Selective Timeline of Key Events Regarding Regulation of ...



From PLI’s Course Handbook

Cable Television Law 2009: Competition in Video, Internet & Telephony

#18101

17

key events regarding regulation

of internet services, an

admittedly selective timeline

Jim Casserly

Ryan Wallach

Anna Sucin

Willkie Farr & Gallagher LLP

James L. Casserly is a partner in the Telecommunications Department of Willkie Farr & Gallagher LLP in Washington, D.C. Mr. Casserly specializes in communications policy and transactional matters, with particular emphasis on the cable industry, including high-speed cable Internet service, interactive television, digital television, competition policies, and ownership issues.

Prior to joining Willkie, Mr. Casserly was a partner at Mintz Levin Cohn Ferris Glovsky and Popeo, P.C., and at Squire, Sanders, and Dempsey. From 1994 to 1999, Mr. Casserly served as Senior Legal Advisor to FCC Commissioner Susan Ness. As top advisor to the senior Commissioner, he was active in deliberations concerning the full scope of matters arising before the FCC, ranging from competitive safeguards and intercarrier compensation to spectrum auctions and children’s television programming. He was also integrally involved in all aspects of the agency’s implementation of the Telecommunications Act of 1996, with particular attention to local telephone competition, universal service, and federal-state jurisdictional relationships. His duties at the FCC included strategic planning, congressional and executive branch liaison, legal and political analysis, negotiations, speechwriting, and media relations.

Earlier, Mr. Casserly clerked at what is now the U.S. Court of Appeals for the Federal Circuit and the U.S. Court of Federal Claims.

He is a graduate of Tufts College, A.B. 1973, magna cum laude and Columbia Law School, J.D. 1976, which he was a Harlan Fiske Stone Scholar and a Teaching Fellow in Civil Procedure.

Key Events Regarding Regulation of Internet Services

An Admittedly Selective Timeline

by Jim Casserly, Ryan Wallach, and Anna Sucin

September 1995

Approximately 17.5 million Americans access the Internet from work or home, and virtually all of them do so by way of a dial-up connection with a top speed of 56 thousand bits per second (kbps).

See Humphrey Taylor, Internet Penetration at 66% of Adults (137 Million) Nationwide, Table 4, The Harris Poll #18, Apr. 17, 2002, available at .

“The noisiest buzz in the industry lately has been over the emerging use of cable TV systems to provide fast network data transmissions using a device called a cable modem. But the likelihood of this technology succeeding is zilch.”

John C. Dvorak, The Looming Cable Modem Fiasco, PC Magazine, Sept. 12, 1995, at 89 (emphasis added).

February 1996

Telecommunications Act of 1996 declares it to be the policy of the United States 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.”

47 U.S.C. § 230(b)(2) (emphasis added).

1996

Intel founder and CEO Andy Grove predicts that cable modems will not be a viable Internet delivery system in the near future. Cable industry decides, nonetheless, to invest billions of dollars of private risk capital in the hope that he would be proved wrong.

See Thomas P. Southwick, Cable Television, The First 50 Years, Cable World, Sept. 1998, at S1 (reporting that, at an industry meeting in 1996, Andy Grove “said there was little reason to expect cable would be a viable delivery system for Internet access in the near future”).

The rare household that had an exceptional need for higher speeds theoretically had the ability to subscribe to a Trunk Level 1 (T-1) line from a telephone company, but this was a cost-prohibitive option.

Cable Services Bureau, FCC, Broadband Today: A Staff Report to William E. Kennard, Chairman, Federal Communications Commission, on Industry Monitoring Sessions Convened by the Cable Services Bureau 27 (Oct. 13, 1999), available at MACROBUTTON HtmlResAnchor .

January 1997

Chief Technologist of Bell Communications Research tells FCC bandwidth forum that 150 kbps ISDN is all that consumers can expect -- or will need -- for next 5-10 years.

See Testimony of Stagg Newman, Vice President, Network Technology and Architecture, Applied Research, Bellcore, Bandwidth Forum, Federal Communications Commission 11, 14 (Jan. 23, 1997), available at .

1997

Cable operators invest over $6 billion to deploy two-way broadband via high-speed cable modems.

The NCTA “states that the cable industry spending on the deployment of two-way broadband via high-speed cable modems in 1997 alone totaled $6 billion…. Comcast [ ] has spent over $1.2 billion to upgrade its plant, in part to provide broadband services.” 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, Report, 14 FCC Rcd 2398 ¶ 37 (1999) (“First Section 706 Report”).

