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FCC considers 'Net cable
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September 8, 1998: 12:25 p.m. ET
Report examines U.S. regulation of Internet service over cable wires
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NEW YORK (CNNfn) - The Federal Communications Commission, which has been in favor of lifting some telecommunications restrictions to facilitate high-speed Internet access to homes, is considering regulatory issues concerning Internet services delivered over cable-television wires.
In a "working paper" released last week, Barbara Esbin, associate bureau chief at the FCC's cable services bureau, said the commission faces a problem in how to treat cable-based Internet services as the boundaries blur among Internet, cable and telephone services.
In July, the FCC said it was close to recommending that the big local telephone companies be allowed to build data systems without having to resell their use to competitors. That decision was intended to facilitate the delivery of high-speed Internet access to homes through broadband services.
Internet access over cable has been gaining momentum because cable wires can carry data to personal computers up to 100 times faster than copper phone wires. The FCC now is mulling whether Internet service over cable is a "cable service," a "telecommunications service" or an "information service."
If Internet service via cable wires is considered a cable service, Esbin said, it would fall under Title VI of the Communications Act, making it subject to FCC regulation. If the services were to be categorized as information, however, it would be exempt from regulation.
"When a single provider offers all three types of services in digital format over primarily fiber optic broadband plant, how these categories will apply is questioned," Esbin wrote. "Ultimately, the FCC (and perhaps Congress) may need to develop a new regulatory paradigm and language that fits the new global communications medium known as the Internet."
Esbin made particular note of the recently proposed merger of telecommunications giant AT&T Corp. (T) and cable titan Tele-Communications Inc. (TCOMA). The combined company plans to offer cable-based Internet access through TCI's @Home Corp. (ATHM) venture.
"The FCC could reasonably conclude that cable Internet-based services, such as Road Runner, @Home and like offerings, when provided by a cable operator over its cable system in its franchised service area, come within the definition of 'cable services' under Title VI," Esbin wrote. (Road Runner is a unit of Time Warner Inc. (TWX), which is also CNNfn's parent company.)
Esbin pointed out, however, that such a classification could create additional problems regarding how to regulate telephony-based Internet services.
Esbin noted that the purpose of the paper was to stimulate discussion rather than advocate a particular remedy. 
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