Dunleavy, Thomas J.

Stein, Eleanor

English

St. John's University School of Law

Journal of Civil Rights and Economic Development Volume 17 Issue 1 Volume 17, Winter 2003, Issue 1 Article 5 December 2003 Perspectives on How Internet Access Affects the Broadcast Market Thomas J. Dunleavy Eleanor Stein Follow this and additional works at: https://scholarship.law.stjohns.edu/jcred Recommended Citation Dunleavy, Thomas J. and Stein, Eleanor (2003) "Perspectives on How Internet Access Affects the Broadcast Market," Journal of Civil Rights and Economic Development: Vol. 17 : Iss. 1 , Article 5. Available at: https://scholarship.law.stjohns.edu/jcred/vol17/iss1/5 This Symposium is brought to you for free and open access by the Journals at St. John's Law Scholarship Repository. It has been accepted for inclusion in Journal of Civil Rights and Economic Development by an authorized editor of St. John's Law Scholarship Repository. For more information, please contact selbyc@stjohns.edu. PERSPECTIVES ON HOW INTERNET ACCESSAFFECTS THE BROADCAST MARKETHON. THOMAS J. DUNLEAVY*WITH ELEANOR STEIN**The contributors have covered the subject thoroughly - andprovided insights from some very different perspectives. I feel abit like Walter Cronkite's director - there just is not much for meto do.As you know, the New York State Public Service Commission("PSC") does not regulate broadcast media and has very limitedinvolvement in wireless - or in the retail provision of Internetservice.' My own involvement in and knowledge of broadcastingcan be memorialized on the head of a pin and still leave room forthe thousand dancing angels, but I do use e-mail. Nevertheless, Iventure forth.Kathy Brown raises the critical question. Kathy Brown is notonly the former FCC Chief of Staff but the Former Director ofConsumer Services, Managing Attorney for Telecommunicationsand Appellate litigator for the New York PSC - and now apartner at Wilmer, Cutler & Pickering. Ms. Brown goes right tothe heart of the matter when she points out it is all about access.There are no new services without access. This is theCommissioner, New York State Public Service Commission.Administrative Law Judge, New York State Public Service Commission.I See New York State Public Service Law § 90, which exempts cellular telephoneservices from Commission regulation, notwithstanding the regulatory authority'sapplicability to "communication by telegraph or telephone between one point and anotherwithin the state of New York and to every... telephone corporation." Public Service Law§ 90 (1). As to Internet service, state commissions do not regulate retail Internet services,and the law is in considerable flux today as to what the respective role of state and federalregulators should be. However, states do have authority to establish rates and conditions,under the general regimen established by the FCC, for unbundled network elements,those parts of the telecommunications network owned by the incumbent provider whichunderlie all wireline and much other telecommunications technologies, including theInternet.82 ST JOIN'S JOURNAL OF LEGAL COMMENTARYunderlying theme we have heard: without affordable access,Internet is inhibited and that's not good!The Internet is different from broadcast; that is obvious, asyou've just heard from this panel of experts. The twotechnologies are driven by different dynamics and have differentcharacteristics, different markets, and different customers. Yetno matter how new the medium, or how exotic the technology,access to and by the end user is the critical issue.Without commercially viable access to end users, new marketentrants will find that they have nothing to sell and, in the finalanalysis, it's all about reaching that customer, regardless of thetechnological platform. For CBS, NBC, Time Warner, or Yahoo,access to customers means sales, revenues, and profits. For NewYork's consumers, accessibility of all kinds of services andcompetitive choices means a healthy telecommunicationsmarketplace of ideas, applications, and entertainment.For technologies dependent upon a wireline network, that'sstill a problem. There is still a bottleneck: essential facilities ofvarious kinds remain in the hands of the incumbent, whetherthat incumbent is an incumbent local exchange carrier, anetwork, or a cable TV provider.2 And remember, we have heardbroadcasting's death knell, but it is still very much with us.Nondiscriminatory access to bottleneck facilities remains aprecondition for competition. I think Mr. Schwartzman madethat point very well and in several different ways. But it's stillan open issue.Recently the FCC issued a declaratory ruling that classifiescable modem service as an interstate information service subjectto its exclusive jurisdiction. They've determined that cablemodem is not a cable service subject to Title 6 of the Act nor is ita telecommunications service subject to Title 2. To the extent itis regulated at all it will be regulated under Title 1. 