The Federal Communication Commission’s National Broadband Plan - Adoption, Usage, and Global Impact of Broadband Technologies - page 61

in anticompetitive behavior in providing basic
services for independent providers of enhanced/
information services that rely on the underly-
ing communications platform to provision their
services. Thus, the openness access policy was
intended to benefit directly competitive enhanced/
information service providers (Cannon, 2003) and
to facilitate innovation at the edge of a network,
innovation that did not require the permission
of facilities-based wireline network providers.
It is often argued that the spectacular growth of
the Internet benefited from a federal policy of
'unregulation' (Oxman, 1999) but such a policy
clearly did not apply to conditions governing ac-
cess to the Internet.
In the mid 1990s, end users wishing to access
the Internet initially relied on dial-up (narrow-
band) wireline connections over the telephone
companies legacy circuit-switched networks,
networks centrally designed for the single pur-
pose to provide high quality voice services. The
Computer Inquiry decisions in combination with
the decision to exempt ISPs from having to pay
interstate access charges to local telephone pro-
viders stimulated the growth of an independent
ISP industry. According to a government report
in 2001 (Kruger and Gilroy, 2001), there were
about 6,000 Internet Service Providers, (classified
as providing an unregulated enhanced/informa-
tion service), such as AOL and Earthlink, in the
United States and this competition resulted in
benefits to end users for Internet access service
such as price reductions, quality enhancements,
and a choice among a wide variety of differenti-
ated access services. Independent ISPs generally
relied on the telephone company to provide the
facilities to provision the underlying transmission
component upon which they added upper layer
Internet services for the end user.
As the supply of and the demand for high
bandwidth (broadband) connections grew at the
end of the 20 th century, changes in technology
and federal policy caused the market structure of
the ISP market to change dramatically. First, in

response to the emergence of satellite television
competition, cable television service providers
upgraded their one-way video distribution net-
works to provide more channels and to provide
two-way services such as high bandwidth con-
nections, called cable modem service. Secondly,
telephone companies upgraded the copper local
loop in order to be able to provision high band-
width digital subscriber service (DSL) over the
same local loop as they provision voice service.
As these technological developments occurred,
independent ISPs called for the wireline trans-
mission component of Internet access, supplied
by incumbent cable and telephone companies,
to remain a mandated wholesale transmission
service (referred to as an open access policy)
which, of course, had historically been true for
telecommunications companies but not for cable
companies, other than for several cable mergers in
the late 1990s and early 2000s where the merged
cable company agreed to provide open access to
the cable transmission component in order for the
federal agency to endorse the merger.
In 2002, the FCC took its first concrete step
in constructing a deregulatory policy for wireline
broadband Internet access services by determining
that cable modem service (which the FCC por-
trayed as a service that inextricably intertwined
transmission with information processing capa-
bilities) was an information service and, thus,
free of Title 2, common carrier obligations (FCC,
2002). The Supreme Court in its Brand X decision
in 2005 upheld this judgment (National Cable
and Telecommunications Association, 2005). In
2003, the FCC eliminated open access to the DSL
component of the local loop (called line sharing)
by deciding that the high frequency portion of the
local loop was no longer a mandatory unbundled
network element (FCC, 2003). Prior to this
reversal of policy, it was possible for a competi-
tive local exchange company to share the local
loop with the incumbent telephone company in
provision of one of the services (voice and DSL
service) provided over the local loop. Also, in a