and  about  the  discriminatory  application  of  regulation  at  the  State  and  local  levels.  346  We  are  concerned  that  State  or  local  regulation  beyond  that  necessary  to  manage  rights-  of-  way  could  impede 
 competition  and  impose  unnecessary  delays  and  costs  on  the  development  of  new  broadband  services.  Some  commenters  have  raised  questions  about  potential  State  and  local  actions  that  could  restrict  entry, 
 impose  access  or  other  requirements  on  cable  modem  service,  or  assess  fees  or  taxes  on  cable  Internet  service.  347  We  seek  comment  on  these  issues. 


 105.  Franchising  authorities  have  expressed  concern  that  their  rights  to  collect  franchise  fees 
 341  47  U.  S.  C.  541(  a)(  2). 
 342  47  U.  S.  C.    544(  b)(  1).  See  1984  House  Report  at  68,  1984  U.  S.  C.  C.  A.  N.  at  4705. 
 343  47  U.  S.  C.    544(  a). 
 344  Troy  Decision,  12  FCC  Rcd  at  21429    78  (conditions  imposed  on  grant  of  construction  permits  for  cable  system 
 upgrades  limiting  use  of  the  system  for  telecommunications  services  were  found  to  violate    621(  b)(  3)(  B)).  345 
 See  generally  Troy  Decision,  12  FCC  Rcd  at  21440-  41    102;  Promotion  of  Competitive  Networks  in  Local  Telecommunications  Markets,  14  FCC  Rcd  12673,  12714-  15  (1999). 


 346  See  Troy  Decision,  12  FCC  Rcd  at  21442    107. 
 347  Comcast  Comments  at  41;  CCTA  Reply  Comments  at  4-  11  (citing  to  local  franchising  authority  and  State 
 government  attempts  to  impose  access  and  other  requirements  on  cable  modem  service,  and  expressing  concern  that  some  cities  will  seek  to  expand  their  jurisdiction  over  cable  modem  service  generally  and  that  competitors  will 


 leverage  the  local  regulatory  process  to  seek  access  requirements,  or  customer  service  or  technical  standards  underwritten  by  competitors). 
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 on  cable  modem  service  for  the  use  of  public  rights-  of-  way  would  be  affected  if  we  were  to  find  that  cable  modem  service  is  not  a  cable  service.  348  We  note  that  section  622(  b)  provides  that  the  franchise 
 fees  paid  by  a  cable  operator  with  respect  to  any  cable  system  shall  not  exceed  5  percent  of  such  cable  operators  gross  revenues  derived  .  .  .  from  the  operation  of  the  cable  system  to  provide  cable  services.  349 
 Given  that  we  have  found  cable  modem  service  to  be  an  information  service,  revenue  from  cable  modem  service  would  not  be  included  in  the  calculation  of  gross  revenues  from  which  the  franchise  fee  ceiling  is 
 determined.  Furthermore,  we  tentatively  conclude  that  Title  VI  does  not  provide  an  independent  basis  of  authority  for  assessing  franchise  fees  on  cable  modem  service.  We  seek  comment  on  this  issue.  We  also 
 note  Congress  concern  regarding  new  taxes  on  Internet  access  imposed  for  the  purpose  of  generating  revenues  when  no  specific  privilege,  service,  or  benefit  is  conferred  and  its  concern  regarding  multiple  or 
 discriminatory  taxes  on  electronic  commerce.  350 
 106.  Franchise  Fees  Previously  Paid  Pursuant  to  Section  622.  Cable  operators  have  expressed  concern  that  any  determination  by  the  Commission,  other  than  a  finding  that  cable  modem 


 service  falls  within  the  classification  of  cable  service,  will  potentially  expose  cable  operators  to  refund  liability  for  franchise  fees  previously  paid  to  localities  and  collected  from  subscribers  based  on  cable 
 modem  service  revenues.  351  We  understand  that  some  cable  operators,  believing  they  were  legitimately  carrying  out  their  obligations  and  rights  under  Title  VI  of  the  Act  and  local  franchise  agreements, 
 collected  franchise  fees  based  on  cable  modem  service  revenues,  identified  these  fees  on  subscriber  bills,  and  remitted  these  franchise  fees  to  local  franchising  authorities  pursuant  to  the  terms  of  their  franchising 
 agreements.  In  light  of  the  Ninth  Circuits  decision  that  cable  modem  service  is  not  a  cable  service,  some  cable  operators  have  suspended  collecting  and  remitting  franchise  fees  for  revenues  from  cable 
 modem  service  in  Ninth  Circuit  States  out  of  concern  about  their  exposure  to  significant  litigation  risk  if  they  were  to  continue  collecting  a  franchise  fee  on  cable  modem  service.  352  We  understand  that 
 subscribers  in  other  jurisdictions  have  raised  the  issue  of  whether  franchise  fees  were  lawfully  collected 
 348  See  National  League  of  Cities,  et  al.  Comments  at  13  (  the  cost  .  .  .  in  lost  franchise  fees  would  be  staggering); 
 Marin  Comments  at  7  ([  t]  he  failure  to  classify  cable  modem  service  as  a  cable  service  will  have  very  adverse  financial  and  regulatory  consequences  for  public  agencies);  New  Orleans  Comments  at  4,  10  (cable  modem  service 


 is  a  cable  service  and  cable  operators  must  pay  franchise  fees  on  revenues  from  this  service);  NATOA  Comments  at  22  (local  authority  to  manage  and  receive  compensation  for  access  to  public  rights-  of-  way  is  recognized  in  the 
 Communications  Act);  NATOA  Reply  Comments  at  33-  34  (anticipating  consumer  complaints  regarding  cable  modem  service  and  noting  that  the  Commission  previously  expanded  the  franchise  fee  revenue  base  to  include  pay-per- 
 view  programming,  leased  access,  and  advertising  revenues  largely  because  of  franchise  authority  responsibilities  to  investigate  and  resolve  complaints  about  these  services). 
 349  47  U.  S.  C.    542(  b). 
 350  See  Internet  Tax  Freedom  Act    1101(  a),  1104,  112  Stat.  2681-  719,  2681-  724-  726,  47  U.  S.  C.  A.    151  note.  The 
 Internet  Tax  Freedom  Act  imposed  a  moratorium  on  the  ability  of  State  or  local  governments  to  impose  new  taxes  on  Internet  access.  This  moratorium  has  been  extended  through  November  1,  2003.  Internet  Tax  Nondiscrimination 


 Act,  Pub.  L.  No.  107-  75,  115  Stat.  703  (2001).  Franchise  fees  imposed  pursuant  to  sections  622  and  653  of  the  Communications  Act,  47  U.  S.  C.    542,  573,  for  cable  services  and  open  video  systems,  respectively,  and  any  other 
 fee  related  to  obligations  of  telecommunications  carriers  under  the  Communications  Act  were  not  considered  to  be  taxes  subject  to  the  moratorium.  Internet  Tax  Freedom  Act    1104(  8)(  B). 
 351  See  CCTA  Reply  Comments  at  12-  13  (  both  operators  and  franchise  authorities  find  themselves  caught  in  the 
 middle);  Cox  Reply  Comments  at  2  n.  4;  National  League  of  Cities  Reply  Comments,  Attachment  (Letter  from  Kathi  Noe,  Director,  Government  Affairs,  AT&  T  Broadband,  to  Janet  Freeland,  Senior  Financial  Analyst,  Real 


 Property  Division,  City  of  Palo  Alto,  Cal.  (Dec.  15,  2000))  at  2  (  Suspension  of  franchise  fees  on  @Home  is  particularly  important  in  states  within  the  Ninth  Circuit,  because  of  the  existence  of  State  consumer  protection  laws 
 which  often  give  rise  to  class  action  or  other  litigation.  Such  lawsuits  might  seek  a  refund  of  any  fees  not  lawfully  collected  .  .  .  .);  id.  (Letter  from  Stanford  T.  Inouye,  Area  Franchise  Manager,  AT&  T  Broadband,  to  Pam  Berrian, 
 Franchise  Manager,  City  of  Eugene,  Or.  (Dec.  13,  2000))  (same).  352 
 See,  e.  g.  Cox  Reply  Comments  at  2  &  n.  4. 
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 from  them  and  whether  the  fees  collected  should  be  refunded.  353 
 107.  While  the  Commission  generally  will  not  assert  jurisdiction  over  franchise  fee  disputes  that  concern  matters  of  local  taxation,  the  Commissions  policy  has  been  to  resolve  franchise  fee 


 questions  that  bear  directly  on  a  national  policy  concerning  communications  and  that  call  upon  our  expertise.  354  We  seek  comment  on  whether  disputes  regarding  franchise  fees  based  on  cable  modem 
 service  implicate  such  a  national  policy,  given  that  the  fees  in  question  were  collected  pursuant  to  section  622  and  that  our  classification  decision  will  alter,  on  a  national  scale,  the  regulatory  treatment  of  cable 
 modem  service.  We  seek  comment  on  whether  it  is  appropriate  to  exercise  our  jurisdiction  under  section  622  to  resolve  the  issue  of  previously  collected  franchise  fees  based  on  cable  modem  service  revenues  or 
 whether  these  issues  are  more  appropriately  resolved  by  the  courts.  We  note  that  until  the  release  of  the  Commissions  declaratory  ruling  to  the  contrary,  cable  operators  and  local  franchising  authorities 
 believed  in  good  faith  that  cable  modem  service  was  a  cable  service  for  which  franchise  fees  could  be  collected  pursuant  to  section  622.  As  illustrated  by  the  Fourth  Circuits  statement  in  Henrico  County,  that 
 the  issue  of  the  proper  regulatory  classification  of  cable  modem  service  .  .  .  is  complex  and  subject  to  considerable  debate,  355  cable  operators  and  franchising  authorities  could  not  have  been  expected  to 
 predict  that  the  Commission  would  classify  cable  modem  service  as  other  than  a  cable  service. 
 108.  Consumer  Protection  and  Customer  Service.  We  also  seek  comment  on  how  our  information  service  classification  may  affect  other  aspects  of  State  or  local  regulation,  such  as  consumer 


 protection  and  customer  service  standards  regarding  cable  modem  service.  Franchising  authorities  have  expressed  concern  that  their  authority  to  impose  consumer  protection  requirements  pursuant  to  section 
 632  of  the  Communications  Act  would  be  affected  if  cable  modem  service  is  not  classified  as  cable  service.  356  Does  the  authority  conferred  on  franchising  authorities  by  section  632(  a)  of  the 
 Communications  Act  to  establish  and  enforce  customer  service  requirements  apply  to  cable  modem  service  provided  by  a  cable  operator?  357  Do  the  provisions  in  section  632(  d),  stating  that  nothing  in  Title 
 VI  shall  be  construed  to  prohibit  any  State  or  any  franchising  authority  from  enacting  or  enforcing  any  consumer  protection  law,  to  the  extent  not  specifically  preempted  by  [Title  VI],"  or  to  prevent  the 
 establishment  or  enforcement  of  customer  service  laws  or  regulations  that  exceed  Commission  standards  or  address  matters  not  addressed  by  Commission  standards  under  section  632,  apply  to  cable 
 modem  service?  358 
 2.  Pole  Attachments 
 109.  The  Pole  Attachment  Act  gives  cable  television  systems  and  providers  of  telecommunications  service  the  right  to  attach  to  poles  of  power  and  telephone  companies  at  regulated 


