Open Access to Monopoly Cable Platforms Versus Direct Access To Competitive International Telecommunications Satellite Facilities: A Study In Contrasts

Abstract

In 1999, the FCC authorized direct access to INTELSAT, allowing INTELSAT's U.S. customers and competitors to bypass INTELSAT's U.S. retail affiliate (COMSAT), and to take satellite capacity at wholesale prices directly from INTELSAT. This policy was modeled in many respects on the access and unbundling requirements applicable to domestic incumbent local exchange carriers (ILECs) under the Telecommunications Act of 1996. At the same time, incumbent domestic cable TV system operators have not been required to provide wholesale open access to competitive Internet Service Providers (ISPs) seeking to provide residential broadband Internet service through existing proprietary cable facilities. Yet the policy arguments favoring open access to incumbent domestic cable systems appear to be stronger than those favoring direct access to INTELSAT. For example, it may be fairly debated whether entrenched cable system operators are now positioned to unfairly leverage their dominance in the multichannel video programming distribution (MVPD) market to thwart competition in the broadband ISP market, as some cable open access advocates assert. In contrast, it is clear that no analogous issues of tying were implicated by INTELSAT in 1999, when its position in the international telecommunications market was substantially nondominant and, in any event, it had no new product to tie to its established offerings. Similarly, while it may be debated whether or not a cable plant is a bottleneck facility that gatekeeps broadband Internet for many residential users, it is beyond cavil that INTELSAT in 1999 controlled virtually no such bottleneck facilities.