3The Federal Communications Commission also released a2 An essential facility is one controlled by a monopolist that cannot reasonably bereplicated by a competitor. The four elements necessary to establish liability under theessential facilities doctrine have been described in case law. MCI Communications v.American Tel. & Tel. Co., 708 F.2d 1081, 1132 (7th Cir. 1983) cert. denied, 464 U.S. 891(1983). A monopoly claim can be proven via the essential facilities doctrine. PaladinAssociates, Inc. v. Montana Power Co., 97 F.Supp.2d 1013, 1037 (2000).3 In re Appropriate Regulatory Treatment for Broadband Access to the Internet overCable Facilities, Declaratory Ruling, 2002 FCC Lexis 4534 (Mar. 15, 2002) (No-02-52).[Vol. 17:812NTERNETA CCESSAFFECTS THE BROADCAST MRKETNotice of Proposed Rulemaking which sought to determinewhether wireline broadband and cable modem services - bothconnect customers to the Internet at higher speeds - should betreated identically or differently under the Act.4 Also pending isthe FCC's triennial review of the incumbents' obligation toprovide unbundled parts of the network at wholesale tocompetitors.5 These dockets contain a lot of critical issues andthere is some cross-pollination among these proceedings. TheFCC has asked some tough questions regarding state and localauthority. This is a high impact realm for New York and forstate regulators generally.The results are a long way from being in. The New YorkDepartment of Public Service has commented on these FCCrulemakings, with the aim of retaining state authority whereappropriate, because in telecommunications the states have beenthe laboratories for innovation and for competition for localservices, in practice. The New York DPS urged the FCC tocontinue to recognize the states need flexibility to adopt policiesthat reflect local market conditions consistent with the 1996 Act.Incidentally, for those in this audience, attorneys and lawstudents, it's all good news. This uncertainty means fullemployment, long term, for the legal profession.New York State's policy, reaching back long before passage ofthe 1996 Act, has been to ensure competitive access to customersthrough Open Network Architecture and we are continuing onthat path.6 In January 2002 we reduced the prices - in somecases, dramatically - that competitors pay for unbundlednetwork elements - the piece parts that make up a4 In re Appropriate Framework for Broadband Access to the Internet over WirelineFacilities, 2002 FCC Lexis 824 80 (Feb. 15, 2002) (No. 02-33) (inviting comment onwhether all facilities-based broadband Internet access providers should be subject to thesame contribution obligations).5 Review of the Section 251 Unbundling Obligations of Incumbent Local ExchangeCarriers, No. 01-339, 16 FCC Rcd 22781 1 (2001) (initiating triennial review of policieson unbundled network elements).6 As the FCC has recognized in its Order approving the first petition by a localtelephone company to offer in-region long distance service under the 1996 Act, the NewYork Commission "has pioneered measures to open the local exchange market tocompetition." See In re the Application by Bell Atlantic New York for Authorization underSection 271 of the Communications Act to Provide In-Region, InterLATA Service in theState of New York, No. 99-295, 15 FCC Rcd 3953 6, n.5 (1999) for an extensivediscussion of the New York Commission's leadership in opening local markets tocompetition for over fifteen years.2003]84 ST JOHN'S JOURNAL OF LEGAL COMMENTARYtelecommunications offering, in the drive for competitive access. 7And in February we approved an incentive plan for Verizon toallow it to compete effectively in the market. 8As panelists pointed out, broadcasters are expected to addressthe needs of the markets they serve and so too are cable TVfranchises, via their public access and public, educational, andgovernmental, "PEG" for short, channel obligations. But there ismore: the Internet, the interactive service is not yet availableover broadcast technology.How the FCC will ultimately delineate the obligations, termsand conditions remains to be seen; as will the role of states andwhat, if any, state-specific policies will be carved out.This is an issue near and dear to us. New York was the firstjurisdiction to require line-splitting,9 so competitors can offerboth voice telephoning and DSL over the incumbent's line; andwe required physical and virtual collocation before that.Again, access to the customer is a precondition for acompetitive market and even as wireless and cable successfullycompete