 353  See  Letter  from  David  E.  Mills,  Dow,  Lohnes  &  Albertson,  Counsel  to  Cox,  to  W.  Kenneth  Ferree,  Chief,  Cable 
 Services  Bureau,  FCC  (Oct.  16,  2001),  referring  to  pending  litigation  captioned  Bova  v.  Cox  Communications,  Inc.,  Civil  Action  No.  7:  01  CV  00090  (W.  D.  VA.)  (class  action  seeking  recovery  of  franchise  fees  collected  on  cable 


 modem  service).  354 
 Amendment  of  Parts  1,  63  and  76  of  the  Commissions  Rules  to  Implement  the  Provisions  of  the  Cable  Communications  Policy  Act  of  1984,  MM  Docket  No.  84-  1296,  Memorandum  Opinion  and  Order,  104  FCC  2d  386, 


 393    18-  19  (1986),  affd  on  this  point  sub  nom.  ACLU  v.  FCC,  823  F.  2d  1554,  1573-  75  (D.  C.  Cir.  1987);  see  also  Time  Warner  Entertainment/  Advance-  Newhouse  Partnership  and  the  City  of  Orlando,  Florida,  Petitions  for 
 Declaratory  Ruling  on  Franchise  Fee  Issues,  Memorandum  Opinion  and  Order,  14  FCC  Rcd  7678  (1999).  355 
 Henrico  County,  257  F.  3d  at  365.  356 
 See  NATOA  Comments  at  20-  21;  National  League  of  Cities,  et  al.  Comments  at  13-  14.  357 
 See  Communications  Act    632(  a),  47  U.  S.  C.    552(  a).  358 
 See  47  U.  S.  C.    552(  d)(  1),  (2);  see  also  47  C.  F.  R.    76.  309,  76.  1602,  76.  1603. 
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 rates.  359  In  Gulf  Power,  the  United  States  Supreme  Court  held  that  the  Pole  Attachment  Act  applies  to  attachments  by  cable  television  systems  that  provide  Internet  service  in  addition  to  traditional  cable 
 service,  without  regard  to  the  classification  of  the  commingled  cable  modem  service.  360  An  attachment  not  falling  within  the  statutory  rate  formulas  provided  in  sections  224(  d)  for  attachments  by  cable  service 
 providers  or  224(  e)  for  attachments  by  telecommunications  service  providers  would  be  subject  to  just  and  reasonable  rates  prescribed  by  the  Commission.  361  In  the  Pole  Attachment  Order,  the  Commission  had 
 determined  that  the  pole  attachment  rate  applicable  to  attachments  by  cable  television  systems  using  pole  attachments  to  provide  both  traditional  cable  services  and  Internet  services  should  be  determined  by 
 applying  the  formula  specified  in  the  statute  for  cable  services.  362  That  decision  is  not  affected  by  our  categorization  of  cable  modem  service. 


 3.  Universal  Service 
 110.  Several  commenters  have  questioned  whether  cable  operators  should  be  required  to  contribute  to  the  universal  service  fund,  pursuant  to  section  254(  d)  of  the  Communications  Act,  363  based 


 on  the  revenues  from  cable  operators  cable  modem  service  offerings.  364  In  particular,  commenters  have  focused  on  whether  universal  service  contribution  obligations  should  attach  to  what  they  characterize  as 
 the  underlying  telecommunications  component  of  cable  modem  service.  365  The  Commission  is  considering  whether  providers  of  cable  modem  service  should  contribute  to  the  universal  service  fund  in  a 
 separate  proceeding.  366 
 4.  Protection  of  Subscriber  Privacy 
 111.  Section  631  of  the  Communications  Act  addresses  privacy  for  subscribers  to  any  cable  service  or  other  service  provided  by  a  cable  operator.  367  Other  service  is  defined  as  any  wire  or  radio 


 communications  service  provided  using  any  of  the  facilities  of  a  cable  operator  that  are  used  in  the 
 359  Communications  Act    224,  47  U.  S.  C.    224. 
 360  Gulf  Power,  112  S.  Ct.  at  786,  787-  88,  789. 
 361  Id.  at  787-  88.  See  47  U.  S.  C.    224(  d),  (e). 
 362  See  Implementation  of  Section  703(  e)  of  the  Telecommunications  Act  of  1996,  Amendment  of  the  Commissions 
 Rules  and  Policies  Governing  Pole  Attachments,  CS  Docket  No.  97-  151,  Report  and  Order  (  Pole  Attachment  Order),  13  FCC  Rcd  6777,  6794-  96    32,  34  (1998). 


 363  47  U.  S.  C.  254(  d). 
 364  See,  e.  g.,  Comcast  Comments  at  42-  43;  SBC/  BellSouth  Comments  at  37,  Reply  Comments  at  22-  23;  OPATSCO 
 Comments  at  2-  4;  Texas  Office  of  Public  Utility  Counsel  Comments  at  21;  USTA  Comments  at  23-  24;  VoiceStream  Reply  at  1,  14-  17;  see  also  USTA  Petition  for  Declaratory  Ruling  on  Universal  Service  Contribution  Obligations  of 


 Cable  Operators  that  Provide  Telecommunications  Service  (GN  Docket  No.  00-  185,  filed  Sept.  26,  2000).  365 
 If  a  cable  operator  were  to  be  also  classified  as  a  telecommunications  carrier  because  it  provides  a  separate  telecommunications  service,  universal  service  contribution  obligations  would  be  mandatory  under  section  254(  d)  of 


 the  Communications  Act.  47  U.  S.  C.    254(  d).  Section  254(  d)  also  provides  the  Commission  with  the  discretion,  if  the  public  interest  so  requires,  to  impose  universal  service  contribution  obligations  on  any  provider  of  interstate 
 telecommunications  (as  distinguished  from  telecommunications  service).  47  U.  S.  C.    254(  d).  366 
 See  Wireline  Broadband  NPRM,  FCC  02-  42,    79-  80.  367 
 A  cable  operator  is  defined  for  purposes  of  section  631  to  include  any  person  who  (i)  is  owned  or  controlled  by,  or  under  common  ownership  or  control  with,  a  cable  operator,  and  (ii)  provides  any  wire  or  radio 


 communications  service  as  well  as  persons  within  the  definition  in  section  602.  47  U.  S.  C.    551(  a)(  2)(  C)  (citing  47  U.  S.  C.    522(  5)).  The  Commission  has  interpreted  this  section  to  encompass  cable  operators  and  their  affiliates  that 
 provide  any  wire  or  radio  communications  service.  See  FCC  AOL  Time  Warner  Merger  Order,  16  FCC  Rcd  at  6665    279. 
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 57 
 provision  of  cable  service  368  and  has  been  interpreted  by  a  court  to  encompass  Internet  service  provided  via  a  cable  system.  369  Section  631  requires  cable  operators  to  provide  periodic  written  notice  informing 
 each  subscriber  about  the  nature  and  use  of  personally  identifiable  information  to  be  collected  by  the  cable  operator.  With  certain  exceptions,  section  631  prohibits  a  cable  operator  from  collecting  or 
 disclosing  such  information  without  the  prior  consent  of  the  subscriber.  370  The  cable  operator  can  collect  information  needed  to  provide  a  cable  service  or  other  service  and  can  disclose  information  for  a  business 
 activity  related  to  such  services.  Section  631  further  provides  that  [  n]  othing  within  this  title  shall  be  construed  to  prohibit  any  State  or  any  franchising  authority  from  enacting  or  enforcing  laws  consistent 
 with  this  section  for  the  protection  of  subscriber  privacy.  371 
 112.  In  light  of  our  determination  in  the  Declaratory  Ruling  that  cable  modem  service  is  an  information  service,  we  believe  that  cable  modem  service  would  be  included  in  the  category  of  other 


 service  for  purposes  of  section  631.  We  seek  comment  on  this  interpretation.  Although  section  631s  terms  are  enforced  by  the  courts,  and  not  by  the  Commission,  372  we  seek  comment  as  to  how  the  privacy 
 requirements  of  section  631  affect  providers  of  cable  modem  service.  373 
 V.  ADMINISTRATIVE  MATTERS 
 A.  Initial  Regulatory  Flexibility  Analysis 
 113.  As  required  by  the  Regulatory  Flexibility  Act  of  1980,  as  amended  ("  RFA"),  374  the  Commission  has  prepared  this  Initial  Regulatory  Flexibility  Analysis  ("  IRFA")  of  the  possible  significant 


 economic  impact  on  a  substantial  number  of  small  entities  by  the  policies  and  rules  considered  in  the  notice  of  proposed  rulemaking  initiated  herein.  Written  public  comments  are  requested  on  this  IRFA. 
 Comments  must  be  identified  as  responses  to  this  IRFA  and  must  be  filed  by  the  deadlines  for  comments  on  the  notice  of  proposed  rulemaking  provided  in  paragraph  126  of  this  item.  The  Commission  will  send 
 a  copy  of  the  notice  of  proposed  rulemaking,  including  this  IRFA,  to  the  Chief  Counsel  for  Advocacy  of  the  Small  Business  Administration  (  SBA).  375  In  addition,  the  notice  of  proposed  rulemaking  and  the 


