Verizon Asks 4th Circuit U.S. Court of Appeals To Define Cable Modem Service As a Telecom Service

RICHMOND, Va. - Cable modem service is a telecommunications service and should be recognized as such by the U.S. Court of Appeals for the Fourth Circuit, Verizon Communications argued today before the appeals court.

Verizon Communications, the national communications company formed by the merger of Bell Atlantic and GTE, is supporting Henrico County's defense of its cable open access ordinance. The ordinance requires cable companies to open their high-speed networks to independent Internet service providers (ISPs), in the same manner that telephone companies provide nondiscriminatory service to ISPs today. The Henrico open access ordinance is designed to ensure that consumers have a choice of ISPs without having to use and pay for the ISP affiliated with their cable company.

In June, the Ninth Circuit Court of Appeals in San Francisco ruled in an identical case involving the City of Portland that cable modem service is a telecommunications service.

"The Ninth Circuit was right on the money," said John Raposa, Verizon vice president and associate general counsel. "High-speed, two-way Internet communications whether provided by the telephone company or a cable company is a telecommunications service. As such, lightning-fast cable Internet access should be open to independent ISPs, giving Henrico County residents and all cable broadband customers a choice of ISPs."

In its brief and before the court, Verizon argued that:
• Internet access offered by cable companies is a telecommunications service and should be open to independent ISPs, just like high-speed, DSL (digital subscriber line) service provided by local telephone companies;
• However, if the court believes instead that cable modem service is a "cable service," then Henrico County, as the local cable licensing authority, has the right to require open access;
• Interactive data services provided by ISPs are not cable services;
• Verizon does not seek to impose any form of regulation on the Internet.

"This case sets the stage for the future of the Internet," Raposa said. "Open access to telephone networks has fueled the explosive growth and innovation of the Internet. Cable companies are poised to choke off that growth and innovation, and absent open access can censor Internet content available to consumers. America can't afford to let cable companies dictate the future of the Internet."

BACKGROUND

In December 1999, the Henrico County Board of Supervisors passed a cable open access ordinance as a condition of transferring MediaOne's cable license to AT&T, as part of its merger. The cable industry challenged the County's ordinance in the U.S. District Court for the Eastern District of Virginia. In May, the court found that the County's franchising authority was preempted by federal law but did not decide whether cable modem service is properly classified as a telecommunications service or a cable service. Henrico County and Verizon appealed the district court's decision and the proper classification of cable modem service is now a threshold issue before the appeals court. Agreeing with Verizon, the openNET coalition -representing nearly 1,000 independent Internet service providers and Internet-related companies -- filed a friend-of-the-court brief arguing that cable modem service is a telecommunications service.

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Verizon Communications

Verizon Communications (NYSE:VZ), formed by the merger of Bell Atlantic and GTE, is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with more than 100 million access line equivalents and 25.6 million wireless customers. A Fortune 10 company with more than 260,000 employees and approximately $60 billion in 1999 revenues, Verizon's global presence extends to 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com .