Washington Post 2008 Annual Report Download - page 23

“telecommunications services” under the Communications Act, nor is it subject to state or local government regulation. In
the wake of the Supreme Court’s decision, the FCC ruled that a telephone company’s offering of digital subscriber line
(“DSL”) Internet access service is also an “information service.”
Cable ONE currently offers broadband Internet access service on virtually all of its cable systems and is the sole Internet
service provider on those systems. Cable ONE does not restrict the websites that its broadband Internet access
subscribers may view; but regulations that distinguish between interference with subscriber access and reasonable
network management are evolving and over time could begin to interfere with Cable ONE’s ability to manage its network
or provide services to its subscribers. Congress, from time to time, has considered whether to impose various “net
neutrality” requirements on providers of broadband Internet access service that would limit the ability of such providers to
prioritize the delivery of particular types of content, applications or services over their networks. As a result of allegations
that cable operators may be interfering with transmission and receipt of data on so-called “peer-to-peer” networks, several
entities asked the FCC to ban such practices and to rule that reasonable network management practices do not include
conduct that would block, degrade or unreasonably discriminate against lawful Internet applications, content or
technologies. The FCC has ruled against at least one cable operator thus far in response to this request, but the cable
operator has sought judicial review of the ruling, and the appeal is pending. We cannot predict the outcome of this
appeal or the impact it may have on net neutrality considerations in the future.
Providers of broadband Internet access services are subject to many of the same federal and state privacy laws that apply
to other providers of electronic communications, such as cable companies and telephone companies, including the
Electronic Communications Privacy Act, which addresses interceptions of electronic communications that are in transit; the
Stored Communications Act, which addresses acquisitions of electronic data in storage; and the Communications
Assistance for Law Enforcement Act (“CALEA”), which requires providers to make their services and facilities accessible to
law enforcement for purposes of surveillance. Various federal and state laws also apply to Cable ONE and to others
whose services are accessible through Cable ONE’s broadband Internet access service. These laws include copyright
laws, prohibitions on obscenity and requirements governing unsolicited commercial e-mail.
Voice Services
Voice Over Internet Protocol. Cable companies (including the Company’s Cable ONE subsidiary) and others offer
telephone service using a technology known as voice over Internet protocol (“VoIP”), which permits users to make
telephone calls over broadband communications networks, including the Internet. Depending on their equipment and
service provider, VoIP subscribers can use a regular telephone (connected to an adaptor) to make and receive calls to or
from anyone on the public network. The Telecommunications Act of 1996 preempts state and local regulatory barriers to
the offering of telephone service by cable companies and others, and the FCC has used that federal provision to preempt
specific state laws that seek to regulate VoIP. Other provisions of the 1996 Act enable a competitor such as a cable
company to exchange voice and data traffic with the incumbent telephone company and to purchase certain features at
reduced costs, and these provisions have enabled some cable companies to offer a competing telephone service.
The FCC has held that VoIP services generally are interstate in nature and thus subject exclusively to the FCC’s federal
jurisdiction. This decision was upheld on appeal, although the FCC has an ongoing proceeding to consider whether VoIP
services provided by cable companies and others are properly classified as an “information service,” “telecommunications
service” or some other new category of service. This determination, once made, could have numerous regulatory
implications for cable companies that provide VoIP services, including Cable ONE. In the absence of a definitive FCC
decision, several states (including those in the Company’s Cable ONE’s service territory) have attempted to regulate VoIP
services like traditional telephony service and impose certain fees and taxes on the provision of VoIP services. These state
actions could have an adverse effect on our business by increasing the Company’s costs to provide VoIP services.
Legislation, also from time to time, has been introduced in Congress to address the classification and regulatory
obligations of VoIP providers. The prospects for passage of any such legislation are uncertain.
Emergency 911 Services. The FCC has ruled that an interconnected VoIP provider that enables its customers to make
calls to and from persons who use the public switched telephone network must provide its customers with the same
“enhanced 911” or “E911” features that traditional telephone and wireless companies are obligated to provide. This
requirement was upheld on appeal. The FCC is currently assessing whether additional rules related to the provision of
E911 services by interconnected VoIP service providers should be adopted.
CALEA. FCC regulations require providers of VoIP service to comply with the requirements of the Communications
Assistance for Law Enforcement Act, which requires covered carriers and their equipment suppliers to deploy equipment
that law enforcement officials can access readily for lawful wiretap purposes.
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