 368  47  U.  S.  C.    551.  Subsection  (a)(  2)(  B)  defines  other  service. 
 369  See  Application  of  the  United  States  of  America  for  an  Order  Pursuant  to  18  U.  S.  C.    2703(  D)  (  Application  of 
 the  United  States),  157  F.  Supp.  2d  286,  291  (S.  D.  N.  Y.  2001).  370 
 47  U.  S.  C.    551(  a),  (b),  (c).  The  provisions  in  subsection  (h),  regarding  the  standard  of  proof  for  a  court  order  and  giving  the  subject  an  opportunity  to  appear  and  contest  the  claims  made  to  support  a  court  order,  have  been 


 found  to  be  inapplicable  to  other  service.  See  Application  of  the  United  States,  157  F.  Supp.  2d  at  291  (citing  47  U.  S.  C.    551(  a)(  2)  (defining  other  service  for  purposes  other  than  section  (h)).  An  exception  to  the  restriction  on 
 disclosure  added  by  the  USA  Patriot  Act  permits  an  operator  to  disclose  personally  identifiable  information  to  a  government  entity  as  authorized  under  certain  provisions  of  title  18  of  the  United  States  Code,  other  than  records 
 regarding  the  subscribers  selection  of  video  programming.  See  Uniting  and  Strengthening  America  by  Providing  Appropriate  Tools  Required  to  Intercept  and  Obstruct  Terrorism  Act  of  2001  (  USA  Patriot  Act),  Pub.  L.  No.  107- 
 56,  Title  II,    211,  115  Stat.  283  (2001),  47  U.  S.  C.    551(  c)(  2)(  D).  371 
 47  U.  S.  C.    551(  g).  See  National  League  of  Cities,  et  al  Comments  at  15  (arguing  that  the  privacy  provisions  of    631  can  and  should  apply  to  cable  modem  service). 


 372  See  47  U.  S.  C.    551(  f)  (providing  that  any  person  aggrieved  by  the  section  may  bring  a  civil  action  in  a  United 
 States  district  court).  373 
 As  a  condition  for  its  approval  of  the  AOL  Time  Warner  merger,  the  Commission  required  AOL  Time  Warner  to  certify  periodically  that  AOL  Time  Warner  is  and  will  remain  in  compliance  with  section  631.  FCC  AOL  Time 


 Warner  Merger  Order,  16  FCC  Rcd  at  6665    279.  374 
 See  5  U.  S.  C.    603.  The  RFA,  5  U.  S.  C.    601  et.  seq.,  has  been  amended  by  the  Small  Business  Regulatory  Enforcement  Fairness  Act  of  1996  (  SBREFA),  Pub.  L.  No.  104-  121,  Title  II,  110  Stat.  847  (1996). 


 375  See  5  U.  S.  C.    603(  a). 
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 IRFA  (or  summaries  thereof)  will  be  published  in  the  Federal  Register.  376 
 1.  Need  for,  and  Objectives  of,  the  Proposed  Rules 
 114.  With  our  declaratory  ruling  herein,  we  have  sought  to  provide  regulatory  certainty  for  the  emerging  cable  modem  service  industry  by  resolving  a  nationwide  controversy  concerning  the  proper 


 regulatory  classification  of  cable  modem  service  under  federal  law.  377  In  doing  so,  we  recognize  that  there  are  a  number  of  related  issues  that  may  need  resolution  in  the  form  of  federal  rules.  By  this  notice 
 of  proposed  rulemaking,  we  seek  comment  on  certain  issues  related  to  the  practical  implementation  of  our  classification  of  cable  modem  service  as  an  information  service. 


 2.  Legal  Basis 
 115.  The  authority  for  the  action  proposed  in  this  rulemaking  is  contained  in  Sections  1,  2(  a),  3,  4(  i),  4(  j),  303,  and  601  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    151,  152(  a), 


 153,  154(  i),  154(  j),  303,  and  521,  and  Section  706  of  the  Telecommunications  Act  of  1996,  47  U.  S.  C.    157  nt. 


 3.  Description  and  Estimate  of  the  Number  of  Small  Entities  to  Which  the  Proposed  Rules  Will  Apply 
 116.  The  RFA  directs  agencies  to  provide  a  description  of,  and  where  feasible,  an  estimate  of  the  number  of  small  entities  that  may  be  affected  by  the  proposed  rules,  if  adopted.  378  The  RFA  generally 
 defines  the  term  small  entity  as  having  the  same  meaning  as  the  terms  small  business,  small  organization,  and  small  governmental  jurisdiction.  379  In  addition,  the  term  small  business  has  the 
 same  meaning  as  the  term  small  business  concern  under  the  Small  Business  Act.  380  A  small  business  concern  is  one  which:  (1)  is  independently  owned  and  operated;  (2)  is  not  dominant  in  its  field  of 
 operation;  and  (3)  satisfies  any  additional  criteria  established  by  the  SBA.  381 
 117.  The  SBA  has  developed  a  small  business  size  standard  for  cable  and  other  program  distribution,  which  includes  all  such  companies  generating  $11  million  or  less  in  revenue  annually.  382 


 This  category  includes,  among  others,  cable  operators,  closed  circuit  television  services,  direct  broadcast  satellite  services,  multipoint  distribution  services,  open  video  systems  (  OVS),  satellite  master  antenna 
 television  (  SMATV)  systems,  and  subscription  television  services.  According  to  the  Census  Bureau  data  from  1992,  there  were  1,788  total  cable  and  other  pay  television  services  and  1,423  had  less  than  $11 


 376  Id. 
 377  Cable  modem  service  refers  to  the  provision  of  high-  speed  Internet  access  service  over  cable  system  facilities. 
 See  supra  para.  1.  378 
 5  U.  S.  C.    603(  b)(  3).  379 
 Id.    601(  6).  380 
 Id.    601(  3)  (incorporating  by  reference  the  definition  of  small  business  concern  in  the  Small  Business  Act,  15  U.  S.  C.    632).  Pursuant  to  5  U.  S.  C.    601(  3),  the  statutory  definition  of  a  small  business  applies  unless  an  agency, 


 after  consultation  with  the  Office  of  Advocacy  of  the  Small  Business  Administration  and  after  opportunity  for  public  comment,  establishes  one  or  more  definitions  of  such  term  which  are  appropriate  to  the  activities  of  the  agency  and 
 publishes  such  definition(  s)  in  the  Federal  Register.  381 
 15  U.  S.  C.    632.  382 
 13  C.  F.  R.    121.  201,  North  American  Industry  Classification  System  (  NAICS)  code  513220. 
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 million  in  revenue.  383  We  address  cable  operators  and  OVS  operators  below  to  provide  a  more  precise  estimate  of  the  affected  small  entities.  We  do  not  believe  that  the  other  pay  television  services  would  be 
 affected  by  the  proposals  in  this  notice  of  proposed  rulemaking. 
 118.  Cable  Systems.  The  Commission  has  developed  its  own  small  business  size  standard  for  a  small  cable  operator  for  the  purposes  of  rate  regulation.  Under  the  Commission's  rules,  a  "small  cable 


 company"  is  one  serving  fewer  than  400,000  subscribers  nationwide.  384  Based  on  our  most  recent  information,  we  estimate  that  there  were  1,439  cable  operators  that  qualified  as  small  cable  companies  at 
 the  end  of  1995.  385  Since  then,  some  of  those  companies  may  have  grown  to  serve  over  400,000  subscribers,  and  others  may  have  been  involved  in  transactions  that  caused  them  to  be  combined  with 
 other  cable  operators.  Consequently,  we  estimate  that  there  are  fewer  than  1,439  small  cable  companies  that  may  be  affected  by  the  proposed  rules. 


 119.  The  Communications  Act  of  1934,  as  amended,  also  contains  a  size  standard  for  a  small  cable  operator,  which  is  "a  cable  operator  that,  directly  or  through  an  affiliate,  serves  in  the  aggregate 
 fewer  than  one  percent  of  all  subscribers  in  the  United  States  and  is  not  affiliated  with  any  entity  or  entities  whose  gross  annual  revenues  in  the  aggregate  exceed  $250,000,000."  386  The  Commission  has 
 determined  that  there  are  67,700,000  subscribers  in  the  United  States.  387  Therefore,  an  operator  serving  fewer  than  677,000  subscribers  shall  be  deemed  a  small  operator,  if  its  annual  revenues,  when  combined 
 with  the  total  annual  revenues  of  all  of  its  affiliates,  do  not  exceed  $250  million  in  the  aggregate.  388  Based  on  available  data,  we  estimate  that  the  number  of  cable  operators  serving  677,000  subscribers  or 
 less  totals  approximately  1,450.  389  We  do  not  request  or  collect  information  on  whether  cable  operators  are  affiliated  with  entities  whose  gross  annual  revenues  exceed  $250,000,000,  390  and  therefore  are  unable 
 to  estimate  accurately  the  number  of  cable  system  operators  that  would  qualify  as  small  cable  operators  under  the  definition  in  the  Communications  Act. 


