Broadband Decision Pleases Vendors, Irks Some IT Pros
Supreme Court says cable operators don't have to share lines
July 4, 2005 (Computerworld)
The Supreme Court's ruling on broadband Internet access policies last week won praise from network operators. But it was condemned by consumer groups as well as some businesses that use broadband connections for remote and home office connections and for WAN backup links.
"I don't understand how the ruling could mean there will be more competition to foster more growth of broadband," said Jay Shell, a senior telecommunications specialist at a Michigan-based bank with 300 branches and mortgage offices nationwide. Shell, who asked that the bank not be named, called the court's decision "a wolf in sheep's clothing" and predicted that the cost of broadband services "absolutely" will go higher.
The court ruled in a 6-3 vote that cable companies don't have to let rivals offer high-speed Internet access over their lines. The majority said that because the law on the matter is ambiguous, the courts should defer to the authority of the Federal Communications Commission, which in 2002 classified cable-based broadband as an "information service" that isn't subject to telephone network-access regulations. An appeals court had previously ruled against the FCC.
After the Supreme Court overturned the lower-court ruling, FCC Chairman Kevin Martin called for immediate steps to create parity for telephone companies by dropping the current requirements that they must sell access to their Digital Subscriber Line networks to rival vendors.
Noting that DSL and cable-modem technologies are used by many businesses for network backup and as a primary means of communication by small offices, Shell said IT managers need more broadband offerings to expand their network choices. Using broadband is much cheaper than installing T1 connections, added Shell, who is also a vice chairman of the Enterprise Networking Technologies Users Association (ENTUA) in Lake Grove, N.Y.
George Waters, director at large of the TCA user group in Sacramento, said there isn't enough broadband competition, especially in rural markets. "When you want to get service to small offices in rural areas, you're stuck," he said, noting his recent experience as a communications manager for the government of Sonoma County, Calif., where he had to provision dozens of sheriffs' offices.
Terri Staggs, ENTUA's president and a senior telecommunications analyst at National Gypsum Co.
Building out broadband access is important to workers trying to run applications from their homes and also will be vital for voice-over-IP rollouts, said Staggs, whose user group includes members from more than 70 large companies.
Several consumer groups urged Congress to clarify the laws related to broadband access in order to ensure that customers have choices, arguing that the issue will affect businesses as well as residential customers. The FCC, with the Supreme Court's endorsement, is creating "an oligarchy run by the cable and telephone companies," said Ed Mierzwinski, consumer program director for U.S. Public Interest Research Groups in Washington.
In contrast, the Telecommunications Industry Association (TIA) in Arlington, Va., said the ruling will promote the expansion of broadband access. "Broadband is the new frontier, and we feel the cable and phone industries need to have [the ability] to get return on investment," said Grant Seiffert, vice president of external affairs at the TIA.
Adi Kishore, an analyst at The Yankee Group in Boston, agreed that the ruling means customers will have fewer choices. But ultimately, it will give cable and telephone companies the incentive to invest in faster networks and more applications, Kishore said.
Colleen Boothby, an attorney at Washington-based Levine, Blaszak, Block & Boothby LLP who represented the TIA in the case, said that if the ruling had gone the other way, any provider of network services could have been subject to regulations and associated taxes and fees.
But Boothby also said that the next steps by the FCC will have to be watched carefully, because a "duopoly" of cable and telephone companies isn't competitive enough.