with wireline, we want also to see a vibrant, innovativecompetitive struggle in the wireline arena. Today competitivelocal exchange carriers serve about 27% of access lines in NewYork State, one of the highest percentages of any state. Butthere's more to be done: building access may be the next hurdle.Professor Plasencia gave us an important snapshot of the reachand use of the Internet and stressed its importance amongspecific demographic segments. We are all looking forward torealizing the mighty potential of broadband, but lets not forgetthat over 80% of Americans access the Internet using POTS:plain old telephone service, and it works. Professor Plasenciaobjected and said it's not enough. I agreed but pointed out it'sevolutionary. POTS Internet access is not broadband, but it doesprovide a workable platform to build DSL.7 Proceeding on Motion of the Commission to Examine New York TelephoneCompany's Rates for Unbundled Network Elements, Case No. 98-C-1357, 2002 N.Y. PucLexis 15, (N.Y.P.S.C. issued Jan. 28, 2002).8 Proceeding on Motion of the Commission to Consider Cost Recovery by Verizon andto Investigate the Future Regulatory Framework, Case No. 00-C-1945, 2002 N.Y. PucLexis 80 (N.Y.P.S.C. issued Feb. 27, 2002).9 Proceeding on Motion of the Commission to Examine Issues Concerning theProvision of Digital Subscriber Line Services, Case No. 99-C-0127, 2001 N.Y. Puc Lexis587, (N.Y.P.S.C. issued Aug. 29, 2001) (stating that rates and regulations have beenintroduced for line splitting).[Vol. 17:812NTERNETA CCESSAFFECTS THE BROADCASTMARKETAnd I'm very proud to say that in New York State every singlecentral office, from the tip of Manhattan to the northernAdirondacks, offers Internet access on a local calling basis. Mosthave available more than one carrier to take those calls to theInternet. This was not true as recently as three years ago.Professor Plasencia's exposition of the range and growth ofInternet services is especially meaningful to us in New York -the obligation of all media to address the needs of minorities andof all communities cannot be overemphasized. Our City andState have been, and will continue to be, a media center: a petridish for new technologies and unlimited creativity in content.We are constantly reinventing ourselves. One need only lookat what has happened since the horrific events of September 11thto see New York's indomitable spirit for rebuilding andrecreating itself. New York always will rise to a challenge.Mr. Schwartzman reminded us of the local roots of broadcast:its responsibility and the centrality of local communitycommunication. He told us that the Internet provides globallinks of mutual interest, of news, and of creative expression. Butwe can't afford to lose sight of how very important localcommunications is to the community in this era of globalization.My friend, Vincent Thomas, spoke from the legislativeprospective - eloquently and elegantly. He reminded us there's aneed for responsible legislation that allows for growth and offersincentives for investment in new technology. The New YorkState Legislature has recently passed a bill instructing the PublicService Commission to study the availability of affordableadvanced services and the Internet in rural areas in the State -something we monitor closely and are looking forward tocontinuing to monitor.Ms. Seltzer makes some very important points regardingcopyright law. It's another complicated element of this verycomplex issue, and I thought I heard a warning: be careful whatyou wish for, you may get it! I'm a regulator and I believe thatwhere regulation is concerned, less is better. But we have aresponsibility to protect the public interest - all of it. So, while Ifavor regulatory restraint, I am fully aware that history is aprologue. I believe in close monitoring. I think it was PresidentReagan who said, "Trust but verify."The Broadcast industry would do well to keep a close eye on2003]86 ST JOHN'S JOURNAL OF LEGAL COMMENTARY [Vol. 17:81the Internet. Somewhere out there is a young person, maybewith spiked hair and some pierced body parts, working on thekiller app that just may make broadcasting yesterday'stechnology, unless it recognizes the need to address users not justeyeballs - and uses all that idle fiber that's in the ground.It's a changing world. Public Television will not renew LouisRukeyser after 32 years. Did the thundering hooves of theInternet have something to do with it? I'll let you decide.

Perspectives on How Internet Access Affects the Broadcast Market

https://scholarship.law.stjohns.edu/cgi/viewcontent.cgi?article=1184&amp;context=jcred

Perspectives on How Internet Access Affects the Broadcast Market

Abstract

Similar works

Full text

Available Versions

St. John's University School of Law