 120.  Open  Video  Systems.  Because  OVS  operators  provide  subscription  services,  391  OVS  falls  within  the  SBA-  recognized  definition  of  Cable  and  Other  Program  Distribution.  392  This  standard 
 383  See  U.  S.  Department  of  Commerce,  Bureau  of  the  Census,  1992  Economic  Census  Industry  and  Enterprise 
 Receipts  Size  Report,  Table  2D  (U.  S.  Bureau  of  the  Census  data  under  contract  to  the  Office  of  Advocacy  of  the  U.  S.  Small  Business  Administration).  These  data  have  been  updated  for  1997,  but  without  the  small  business 


 breakout.  See  Summary,  1997  Economic  Census,  Subject  Series:  Information,  at  24  (issued  April  2001).  By  1997,  the  census  total  for  firms  in  this  category  had  increased  to  4,  185.  Id. 
 384  47  C.  F.  R.    76.  901(  e).  The  Commission  developed  this  definition  based  on  its  determinations  that  a  small  cable 
 company  is  one  with  annual  revenues  of  $100  million  or  less.  See  Implementation  of  Sections  of  the  Cable  Television  Consumer  Protection  and  Competition  Act  of  1992:  Rate  Regulation,  MM  Doc.  Nos.  92-  266  and  93-  215, 


 Sixth  Report  and  Order  and  Eleventh  Order  on  Reconsideration,  10  FCC  Rcd  7393,  7408-  7409    28-  30  (1995).  385 
 Paul  Kagan  Assocs.,  Inc.,  Cable  TV  Investor,  Feb.  29,  1996  (based  on  figures  for  Dec.  30,  1995).  386 
 47  U.  S.  C.    543(  m)(  2).  387 
 See  FCC  Announces  New  Subscriber  Count  for  the  Definition  of  Small  Cable  Operator,  Public  Notice,  16  FCC  Rcd  2225  (2001). 


 388  47  C.  F.  R.    76.1403(  b). 
 389  See  FCC  Announces  New  Subscriber  Count  for  the  Definition  of  Small  Cable  Operator,  Public  Notice,  16  FCC 
 Rcd  2225  (2001).  390 
 We  do  receive  such  information  on  a  case-  by-  case  basis  only  if  a  cable  operator  appeals  a  local  franchise  authoritys  finding  that  the  operator  does  not  qualify  as  a  small  cable  operator  pursuant  to  section  76.  901(  f)  of  the 


 Commissions  rules.  See  47  C.  F.  R.    76.  990(  b).  391 
 See  47  U.  S.  C.    573.  392 
 13  C.  F.  R.    121.201,  NAICS  Codes  51321  and  51322. 
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 provides  that  a  small  entity  is  one  with  $11  million  or  less  in  annual  receipts.  393  The  Commission  has  certified  approximately  25  OVS  operators  to  serve  75  areas,  and  some  of  those  are  currently  providing 
 service.  394  Affiliates  of  Residential  Communications  Network,  Inc.  (  RCN)  received  approval  to  operate  OVS  systems  in  New  York  City,  Boston,  Washington,  D.  C.  and  other  areas.  RCN  has  sufficient  revenues 
 to  assure  us  that  they  do  not  qualify  as  small  business  entities.  Little  financial  information  is  available  for  the  other  entities  authorized  to  provide  OVS  that  are  not  yet  operational.  Given  that  other  entities  have 
 been  authorized  to  provide  OVS  service  but  have  not  yet  begun  to  generate  revenues,  we  conclude  that  at  least  some  of  the  OVS  operators  qualify  as  small  entities. 


 4.  Description  of  Projected  Reporting,  Recordkeeping  and  Other  Compliance  Requirements 
 121.  The  notice  of  proposed  rulemaking  seeks  comment  on  the  regulatory  implications  of  the  Commissions  finding  that  cable  modem  service  is  an  information  service  under  the  Communications 
 Act.  395  Specifically,  the  notice  of  proposed  rulemaking  seeks  comment  on  whether  the  Commission  should  require  cable  operators  that  provide  cable  modem  service  to  allow  unaffiliated  ISPs  to  have  direct 
 access  to  the  cable  operators  subscribers  via  the  cable  system  facilities. 
 122.  The  notice  of  proposed  rulemaking  also  seeks  comment  on  the  scope  of  state  and  local  government  authority  over  cable  modem  service  in  light  of  the  Commissions  finding  that  it  is  an 


 information  service.  This  determination  may  not  have  a  direct  effect  on  small  entities,  but  indirectly  it  may  impact  small  entities,  such  as  small  cable  operators,  if  local  governments  are  permitted  to  require 
 cable  operators  to  grant  unaffiliated  ISPs  access  to  the  cable  system  or  if  local  governments  are  permitted  to  enforce  other  regulations  that  affect  a  cable  operators  provision  of  cable  modem  service. 


 5.  Steps  Taken  to  Minimize  Significant  Impact  on  Small  Entities  and  Significant  Alternatives  Considered 
 123.  The  IRFA  requires  an  agency  to  describe  any  significant  alternatives  that  it  has  considered  in  proposing  regulatory  approaches,  which  may  include,  among  others,  the  following  four 
 alternatives:  (1)  the  establishment  of  differing  compliance  or  reporting  requirements  or  timetables  that  take  into  account  the  resources  available  to  small  entities;  (2)  the  clarification,  consolidation,  or 
 simplification  of  compliance  or  reporting  requirements  under  the  rule  for  small  entities;  (3)  the  use  of  performance,  rather  than  design,  standards;  and  (4)  an  exemption  from  coverage  of  the  rule,  or  any  part 
 thereof,  for  small  entities. 
 124.  The  notice  of  proposed  rulemaking  seeks  comment  on  several  regulatory  alternatives  to  implement  the  Commissions  classification  of  cable  modem  service  as  an  information  service  under  the 


 Communications  Act.  For  example,  alternatives  considered  in  the  notice  of  proposed  rulemaking  include  whether  unaffiliated  ISPs  should  be  provided  with  access  to  cable  systems  and,  if  so,  which  of  the  various 
 access  models  should  be  adopted.  In  addition,  we  will  also  consider  whether  any  access  requirements  ultimately  adopted  should  be  different  for  large  cable  operators  from  those  imposed  on  small  cable 
 operators.  396  Finally,  the  notice  of  proposed  rulemaking  considers  whether  the  Commission  should  refrain  entirely  from  imposing  any  ISP  access  requirements  on  cable  operators.  We  would  expect  that 
 whichever  alternatives  are  chosen  the  Commission  will  seek  to  minimize  any  adverse  effects  on  small 
 393  Id. 
 394  See  Federal  Communications  Commission,  Filings  for  Certification  of  Open  Video  Systems,  at 
 http://  www.  fcc.  gov/  csb/  ovs/  csovscer.  html  (visited  Jan.  8,  2002).  395 
 47  U.  S.  C.    153(  20).  396 
 See  ACA  Comments  at  15-  18. 
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 entities. 
 6.  Federal  Rules  Which  Duplicate,  Overlap,  or  Conflict  with  the  Commission's  Proposals 


 125.  None. 
 B.  Procedural  Provisions 
 126.  Comments  and  Reply  Comments.  Pursuant  to  applicable  procedures  set  forth  in  sections  1.415  and  1.419  of  the  Commission's  rules,  397  interested  parties  may  file  comments  on  the  notice  of 


 proposed  rulemaking  in  CS  Docket  No.  02-  52,  Appropriate  Regulatory  Treatment  for  Broadband  Access  to  the  Internet  over  Cable  Facilities,  on  or  before  60  days  after  date  of  publication  in  the  Federal  Register, 
 and  reply  comments  on  or  before  90  days  after  date  of  publication  in  the  Federal  Register.  Comments  may  be  filed  using  the  Commission's  Electronic  Comment  Filing  System  (  ECFS)  or  by  filing  paper 
 copies.  398  Given  recent  changes  in  the  Commissions  mail  delivery  system,  parties  are  strongly  urged  to  use  the  ECFS  to  file  their  pleadings.  Comments  filed  through  the  ECFS  can  be  sent  as  an  electronic  file 
 via  the  Internet  to  <http://  www.  fcc.  gov/  e-  file/  ecfs.  html>.  Only  one  copy  of  an  electronic  submission  must  be  filed.  In  completing  the  transmittal  screen,  electronic  filers  should  include  their  full  name,  Postal 
 Service  mailing  address,  and  the  applicable  docket  or  rulemaking  number.  Parties  may  also  submit  an  electronic  comment  by  Internet  e-  mail.  To  receive  filing  instructions  for  e-  mail  comments,  commenters 
 should  send  an  e-  mail  to  ecfs@  fcc.  gov,  and  should  include  the  following  words  in  the  body  of  the  message,  "get  form  <your  e-  mail  address>."  A  sample  form  and  directions  will  be  sent  in  reply. 


 127.  Parties  who  choose  to  file  by  paper  must  file  an  original  and  four  copies  of  each  filing  in  CS  Docket  No.  02-  52.  If  parties  want  each  Commissioner  to  receive  a  personal  copy  of  their  comments, 
 an  original  plus  nine  copies  must  be  filed.  All  filings  must  be  sent  to  the  Commission's  Acting  Secretary,  William  F.  Caton,  Office  of  the  Secretary,  Federal  Communications  Commission,  445  12th  Street,  S.  W., 
 Washington  D.  C.  20054.  All  filings  sent  to  the  Commission  by  overnight  delivery,  e.  g.,  Federal  Express,  must  be  sent  to  the  Commissions  Acting  Secretary,  William  F.  Caton,  Office  of  the  Secretary,  Federal 
 Communications  Commission,  445  12th  Street,  S.  W.,  Washington  D.  C.  20024.  All  hand-  delivered  or  messenger-  delivered  filings  must  be  delivered  to  the  Commissions  filing  location  at  236  Massachusetts 
 Avenue,  N.  E.,  Suite  110,  Washington,  D.  C.  20002-  4913.  399  The  filing  hours  at  this  facility  are  8:  00  a.  m.  to  7:  00  p.  m.  Parties  must  also  serve  the  following  with  either  one  copy  of  each  filing  via  e-  mail  or  two 
 paper  copies:  (1)  Qualex  International,  Portals  II,  445  12  th  Street,  S.  W.,  Room  CY-  B402,  Washington,  D.  C.,  20554,  telephone  (202)  863-  2893,  facsimile  (202)  863-  2898,  or  e-  mail  at  qualexint@  aol.  com;  and 
 (2)  Sarah  Whitesell,  Cable  Services  Bureau,  445  12  th  Street,  S.  W.,  3-  C488,  Washington,  D.  C.,  20554,  swhitese@  fcc.  gov.  In  addition,  five  copies  of  each  filing  must  be  filed  with  Linda  Senecal,  Cable 
 Services  Bureau,  445  12  th  Street,  S.  W.,  2-  C438,  Washington,  D.  C.  20554,  lsenecal@  fcc.  gov. 
 128.  Ex  Parte  Rules.  This  proceeding  will  be  treated  as  a  permit-  but-  disclose  proceeding,  subject  to  the  permit-  but-  disclose  requirements  under  section  1.1206(  b)  of  the  Commissions  rules.  400 


 Ex  parte  presentations  are  permissible  if  disclosed  in  accordance  with  Commission  rules,  except  during  the  Sunshine  Agenda  period  when  presentations,  ex  parte  or  otherwise,  are  generally  prohibited.  Persons 


 397  47  C.  F.  R.    1.415  and  1.  419. 
 398  See  Electronic  Filing  of  Documents  in  Rulemaking  Proceedings,  63  Fed.  Reg.  24121  (1998). 


