Cable Internet Access

In 2002, the Federal Communications Commission issued a Declaratory Ruling and Notice of Proposed Rulemaking regarding the provision of Internet services over cable connections to address the legal status of such services under the Communications Act of 1934, as amended. In the Declaratory Ruling, the Commission determined that “cable modem service, as it is currently offered, is properly classified as an interstate information service, not as a cable service, and that there is no separate offering of telecommunications service.”

By classifying cable modem service as an information service and not a telecommunications service or a composite service that combines an information service and a telecommunications service, the Commission precluded the mandatory application of the requirements imposed on common carriers under Title II of the Communications Act, thus allowing the provision of such services to develop with relatively few regulatory requirements.

In making the determination that cable modem services are information services and not telecommunications services, the Commission first looked to the relevant statutory definitions of each as established by the Telecommunications Act of 1996. In enacting the Telecommunications Act of 1996, Congress codified a definitional distinction between “telecommunications” (and “telecommunications service”) and “information service.”

“Telecommunications” is defined under the act as the “transmission, between or among points, specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent or received.” “Information service”, on the other hand, is defined as the “offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing or making available information via telecommunications.”

Noting that the statutory definitions are based on the functions that are made available with the service rather than the facilities used to provide the service, the Commission then examined the functions that cable modem service makes available to its end users. Citing its determination in an earlier proceeding that Internet access service in general should be classified as an information service, the Commission found that since cable modem service is “an offering of Internet access service,” it must also be an information service. The Commission stated that “cable modem service is a single, integrated service that enables the subscriber to utilize Internet access service through a cable provider’s facilities and to realize the benefits of a comprehensive service offering.”

The Commission rejected the notion that cable modem service included an “offering of telecommunications service to a subscriber,” conceding that while the service was provided “via telecommunications,” the telecommunications component was not “separable from the data-processing capabilities of the service.”

The U.S. Supreme Court decision in National Cable & Telecommunications Ass'n v. Brand X Internet Services, effectively affirmed the Commission’s Declaratory Ruling.