June 29, 2005
The Supreme Court decision giving cable companies exclusive use of their Internet circuits has the telephone companies in a dither, since they are required to sublease their DSL lines to rival Internet service providers. But fear not: the Federal Communications Commission (FCC) is racing to the rescue.
FCC Chairman Kevin Martin says the Commission will move quickly to restore "regulatory parity" between telephone and cable companies. But whether Martin will be able to deliver on his promise is unclear. There is one vacancy on the five-member commission and filling the four occupied seats are two Democrats and two Republicans.
It's not at all clear that the Democrats will want to endorse the Bush Administration's broadband strategy, which basically calls for splitting the market between the big phone companies and the big cable companies.
The Democrats have tended to listen sympathetically to consumer groups who argue that having essentially two broadband providers per market is anti-consumer, while the Republicans resonate to the property rights argument; the high-speed lines are, after all, owned by the phone and cable companies.
Cable and phone companies contend that they have little incentive to invest billions of dollars to upgrade their networks if they must then turn around and sell discounted access to such competitors as AOL, Earthlink and COVAD.