 399  See  FCC  Announces  a  New  Filing  Location  for  Paper  Documents  and  a  New  Fax  Number  for  General 
 Correspondence,  Public  Notice,  DA  01-  2919  (rel.  Dec.  14,  2001).  400 
 47  C.  F.  R.    1.1206(  b). 
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 making  oral  ex  parte  presentations  are  reminded  that  a  memorandum  summarizing  a  presentation  must  contain  a  summary  of  the  substance  and  not  merely  a  listing  of  the  subjects  discussed.  More  than  a  one  or 
 two  sentence  description  of  the  views  and  arguments  presented  is  generally  required.  401  Additional  rules  pertaining  to  oral  and  written  presentations  are  set  forth  in  section  1.1206(  b)  of  the  Commissions  rules. 
 Parties  submitting  written  ex  parte  presentations  or  summaries  of  oral  ex  parte  presentations  are  urged  to  use  the  ECFS  in  accordance  with  the  Commission  rules  discussed  above.  Parties  filing  paper  ex  parte 
 submissions  must  file  an  original  and  one  copy  of  each  submission  with  the  Commissions  Acting  Secretary,  William  F.  Caton,  at  the  appropriate  address  as  shown  above  for  filings  sent  by  either  U.  S. 
 mail,  overnight  delivery,  or  hand  or  messenger  delivery.  Parties  must  also  serve  the  following  with  either  one  copy  of  each  ex  parte  filing  via  e-  mail  or  two  paper  copies:  (1)  Qualex  International,  Portals  II,  445 
 12  th  Street,  S.  W.,  Room  CY-  B402,  Washington,  D.  C.,  20554,  telephone  (202)  863-  2893,  facsimile  (202)  863-  2898,  or  e-  mail  at  qualexint@  aol.  com;  and  (2)  Sarah  Whitesell,  Cable  Services  Bureau,  445  12  th 
 Street,  S.  W.,  3-  C488,  Washington,  D.  C.,  20554,  swhitese@  fcc.  gov;  and  (3)  Linda  Senecal,  Cable  Services  Bureau,  445  12  th  Street,  S.  W.,  2-  C438,  Washington,  D.  C.  20554,  lsenecal@  fcc.  gov. 


 129.  Availability  of  Documents.  Comments,  reply  comments,  and  ex  parte  submissions  will  be  available  for  public  inspection  during  regular  business  hours  in  the  FCC  Reference  Center,  Federal 
 Communications  Commission,  445  12th  Street,  S.  W.,  CY-  A257,  Washington,  D.  C.  20554.  Persons  with  disabilities  who  need  assistance  in  the  FCC  Reference  Center  may  contact  Bill  Cline  at  (202)  418-  0267, 
 (202)  418-  7365  TTY,  or  bcline@  fcc.  gov.  These  documents  also  will  be  available  electronically  at  the  Commissions  Disabilities  Issues  Task  Force  web  site:  www.  fcc.  gov/  dtf,  and  from  the  Commissions 
 Electronic  Comment  Filing  System.  Documents  are  available  electronically  in  ASCII  text,  Word  97,  and  Adobe  Acrobat.  Copies  of  filings  in  this  proceeding  may  be  obtained  from  Qualex  International,  Portals 
 II,  445  12  th  Street,  S.  W.,  Room,  CY-  B402,  Washington,  D.  C.,  20554,  telephone  (202)  863-  2893,  facsimile  (202)  863-  2898,  or  via  e-  mail  at  qualexint@  aol.  com. 


 130.  This  document  is  available  in  alternative  formats  (computer  diskette,  large  print,  audio  cassette,  and  Braille).  Persons  who  need  documents  in  such  formats  may  contact  Brian  Millin  at  (202) 
 418-  7426,  TTY  (202)  418-  7365,  or  send  an  e-  mail  to  access@  fcc.  gov. 
 131.  Contact  Information.  The  Cable  Services  Bureau  contact  for  this  proceeding  is  Sarah  Whitesell  at  (202)  418-  7200,  swhitese@  fcc.  gov.  Press  inquiries  should  be  directed  to  Michelle  Russo  at 


 (202)  418-  2358,  mrusso@  fcc.  gov.  TTY:  (202)  418-  7365  or  (888)  835-  5322. 
 132.  Declaratory  Ruling.  Any  future  pleadings  filed  in  response  to  the  declaratory  ruling  in  this  Order  should  be  filed  under  the  caption,  Internet  Over  Cable  Declaratory  Ruling,  GN  Docket  No. 


 00-  185,  separately  from  the  comments  filed  in  CS  Docket  No.  02-  52. 


 401  See  id.    1.1206(  b)(  2). 
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 VI.  ORDERING  CLAUSES 
 133.  Accordingly,  IT  IS  ORDERED,  that  pursuant  to  authority  contained  in  sections  1,  2,  3,  4,  303,  403,  and  601  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    151,  152,  153,  154, 


 303,  403,  521,  section  706  of  the  Telecommunications  Act  of  1996,  and  section  1.2  of  the  Commissions  Rules  and  Regulations,  47  C.  F.  R.    1.  2,  this  Declaratory  Ruling  and  Notice  of  Proposed  Rulemaking 
 ARE  ADOPTED. 
 134.  IT  IS  FURTHER  ORDERED  that,  pursuant  to  the  authority  contained  in  sections  1,  2,  3,  4,  303,  403,  and  601  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    151,  152,  153,  154, 


 303,  403,  521,  section  706  of  the  Telecommunications  Act  of  1996,  and  section  1.2  of  the  Commissions  Rules  and  Regulations,  47  C.  F.  R.    1.2,  NOTICE  IS  HEREBY  GIVEN  of  the  proposals  described  in  this 
 Notice  of  Proposed  Rulemaking. 
 135.  IT  IS  FURTHER  ORDERED  that  the  Commission's  Consumer  Information  Bureau,  Reference  Information  Center,  shall  send  a  copy  of  this  Notice  of  Proposed  Rulemaking,  including  the 


 Initial  Regulatory  Flexibility  Analysis,  to  the  Chief  Counsel  for  Advocacy  of  the  Small  Business  Administration. 


 FEDERAL  COMMUNICATIONS  COMMISSION 


 William  F.  Caton  Acting  Secretary 
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 APPENDIX 
 LIST  OF  COMMENTERS 


 INITIAL  COMMENTS 
 AeA  Alliance  for  Public  Technology 
 American  Cable  Association  (  ACA)  Association  for  Maximum  Service  Television,  Inc.  (  MST) 
 Association  of  Communications  Enterprises  (  ASCENT)*  Association  of  Americas  Public  Television  Stations  (  APTS) 
 AT&  T  Corporation  (  AT&  T)  Big  Planet  Inc.  (  Big  Planet) 
 Cable  &  Wireless  Cablevision  Systems  Corporation  (  Cablevision) 
 Cellular  Telecommunications  Industry  Association  (  CTIA)  Center  for  Democracy  &  Technology 
 CenturyTel,  Inc.  (  CenturyTel)  Charter  Communications  (  Charter) 
 Circuit  City  Stores,  Inc.  (  Circuit  City)  Citizens  for  a  Sound  Economy 
 City  of  Los  Angeles  (  Los  Angeles)  City  of  New  Orleans  (  New  Orleans) 
 Comcast  Corporation  (  Comcast)  Commercial  Internet  Exchange  Association  (  CIX) 
 Communications  Workers  of  America  Competition  Policy  Institute 
 Competitive  Access  Coalition  Competitive  Telecommunications  Association  (  CompTel) 
 Consumer  and  ISP  Representatives  (including:  National  Association  of  Towns  and  Townships,  Citizen  Power,  Inc.,  the  Utilities  Commission,  New  Smyrna  Beach, 
 Fl.,  Amigo.  net  and  NorthNet)  Consumers  Union,  Consumer  Federation  of  America,  Center  for  Media  Education  and 
 Media  Access  Project  (  CU)  Cox  Communications  (  Cox) 
 EarthLink,  Inc  (  EarthLink)  EchoStar  Satellite  Corporation  (  EchoStar) 
 Excite@  Home  (  Excite)  Gemini  Networks,  Inc.  (  Gemini) 
 Heartland  Institute  (  Heartland)  Information  Technology  Industry  Council 
 Lampe,  Matthew  (  Lampe)  Marin  Telecommunications  Agency  (  Marin) 
 Menard,  Francois  D.  (  Menard)  Mercatus  Center  (  Mercatus) 
 Metricom,  Inc.  (  Metricom)  Millenium  Media,  Inc.  (  Millenium) 
 National  Association  of  Telecommunications  Officers  &  Advisors  (  NATOA)  National  Cable  Television  Association  (  NCTA) 
 National  League  of  Cities,  et  al.  NetCompete  Now 
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 New  Hampshire  ISP  Association  Newspaper  Association  of  America 
 OpenNET  Coalition  (  OpenNET)  Organization  for  the  Promotion  and  Advancement  of  Small  Telecommunications 
 Companies  (  OPASTCO)  Qwest  Communications  International,  Inc.  (  Qwest) 
 Pegasus  Communications  Corp.  (  Pegasus)  Progress  &  Freedom  Foundation 
 RCN  Telecom  Services,  Inc.  (  RCN)  SBC  Communications  Inc.  &  BellSouth  Corporation  (  SBC/  BellSouth) 
 SBCA  and  the  SIA  Satellite  Broadband  &  Internet  Division  (  SBCA)  StarBand  Communications  (  StarBand) 
 Telecommunications  Industry  Association  (  TIA)  Texas  Office  of  Public  Utility  Counsel 
 Towns  of  East  Hampton  and  Southampton,  NY  United  States  Internet  Industry  Association  &  iAdvance  (  USIIA) 
 United  States  Telecom  Association  (  USTA)  Utilicom  Networks,  Inc.  (  Utilicom) 
 Verizon  Communications  (  Verizon)  WorldCom,  Inc.  (  WorldCom) 