1998

Consumer groups argue that cable modem service must be regulated or cable will choke off consumers’ freedom to access content.

“If the Commission takes no action at this time, . . . nothing will prevent cable operators from limiting content their subscribers see via the Internet in the same way that cable operators select cable channels today.” Center for Media Education et al. Reply Comments in First 706 Inquiry, CC Docket No. 98-146, at 15 (Oct. 10, 1998).

Broadband Internet access will be available only through proprietary portals that are under the “exclusive editorial and commercial control” of cable operators who will censor content, control “[p]lacement of news, entertainment, information, hyperlinks, and commerce” on the portal, and impose content restrictions or filtering on the basis of technical, aesthetic, and commercial factors. Consumers Union et al. Petition to Deny the Merger of AT&T and TCI, CS Docket No. 98-178, at 14-15 (Oct. 29, 1998).

January 1999

FCC reports that 375,000 residential consumers are purchasing broadband services and that the broadband marketplace should remain unregulated.

“[W]e need to be particularly careful about any action we take to promote broadband deployment, given the nascent nature of the residential market for broadband…. Moreover, some actions could contravene the intent of section 706 that our broadband policy be technology-neutral and could skew a potentially competitive marketplace…. There appears to be a significant initial demand for broadband in the consumer market -- at least 375,000 paying customers. In addition, the first survey of which we are aware shows that customers are highly satisfied with the most popular form of residential broadband service on offer today, cable modem broadband service.”

First Section 706 Report ¶¶ 74, 80, 88.

January 2001

The merger of AOL and Time Warner is delayed while the Commission considers consumer advocates’ insistent pleas that a condition be adopted to prevent some wholly imaginary and anticipated harm with regard to “advanced [instant-messaging]-based applications.”

In re 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, Memorandum Opinion and Order, 16 FCC Rcd. 6547 ¶ 18 (2001).

Less than two years later, the condition was quietly abandoned, with nary a word from any of the consumer advocates who deemed it so essential and only two former FCC staffers who worked on the team that imposed it opposing its abandonment.

See In re 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; Petition of AOL Time Warner Inc. for Relief From the Condition Restricting Streaming Video AIHS, Memorandum Opinion and Order, 18 FCC Rcd. 16835 (2003).

March 2002

FCC determines in declaratory ruling that cable modem service is an integrated interstate information service subject only to Title I of the Communications Act; companion NPRM inquires what regulations, if any, are needed.

See 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, Declaratory Ruling and Notice of Proposed Rulemaking, 17 FCC Rcd 4798 (2002) (“Cable Modem Declaratory Ruling and NPRM”), aff’d, Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005).

June 2002

Amazon urges the FCC to impose open access requirements on cable operators and adopt rules that “bar parties . . . from impeding consumer access to information, products, and services.” Amazon claims that “[t]he most draconian manner to impede consumer access to Internet-based information, products, or services is to block or redirect connections to specific website addresses.”

“For example, a consumer who tries to direct her browser to might, because her ISP has blocked access, receive a ‘site not found’ message. The incentive to do this would be obvious if the ISP also had a pizza operation. Alternatively, the consumer trying to reach might be directed to [or] an ISP could provide differing service quality levels depending on the website from which information, products, or services are accessed.”

Comments of , CS Docket No. 02-52, at 6-7 (June 17, 2002).

October 2003

U.S. Court of Appeals for the Ninth Circuit overturns Cable Modem Declaratory Ruling, finding that cable modem service is a telecommunications service subject to Title II regulation.

Brand X Internet Servs. v. FCC, 345 F.3d 1120 (9th Cir. 2003), rev’d and remanded, Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005).

February 2004

Chairman Powell articulates Four “Internet Freedoms.”

“First, consumers should have access to their choice of legal content… Second, consumers should be able to run applications of their choice…. Third, consumers should be permitted to attach any devices they choose to the connection in their homes…. Fourth, consumers should receive meaningful information regarding their service plans.”

Remarks of Michael K. Powell, Chairman, FCC, at the Silicon Flatirons Symposium on The Digital Broadband Migration: A Regime for the Internet Age, Univ. of Colorado Sch. of Law, Boulder, Colorado, at 5 (Feb. 8, 2004) (as prepared for delivery), available at

October 2004

FCC determines that broadband over power line systems is an integrated interstate information service.

See Amendment of Part 15 Regarding New Requirements and Measurement Guidelines for Access Broadband over Power Line Systems; Carrier Current Systems, Including Broadband over Power Line Systems, Report and Order, 19 FCC Rcd 21265 (2004).

