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IPTV’s in Vonage Order

11/21/2004 7:00 PM Eastern

Washington — The Federal Communications Commission declared in its Vonage Holdings Corp. pre-emption order that it is ready to push aside states that are considering regulation of Internet-protocol video services.

The FCC order, released Nov. 12, stated clearly that IP video is a service that the agency was prepared to shield from non-federal regulation. The ruling seemed to clash with expectations that the order would be limited to voice-over-IP telephony.

GOOD FOR TELCOS

The ruling could be good news for Verizon Communications Inc. and SBC Communications Inc., which are planning to spend billions of dollars on broadband networks to compete with cable operators.

An SBC spokesman said last month that the company planned to deploy IP networks differently from the way cable presently delivers video services.

Arguably, this could mean that at least SBC could offer video without complying with traditional cable rules, such as franchising, franchise fees and channel-capacity set-asides for broadcasters, public access and leased access.

Cable and city lawyers cautioned that the FCC’s order should not be given too broad a ruling, especially when it’s unclear whether Verizon or SBC will in fact make IP video commercially available to the mass market.

CABLE ANGLE

The FCC’s Vonage ruling could also mean that the same deregulatory benefits would flow to cable companies, assuming that they converted their distribution systems to an all-IP platform.

Center for Digital Democracy executive director Jeff Chester said the agency could be establishing the predicate for total deregulation of IPTV, as provided by big phone and cable companies.

“The Baby Bells have already started lobbying for exemption from … franchise requirements for their upcoming fiber/DSL-based video services, and [FCC chairman Michael] Powell may already be laying the groundwork that will allow him to grant the Bells’ wishes next year,” Chester said. “And if IP-based video joins voice in Powell’s deregulated, market-driven digital enterprise zone, can cable be far behind?”

Whether the FCC will really upset traditional cable regulation is going to be tested.

In the 30-page order, the FCC did not address the implications of its conclusion that “even video” would be an IP-enabled service covered by its pre-emption of state regulators.

Instead, the FCC said its pre-emption would cover a host of “basis characteristics,” including those that enable users “to originate and receive voice communications and access other features and capabilities, even video.”

On Nov. 9, the agency ruled that VoIP service provided by Vonage, cable operators and phone companies was an interstate service beyond the jurisdiction of state regulators.

MORE DUE FROM FCC

The FCC has a separate proceeding pending on the regulatory classification of VoIP and IP-enabled services, and the federal regulations that would apply.

 

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