 *Late  Filed 
 REPLY  COMMENTS 
 AARP  Adelphia  Communications  Corp.  (  Adelphia) 
 Alliance  for  Community  Media  Alliance  for  Public  Technology 
 American  Automobile  Association  (  AAA)  American  Cable  Association  (  ACA) 
 AT&  T  Corp.  (  AT&  T)  Cable  &  Communications  Corporation 
 California  Cable  Television  Association  (  CCTA)  Center  for  Democracy  and  Technology* 
 Charter  Communications  (  Charter)  City  and  County  of  San  Francisco  (  San  Francisco) 
 Comcast  Corporation  (  Comcast)  Commercial  Internet  Exchange  (  CIX) 
 Competitive  Access  Coalition  Competitive  Telecommunications  Association  (  CompTel) 
 Cox  Communications  (  Cox)  High  Speed  Access  Corp.  (  HSA) 
 Hughes  Network  Systems,  Hughes  Communications,  Inc.  &  Hughes  Communications  Galaxy,  Inc.  (  Hughes) 
 IbssNet  Internet  Service*  Insight  Communications  Company  (  Insight) 
 Mediacom  Communications  Corp.  (  Mediacom)*  Menard,  Francois  D.  (  Menard) 
 National  Association  of  Broadcasters  (  NAB)  National  Association  of  Telecommunications  Officers  &  Advisors  (  NATOA) 
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 National  Association  of  Towns  and  Townships  National  Cable  Television  Association  (  NCTA) 
 National  League  of  Cities,  Texas  Coalition  of  Cities  &  Cities  of  Palo  Alto  &  Eugene  (  National  League  of  Cities) 
 New  Hampshire  ISP  Association  OpenNet  Coalition  (  OpenNET) 
 SBC  Communications,  Inc.  &  BellSouth  Corp.  (  SBC/  BellSouth)  Small  ISPs  (Listed  Below) 
 Speta,  Professor  James  B.  (  Speta)  StarBand  Communications  (  Starband) 
 State  of  California  &  the  Public  Utilities  Commission*  Texas  Office  of  Public  Utility  Counsel,  Consumer  Federation  of  America  and 
 Consumers  Union*  Time  Warner  Cable  (  Time  Warner) 
 United  States  Telecom  Association  (  USTA)  Utilicom  Networks  LLC  (  Utilicom) 
 Verizon  Communications  (  Verizon)  Voicestream  Wireless  (  Voicestream) 
 WorldCom  Inc.  (  WorldCom) 
 *Late  Filed 


 Filings  by  Small  ISPs 
 A+  Net  Internet  Advanced  Computer  &  Communication  Systems  (  ACCS) 
 APK  Net,  Inc.  Association  for  Competitive  Technology 
 Brand  X  Internet  Carolina  Online 
 ColusaNET  Computer  Office  Solutions,  Inc.  (  COS) 
 DataFoundry.  net  Fast  Q.  com 
 FlareNet,  Inc.  Fiberhood  Networks 
 Grapevine  Internet  Services  Hamptons  Online 
 Hurricane  Internet  IConnectDirect.  com 
 Illuminati  Online  Infobahn  Outfitters 
 In4Web.  com  Infinetivity 
 Instant  Internet  Corporation  HMC  Ltd,  Inc. 
 LavaNet  Inc.  Naisp.  net 
 Netalliance,  Inc.  Networld  Online 
 On-  Ramp  Indiana 
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 Peak  Internet  PCEZ.  com 
 PortOne  Internet  Questar  Information  Systems 
 RICA.  Net  Safe  Access 
 711.  Net  SmartGate  Corporation 
 StarGate  StarLinx 
 Sterling  Communications  Sunrise  Internet  Services 
 Supernova  Systems  Texas  Communications 
 Texas.  Net  Total  Logic  Systems 
 WestPA.  net  Worldnet  Communications 


 EX  PARTE  FILINGS 
 Adelphia  Communications  Allegiance  Telecom 
 Allen,  Timothy  American  Cable  Association 
 AOL  Time  Warner  Inc.  AT&  T  Corporation 
 ATX  Technologies,  Inc.  BELD  Broadband 
 California  Cable  Television  Association  California  Public  Utilities  Commission 
 Cellular  Telecommunications  &  Internet  Association  Charter  Communications 
 Chester  Communications  City  of  Boston  Law  Department 
 City  of  Los  Angeles  Comcast  Corporation 
 Competitive  Telecommunications  Association  Consumers  Union,  et  al. 
 Cox  Communications,  Inc.  Donahue,  Hugh  Carter;  Ferrigno-  Stack,  Josephine;  ODonnell,  Shawn 
 EarthLink,  Inc.  Excite@  Home  Corporation 
 FCC  LSGAC  Focal 
 Grande  Communications  Heins,  Stephen  A. 
 Ilyin,  Sergey  Insight  Communications 
 Media  Access  Project  National  Association  of  Telecommunications  Officers  &  Advisors 
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 National  Cable  &  Telecommunications  Association  OpenNet  Coalition 
 Qwest  Communications  International,  Inc.  SBC  Telecommunications,  Inc. 
 State  of  California  Public  Utility  Commission  US  Internet  Industry  Association 
 United  States  Telecom  Association  Worldcom 
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 SEPARATE  STATEMENT  OF  CHAIRMAN  MICHAEL  K.  POWELL 
 Re:  Inquiry  Concerning  High-  Speed  Access  on  the  Internet  Over  Cable  and  Other  Facilities;  Internet  Over  Cable  Declaratory  Ruling;  Appropriate  Regulatory  Treatment  for  Broadband  Access  to  the 
 Internet  over  Cable  Facilities,  GN  Docket  00-  185. 


 I.  Introduction 
 One  might  ask  what  is  in  a  name?  In  the  law,  a  great  deal.  When  Congress  crafts  legislation  it  defines  the  rights,  responsibilities  and  obligations  by  reference  to  particular  definitions  or  classifications. 
 In  the  multifaceted  world  of  communications  it  has  defined  the  rights  and  obligations  differently,  depending  on  the  nature  of  the  service  offered  without  regard  to  the  means  in  which  it  is  offered. 


 Thus,  the  Commission  has  an  inescapable  duty  to  determine  the  will  of  Congress  by  faithfully  applying  these  definitions  to  new  services.  This  is  not  an  easy  task,  given  all  communication  services 
 have  some  similar  and  overlapping  features. 
 II.  There  Are  Three  Statutory  Classifications 
 For  our  purposes,  there  are  three  essential  regulatory  definitions  under  the  statute,  each  having  different  regulatory  consequences:  Telecommunications  service  is  defined  in  47  U.  S.  C.    153(  46). 
 Cable  service  is  defined  in  Section  602(  6).  And  information  service  is  defined  in  the  United  States  Code  in  Section  153(  20). 


 If  one  looks  throughout  the  statute,  one  will  see  clearly  that  Congress  ascribed  different  regulatory  treatment  to  these  classifications    sometimes  more  regulatory  oversight,  sometimes  less.  For 
 example,  a  cable  service  provider  cannot  be  regulated  as  a  common  carrier  pursuant  to  the  statute.  1  Yet,  as  a  consequence  of  the  statute,  a  telecommunications  service  provider  is  regulated  as  a  common  carrier. 
 Most  importantly,  information  service  is  a  conscious  regulatory  classification  under  the  statute.  Not  only  is  it  defined,  there  are  specific  references  to  it  throughout  the  statute. 


 For  example,  the  Commission  under  its  discretion  can  extend  universal  service  obligations  to  providers  that  use  telecommunications  who  are  not  telecommunications  carriers  (who  must  contribute  to 
 universal  service).  This  indicates  Congress  recognized  classes  of  services,  other  than  telecommunications  service  that  may  have  to  be  reached  by  Commission  discretion,  rather  than  mandatory  application  under 
 the  statute.  Similarly,  the  schools  and  libraries  provisions  make  specific  reference  to  information  services  as  being  covered  by  the  provision,  entitling  schools  and  libraries  to  discounted  service.  Or,  one  can  look 
 at  the  network  sharing  provision  of  Section  259  and  see  specific  reference  to  information  service  as  well  as  telecommunication  services. 


 1  See  Communications  Act    621  (c),  47  U.  S.  C.    541  (c) 
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 III.  The  Classification  Is  Not  An  Exercise  In  Regulatory  Free  Will 
 The  Commission  does  not  have  unconstrained  discretion  to  pick  its  preferred  definition  or  classification,  as  some  imply.  The  Commission  must  attempt  to  faithfully  apply  the  statutory  definition  to 
 a  service,  based  on  the  nature  of  the  service,  including  the  technology  used  and  its  capabilities,  and  the  nature  of  the  interactive  experience  for  the  consumer.  This  is  complex  and  subject  to  considerable 
 debate  and  .  .  .  appropriately  left  to  the  expertise  of  the  FCC.  2 
 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.  That  would  be  contrary  to  law. 
 The  Commission  must  apply  the  definition  and  then  accept  the  regulatory  regime  that  adheres  to  that  classification  and  that  which  Congress  chose  when  it  adopted  the  statute. 


 IV.  Commission  Is  Not  Neutered  By  This  Classification 
 The  Commission  is  not  left  powerless  to  protect  the  public  interest  by  classifying  cable  modem  service  as  an  information  service.  Congress  invested  the  Commission  with  ample  authority  under  Title  I. 
 That  provision  has  been  invoked  consistently  by  the  Commission  to  guard  against  public  interest  harms  and  anti-  competitive  results. 