June 2005

Supreme Court overturns Ninth Circuit and reinstates Cable Modem Declaratory Ruling.

Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005), subsequent history omitted.

August 2005

FCC adopts Internet Policy Statement. Statement says Commission is “not adopting rules” but only “principles [that] are subject to reasonable network management.”

The four principles are as follows: “[C]onsumers are entitled to access the lawful Internet content of their choice…. [C]onsumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement…. [C]onsumers are entitled to connect their choice of legal devices that do not harm the network…. [C]onsumers are entitled to competition among network providers, application and service providers, and content providers.”

In re Appropriate Framework for Broadband Access to the Internet over Wireline Facilities, Policy Statement, 20 FCC Rcd. 14986 ¶ 4 & n.15 (2005) (“Internet Policy Statement”).

In his comments on the Internet Policy Statement, Chairman Martin says “policy statements do not establish rules nor are they enforceable documents.”

FCC, News Release, Chairman Kevin J. Martin Comments on Commission Policy Statement (Aug. 5, 2005), available at .

September 2005

FCC determines that Digital Subscriber Line and other wireline broadband services are integrated interstate information services (but telcos allowed to provide as Title II offerings if they choose). FCC also issues NPRM to consider (again) what rules, if any, should be applied to broadband Internet.

See Appropriate Framework for Broadband Access to the Internet over Wireline Facilities et al., Report and Order and NPRM, 20 FCC Rcd 14853 (2005).

December 2006

“We continue to believe [an additional net neutrality principle] is not necessary and may impede infrastructure deployment.”

In re AT&T Inc. and BellSouth Corp. Application for Transfer of Control, Memorandum Opinion & Order (Joint Statement of Chairman Kevin J. Martin and Commissioner Deborah Taylor Tate), 22 FCC Rcd. 5662, 5827 (2007).

March 2007

FCC determines that wireless broadband is an integrated interstate information service.

See Appropriate Regulatory Treatment for Broadband Access to the Internet over Wireline Networks, Declaratory Ruling, 22 FCC Rcd 5901 (2007).

April 2007

FCC issues broadband industry practices Notice of Inquiry to learn what broadband providers are doing and to consider whether to initiate a rulemaking proceeding.

The FCC asks “for specific examples of beneficial or harmful behavior,” “whether any regulatory intervention is necessary,” and whether it has “the legal authority to enforce the Policy Statement in the face of particular market failures or other specific problems.”

Broadband Industry Practices, Notice of Inquiry, 22 FCC Rcd 7894, ¶¶ 1, 11 (2007).

November 2007

Free Press Accuses Comcast of “violating Internet Policy Statement.”

See Petition of Free Press et al. for Declaratory Ruling that Degrading an Internet Application Violates the FCC’s Policy Statement and Does Not Meet an Exception for “Reasonable Network Management,” WC Dkt. No. 07-52 (Nov. 1, 2007).

August 2008

FCC rules, 3-2, that Comcast violated federal Internet policy, as embodied in Sections 1, 201, 230, 256, 257, and 601 of the Communications Act, and Section 706 of the 1996 Act [or maybe the penumbras thereof].

See Formal Complaint of Free Press and Public Knowledge Against Comcast Corporation for Secretly Degrading Peer-to-Peer Applications; Broadband Industry Practices, Petition of Free Press et al. for Declaratory Ruling that Degrading an Internet Application Violates the FCC’s Internet Policy Statement and Does Not Meet an Exception for “Reasonable Network Management,” Memorandum Opinion and Order, 23 FCC Rcd 13028 (2008).

November 17, 2008

The latest statistical reports indicate that there are nearly 66.7 million broadband subscribers in the U.S., with the top cable broadband providers claiming a 55 percent share of the market and a 6.3 million subscriber advantage over the top telephone companies.

The top broadband providers, including “the twenty largest cable and telephone providers in the U.S. [and] representing about 94% of the market[,] acquired approximately 1.3 million net additional high-speed subscribers in the third quarter of 2008.”

“These top broadband providers now account for nearly 66.7 million subscribers - with cable companies having 36.5 million broadband subscribers, and telephone companies having about 30.2 million subscribers.”

“Over the past two quarters the top cable providers accounted for 71% of the net broadband additions, adding over 900,000 more broadband subscribers than the top telcos.”

Press Release, Leichtman Research, 1.3 Million Add Broadband in the Third Quarter of 2008 (Nov. 17, 2008) (emphasis added), available at .

November 21, 2008

FCC Website still says ‘The FCC does not regulate the Internet or Internet Service Providers (ISP).”



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