CABLE UNTIED

The U.S. Court of Appeals for the 9th Circuit stated the obvious when it rejected the FCC's absurd ruling that high-speed Internet access delivered over a hybrid fiber/coax network is somehow different than high-speed Internet access delivered over a hybrid fiber/copper network.

Regardless of the outcome of the FCC's appeal, which is sure to come, it's about time the courts and regulators fulfill the promise of creating a level playing field on which cable operators and telcos compete for data users.

When the Telecom Act was passed, cable operators had reason to ask for extra help. Given the massive upgrades required and the lack of any data market share at the time, it made sense in those halcyon days to assure that the upstart had what seemed like a small advantage over an entrenched incumbent. But with a 2-to-1 market share advantage over DSL providers, the argument, even when packaged in cable-speak as “forced access,” is incongruous to market realities.

Cable operators' argument that sharing their networks was technically difficult was equally ridiculous. The technology that lets cable operators put multiple ISPs on their networks has been around for years, and some use it. But not enough have implemented it, and consumers still must be relatively knowledgeable about the issue to realize there is a choice.

The cable industry is getting support from the Cato Institute, which put out a supportive paper arguing that genuine competition requires the ability to exclude rivals. Such points of view are reasonable if implemented on both sides of the competitive arena.

Perhaps most importantly, the decision forces cable operators to live up to promises made in the past. When AT&T shelled out $48 billion in stock to buy Tele-Communications Inc. in 1998, it made a promise to offer cable modem users a choice of ISPs. That marriage was annulled, the shares are now worth a fraction of $48 billion, and users still have but one real choice.

Unfortunately, the broken promise by cable operators is a pattern. As part of its merger agreement, Time Warner AOL promised to open up its instant messaging platform before it launched new IM-based services. More than three years later, consumers using the dozens of non-AOL clients still can't easily communicate with the massive AOL IM user base. What's more, the company went to the FCC seeking a waiver of the merger concession.

The cable industry has been able to get away with broken promises for far too long, and the three-judge panel is to be congratulated. Unfortunately, the ruling will likely be tied up in legal limbo for some time, and consumers won't see a choice of ISPs for many years.