 It  was  this  Commission  that  promulgated  Computer  I,  Computer  II  and,  Computer  III,  (all  under  Title  I)  in  an  effort  to  protect  against  public  interest  harms,  all  with  the  blessing 
 of  judicial  review  and  court  sanction  of  its  ancillary  authority.  Additionally,  Title  VI  is  a  direct  progeny  of  the  Commissions  assertion  of  jurisdiction  over  cable  services  under  its  Title  I  authority  and  has 
 regulated  cable  extensively  for  a  number  of  years  under  that  authority.  This  exercise,  too,  was  approved  by  the  Supreme  Court  as  within  the  congressional  scheme.  3 


 There  is  no  basis  to  conclude  that  Title  I  is  inadequate  to  strike  the  right  regulatory  balance.  The  Commissions  willingness  to  ask  searching  questions  about  competitive  access,  universal  service  and 
 other  important  policy  issues  demonstrates  its  commitment  to  explore,  evaluate  and  make  responsible  judgments  about  the  regulatory  framework. 


 2  MediaOne  Group,  Inc.  v.  County  of  Henrico,  257  F.  3d  356  (4  th  Cir.  2001). 
 3  United  States  v.  Southwestern  Cable  Co.,  392  U.  S.  157  (1968). 
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 SEPARATE  STATEMENT  OF  COMMISSIONER  KATHLEEN  Q.  ABERNATHY 
 Re:  Inquiry  Concerning  High-  Speed  Access  to  the  Internet  Over  Cable  and  Other  Facilities;  Internet  Over  Cable  Declaratory  Ruling  Proceeding;  Appropriate  Regulatory  Treatment  for  Broadband  Access  to 
 the  Internet  Over  Cable  Facilities,  GN  Docket  00-  185. 
 The  declaratory  ruling  we  adopt  today  provides  the  long-  awaited  answer  to  a  pivotal  question:  What  is  the  appropriate  regulatory  classification  of  cable  modem  service?  I  am  pleased  that  this  item  will 
 end  the  regulatory  uncertainty  that  has  led  to  divergent  interpretations  of  the  Act  by  the  courts  of  appeals  and  that  may  well  have  hampered  the  deployment  of  cable  modem  facilities  and  the  introduction  of  these 
 services  to  consumers.  I  commend  the  Cable  Services  Bureau  and  my  fellow  commissioners  for  developing  an  analytical  framework  that  not  only  represents  the  best  reading  of  the  Act  but  also  serves 
 important  public  policy  objectives.  Classifying  cable  modem  service  as  an  information  service  will  promote  our  goal  of  fostering  a  minimal  regulatory  environment  that  promotes  investment  and 
 innovation  in  a  competitive  market.  1  It  also  provides  the  opportunity  to  create  a  more  consistent  regulatory  framework  across  technological  platforms. 


 As  we  have  done  in  the  Wireline  Broadband  NPRM,  I  believe  it  is  important  to  seek  comment  on  the  appropriateness  of  wholesale  access  obligations.  It  may  turn  out  that  marketplace  developments 
 concerning  multiple  ISP  access  will  make  regulatory  intervention  unnecessary.  Most  of  the  factors  that  cable  operators  had  formerly  cited  as  impediments  to  offering  consumers  a  choice  of  ISPs    exclusive 
 contracts  with  affiliated  ISPs  and  technical  feasibility  concerns,  for  example    appear  to  have  been  resolved.  Accordingly,  in  addition  to  AOL  Time  Warner,  which  offers  a  choice  of  ISPs  pursuant  to 
 merger  conditions  imposed  by  the  Federal  Trade  Commission,  Comcast  and  AT&  T  Broadband  have  announced  agreements  under  which  they  will  provide  consumers  with  a  choice  of  ISPs,  and  Cox  is 
 conducting  technical  trials.  I  also  hope  that  the  declaratory  ruling  we  adopt  today  will  provide  a  blueprint  for  cable  operators  that  seek  to  negotiate  additional  access  arrangements  with  independent  ISPs.  By 
 establishing  that  cable  operators  may  enter  into  access  arrangements  with  independent  ISPs  on  a  private  carriage  basis,  our  ruling  makes  clear  that  cable  operators  can  provide  choice  without  necessarily 
 subjecting  themselves  to  common  carrier  regulation. 
 Overall,  however,  while  these  marketplace  developments  and  our  clarification  of  the  legal  regime  provide  a  basis  for  optimism,  I  remain  concerned  that  some  cable  operators  may  continue  to  offer 
 consumers  only  a  single  brand  of  ISP  service  or  that  cable  operators  generally  may  offer  only  two  or  three  options.  As  the  owners  of  the  nations  most  extensive  broadband  architecture  and  as  the  leading 
 providers  of  broadband  service,  cable  operators  have  the  potential  to  suppress  competition.  I  believe  that  the  Commission  should  not  yet  dismiss  proposals  to  impose  some  kind  of  access  requirement  without 
 better  evidence  that  robust  competition  among  broadband  ISPs  will  develop  on  its  own. 
 The  interrelation  of  this  proceeding  and  the  Wireline  Broadband  NPRM  is  a  critical  part  of  my  decision  to  seek  further  comment  on  whether  to  impose  an  access  obligation  on  providers  of  cable  modem 
 service.  Cable  modem  and  DSL  providers  appear  to  be  competing  in  a  converged  broadband  marketplace,  yet  DSL  providers  alone  are  subject  to  a  series  of  unbundling  and  nondiscrimination 
 requirements  under  Computer  II/  III.  I  therefore  believe  that  it  would  be  inappropriate  for  the  Commission  not  even  to  consider  imposing  access  obligations  on  cable  operators.  I  recognize  that  there  are  substantial 
 differences  in  the  historical  treatment  of  wireline  common  carriers  and  cable  operators,  and  that  it  may  not  be  appropriate  or  even  within  our  statutory  authority  to  seek  complete  parity  in  our  regulatory 


 1  Appropriate  Framework  for  Broadband  Access  to  the  Internet  Over  Wireline  Facilities;  Universal  Service 
 Obligations  of  Broadband  Providers,  CC  Docket  No.  02-  33,  Notice  of  Proposed  Rulemaking    5-  6  (rel.  Feb.  15,  2002)  (  Wireline  Broadband  NPRM). 
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 treatment  of  broadband  services  provided  over  the  wireline  and  cable  platforms.  2  Nevertheless,  we  are  faced  with  a  single  overarching  question  with  respect  to  each  service:  What  is  the  appropriate  role  for  the 
 Commission  in  ensuring  that  consumers  receive  the  benefits  of  competition  and  choice?  If  the  Commission  decides  to  maintain  some  form  of  access  obligation  at  the  conclusion  of  the  Wireline 
 Broadband  proceeding,  we  would  need  to  develop  a  compelling  rationale  if  we  were  to  refrain  from  imposing  an  analogous  requirement  on  cable  operators. 


 Finally,  I  am  pleased  that  the  Commission  has  decided  to  tackle  the  challenging  questions  relating  to  state  and  local  jurisdiction  over  cable  modem  services.  We  must  balance  the  legitimate  role  of  local 
 franchising  authorities  in  managing  rights-  of-  way  against  the  risk  that  excessive  regulation  will  hamper  efforts  by  cable  operators  to  upgrade  plant  and  roll  out  new  broadband  services.  I  believe  that  our  state 
 and  local  colleagues  have  no  desire  to  erect  regulatory  barriers  that  would  thwart  our  efforts  to  encourage  the  deployment  on  a  reasonable  and  timely  basis  of  advanced  telecommunications  capability 
 to  all  Americans.  3  I  look  forward  to  working  closely  with  local  franchising  authorities  and  their  representative  associations  so  that  we  can  cooperatively  establish  appropriate  guidelines  for  right-  of-  way 
 management. 


 2  I  encourage  commenters  to  provide  detailed  arguments  on  our  statutory  authority  to  impose  a  cable  access 
 requirement,  including  in  particular  the  provisions  of  the  Act  that  might  support  our  exercise  of  ancillary  authority  under  section  4(  i).  I  note  that,  while  the  Commission  relied  on  that  provision  in  adopting  the  Computer  Inquiry 


 requirements,  there  may  be  a  greater  nexus  between  those  requirements  and  the  provisions  of  Title  II  than  exists  between  a  cable  access  requirement  and  other  affirmative  grants  of  authority. 
 3  Telecommunications  Act  of  1996,    706,  47  U.  S.  C.    157  note. 
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 DISSENTING  STATEMENT  OF  COMMISSIONER  MICHAEL  J.  COPPS 
 In  the  Matter  of  Inquiry  Concerning  High-  Speed  Access  to  the  Internet  Over  Cable  and  Other  Facilities 
 Internet  Over  Cable  Declaratory  Order  Proceeding  Appropriate  Regulatory  Treatment  for  Broadband  Access  to  the  Internet  Over  Cable  Facilities, 
 GN  Docket  00-  185 


 Just  one  month  ago,  the  Commission  adopted  a  Notice  of  Proposed  Rulemaking  regarding  the  classification  of  broadband  services  delivered  by  wireline  providers  (  Wireline  Broadband  NPRM).  I 
 dissented  from  that  Notice  and  expressed  concern  that  some  might  read  that  Notice  and  conclude  that  the  Commission  had  a  predetermined  agenda  to  deregulate  dominant  providers  in  the  market.  The  spate  of 
 newspaper  stories  and  magazine  articles  in  the  intervening  month  bears  out  the  concern  that  I  expressed.  Many  analysts  and  observers  have  concluded  exactly  that.  Today,  I  am  afraid  the  Commission  reinforces 
 these  conclusions.  After  just  four  weeks,  and  before  comments  have  even  been  received  in  the  Wireline  Broadband  proceeding,  we  embark  on  a  very  similar  path  for  cable  modem  services,  only  this  time  we 
 leapfrog  from  a  generalized  Notice  of  Inquiry  to  an  extraordinarily  far-  reaching  Declaratory  Ruling. 
 I  cannot  support  either  the  timing  of  the  Declaratory  Ruling  or  its  conclusions,  which  create  dangerous  uncertainty  in  the  growing  market  for  cable  broadband  services.  I  sympathize  with  the 
 concerns  of  cable  system  operators,  local  franchising  authorities,  and  others  about  the  lack  of  regulatory  clarity  in  this  area.  But  this  Declaratory  Ruling  does  not  provide  the  certainty  sought  by  these  entities, 
 instead  placing  cable  modem  services  into  the  regulatory  uncertainty  of  Title  I. 
 The  decision  the  Commission  will  make  today  strays  far  afield  from  the  regulatory  construct  established  by  Congress.  Congress  provided  statutory  frameworks  for  cable  and  for  telecommunications 
 carriers  under  Title  VI  and  Title  II,  respectively.  The  statute  makes  clear  that,  to  the  extent  that  a  cable  operator  serves  as  a  common  carrier  subject  to  the  provisions  of  Title  II,  the  regulations  prescribed  by 
 Title  VI  do  not  apply.  Similarly,  a  telecommunications  carrier  generally  regulated  under  Title  II  is  subject  to  the  obligations  in  Title  VI  to  the  extent  it  is  providing  a  cable  service.  So  the  statutory  provisions 
 accommodate  cable  system  operators  delivery  of  new  or  hybrid  services,  even  where  those  services  may  not  fit  neatly  into  the  existing  regulatory  classifications.  For  example,  there  is  widespread  agreement  that 
 telephony  provided  over  the  cable  plant  is  subject  to  Title  II  regulation.  A  powerful  case  has  been  made  that  cable  modem  services  should  also  be  subject  to  Title  II. 


 Video  services  provided  over  the  telephone  system  are  subject  to  Title  VI.  Were  cable  modem  services  similarly  subject  to  Title  VI,  provisions  governing  general  franchising  authority,  the  ability  of 
 local  authorities  to  assess  franchise  fees,  and  the  cap  on  such  fees  would  continue  to  apply. 
 But  under  the  classification  scheme  adopted  today,  the  categorizations  become  much  more  difficult.  For  example,  is  IP  telephony  subject  to  Title  II  as  is  cable  telephony,  or  Title  I,  as  is  cable 
 modem  service?  Is  video  streaming  over  cable  modem  service  subject  to  Title  VI  as  are  traditional  video  services  delivered  by  cable  systems,  or  is  that  too  now  subject  to  the  vagaries  of  Title  I? 


 The  Ruling  will  force  cable  modem  services  into  the  generally  deregulated  information  services  category,  subject  only  to  the  Commissions  ancillary  jurisdiction  of  Title  I.  I  cannot  conceive  that 
 Congress  intended  to  remove  from  its  statutory  framework  core  communications  services  such  as  the  one  at  issue  in  this  proceeding.  I  cannot  imagine  that  it  envisioned  its  statutory  handiwork  being  made 
 obsolete  by  a  new  service  offering. 
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 But  make  no  mistake    todays  decision  places  these  services  outside  any  viable  and  predictable  regulatory  framework.  First,  it  concludes  that,  as  a  statutory  matter,  cable  modem  services  are  not  cable 
 services.  Next,  it  concludes  that  cable  operators  providing  cable  modem  services  over  their  own  facilities  are  not  offering  telecommunications  services  because  subscribers  are  purchasing  only  information 
 services.  This  is  the  same  forced  analysis  the  Commission  tentatively  reached  in  the  Wireline  Broadband  NPRM.  Those  who  conclude  that  the  Commission  has  now  resolved  that  particular  proceeding  after  just 
 one  month  may  be  pardoned. 
 Next,  the  Commission  addresses  the  situation  in  which  a  cable  operator  offers  its  cable  modem  service  as  an  input  provided  to  an  unaffiliated  ISP.  Although  the  decision  concludes  that  the  record 
 provides  insufficient  information  to  determine  whether  cable  operators  are  offering  pure  transmission  services  to  ISPs,  the  majority  determines    with  scant  analysis    that  it  expects  that  any  cable  operators 
 that  offer  pure  telecommunications  in  the  future  would  be  offering  only  private  carriage.  Doesnt  insufficient  information  mean  that  the  Commission  should  refrain  from  broad  pronouncements  until  it  can 
 acquire  the  necessary  data? 
 Finally,  the  Commission  dismisses  out  of  hand  the  argument  raised  in  the  record  that  the  Commissions  current  rules  by  their  terms  require  cable  operators  to  offer  access  to  unaffiliated  Internet 
 providers.  These  rules  require  carriers  that  offer  transmission  capacity  using  wire  or  radio  to  offer  transmission  services  to  competing  information  service  providers.  1  This  policy  has  been  key  to  the 
 development  of  a  competitive  information  services  market.  The  Ruling,  however,  concludes  with  scant  analysis  that  these  access  requirements  only  apply  to  wireline  telephone  companies. 


 The  Ruling  seems  uneasy  with  its  own  conclusions.  Just  in  case  we  are  wrong,  and  access  requirements  were  to  apply,  they  are  waived,  on  the  Commissions  own  motion,  with  neither  notice  nor 
 comment.  And  if  even  that  stretch  somehow  fails  to  get  the  point  across,  the  NPRM  adopted  today  also  takes  steps  to  ensure  that  these  services  remain  deregulated  in  the  face  of  any  court  opinion  to  the 
 contrary.  Even  if  cable  modem  services  are  found  by  the  courts  to  be  subject  to  regulation,  the  Commission  would  forbear  from  enforcing  those  obligations.  So,  in  this  analysis  the  majority  makes  a 
 determination,  but  just  in  case  it  got  the  determination  wrong,  it  waives  the  rule  it  determined  did  not  apply,  and,  should  the  courts  disagree,  we  simply  forbear  from  enforcing  the  rule.  Thats  a  far  distance 
 down  the  road  from  the  simple  NOI  we  are  working  from,  isnt  it? 
 Once  the  Ruling  has  reached  its  desired  result  to  remove  these  services  from  regulatory  requirements,  we  are  then  told  not  to  worry    the  Commission  can  build  its  own  regulatory  framework 
 under  its  ancillary  jurisdiction.  Years  ago,  when  I  worked  on  Capitol  Hill,  we  used  to  worry  about  legislation  on  an  appropriations  bill.  Down  here,  Im  learning  that  I  have  to  look  out  for  legislation  on  an 
 NPRM. 
 The  NPRM  adopted  by  the  Commission  today  raises  the  further  question    also  addressed  in  a  tentative  conclusion  in  the  Wireline  Broadband  NPRM    as  to  whether  cable  modem  services  should  be 
 subject  to  an  access  requirement.  The  majority  notes  that  certain  cable  system  operators  have  recently  begun  to  enter  into  carriage  agreements  with  unaffiliated  ISPs.  While  this  progress  is  worth  noting,  I 
 would  also  note  that  such  agreements  are  quite  new,  are  generally  limited  to  the  largest  cable  systems,  and  are  generally  offered  to  only  one  or  two  unaffiliated  ISPs.  Thus,  while  there  has  been  some  promising 
 movement  in  the  direction  of  multiple  ISP  access,  the  progress  has  been  slow  and  the  course  is  far  from  set.  The  effect  of  this  deliberate  pace  has  been  to  deny  many  consumers  access  to  more  than  one  ISP    a 


 1  See  47  U.  S.  C.    153(  10).  In  light  of  this  broad  definition  of  common  carrier,  Congress  expressly  exempted  cable 
 services  regulated  under  Title  VI  from  regulation  as  a  common  carrier.  47  U.  S.  C.    541(  c). 
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 circumstance  that  recently  proved  a  near-  disaster  when  the  one  ISP  carried  by  some  of  the  nations  largest  cable  systems  abruptly  closed  its  doors. 
 I  am  pleased  that  the  majority  recognizes  in  theory  the  ability  of  the  Commission  to  impose  an  access  requirement  even  under  its  reading  of  the  statute.  I  am  not,  however,  sanguine  that  we  will  ever 
 get  there  in  practice.  I  do  believe  that  some  access  requirement  is  necessary  in  order  to  ensure  that  consumers  have  choices  of  ISPs.  It  strikes  me  as  ironic  that  without  such  a  requirement  the  Internet   
 which  grew  up  on  openness    may  become  the  province  of  dominant  carriers,  able  to  limit  access  to  their  system  to  all  but  their  own  ISPs.  I  would  like  to  hear  from  a  multiplicity  of  stakeholders  what  they 
 believe  the  nature  of  a  multiple  ISP  requirement  should  be,  how  it  could  be  implemented,  and  what  other  regulatory  or  public  interest  implications  would  accompany  the  imposition  of  such  a  requirement. 


 Today  we  take  a  gigantic  leap  down  the  road  of  removing  core  communications  services  from  the  statutory  frameworks  established  by  Congress,  substituting  our  own  judgment  for  that  of  Congress  and 
 playing  a  game  of  regulatory  musical  chairs  by  moving  technologies  and  services  from  one  statutory  definition  to  another.  Last  month  I  remarked  that  in  our  Wireline  Broadband  proceeding,  we  were  out-driving 
 the  range  of  our  headlights.  Today  I  think  we  are  out-  flying  the  range  of  our  most  advanced  radar. 


 Let  me  repeat  my  serious  misgivings  about  not  just  the  propriety,  but  the  wisdom  of  the  Commission  proceeding  directly  from  a  general  Notice  of  Inquiry  to  the  adoption  of  such  far-  reaching 
 conclusions  in  so  important  an  area  of  national  policy.  How  America  deploys  broadband  is  the  central  infrastructure  challenge  our  country  faces.  It  is  a  public  policy  matter  of  enormous  implications.  How  we 
 get  it  done  affects  not  only  how  many  megabytes  of  information  our  computers  can  download,  but  what  kinds  of  options  consumers  will  be  able  to  choose  from,  what  kinds  of  protections  they  will  have  against 
 misguided  or  fraudulent  business  practices,  and  what  kinds  of  opportunities  will  be  available  to  those  in  our  society  who  do  not  share  fully  in  our  general  prosperity.  With  so  much  at  stake,  I  would  have  hoped 
 for  a  little  more  modesty  and  measured  pace  on  our  part. 
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