Before the

DEPARTMENT OF COMMERCE

NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION

Washington, D.C. 20230

In the Matter of )

)

Request for Comments ) Docket No. 011109273-1273-01

Deployment of Broadband Networks )

and Advanced Telecommunications )

COMMENTS OF CABLEVISION SYSTEMS CORPORATION

Pursuant to the request of the National Telecommunications and Information Administration (“NTIA”),[1]/ Cablevision Systems Corporation hereby submits its comments on the deployment of broadband networks and advanced telecommunications. Cablevision, which started more than twenty years ago as a cable television operator, has evolved into a media and telecommunications company offering a rich diversity of services to millions of subscribers. Through various subsidiaries and affiliates, Cablevision now provides cable television service, telephony, cable modem service, and other innovative product and service offerings to subscribers and customers located principally in New York, New Jersey and Connecticut.

INTRODUCTION AND SUMMARY

Cablevision has invested billions of dollars to upgrade its network in order to provide its subscribers with the next generation of advanced communications services, including digital services such as digital video, telephony, IP telephony, and high speed Internet access. Cablevision also has begun to deploy digital set-top boxes that give subscribers the ability to use this advanced infrastructure to obtain a wide array of services, including interactive television (“ITV”) services such as movies on demand, an interactive programming menu, e-mail, and access to Internet-related content, video games, and customized local and regional interactive content.

Cablevision and others providers’ investment in and deployment of broadband and advanced services confirm that the current broadband deployment policy is succeeding. Congress’ efforts in the Telecommunications Act of 1996 (“1996 Act”) to encourage the development of innovative new services has provided consumers with a choice in broadband service providers using diverse technologies throughout the country. Given the success of the current policy to date, the “primary policy consideration[] in formulating broadband policy for the country”[2]/ should be to adhere to the balance of power Congress struck in the 1996 Act. Efforts to alter the nation’s broadband policy, particularly in this economy, will only create unnecessary uncertainty that hinders providers’ ability to adapt to the quickly changing market for these emerging services.

An important part of maintaining the principles of the current statutory and regulatory scheme, which is essential to the continued growth of competition, is strong enforcement of the 1996 Act. Cablevision and other competitors could be deploying broadband and advanced services to customers more quickly if ILECs were meeting their obligations under the 1996 Act. The barriers to interconnection raised by the ILECs have hindered Cablevision’s ability to deploy broadband services in a timely manner. In addition, the discriminatory manner in which local competition is applied to CLECs and ILECs creates a disadvantage for CLECs in the market.

I. CABLEVISION HAS INVESTED IN AND IS DEPLOYING BOTH BROADBAND AND ADVANCED TELECOMMUNICATIONS SERVICES AND FACILITIES THROUGHOUT ITS SERVICE AREA

NTIA requests information regarding broadband deployment and broadband demand,[3]/ as well as information on competitive carriers’ facilities-based investments.[4]/ The current regulatory scheme has successfully encouraged massive investment in and deployment of broadband and advanced services. ILECs, CLECs, cable operators, satellite providers and others are deploying high-speed Internet and advanced services throughout the country, and multiple competing technologies and vendors are deploying advanced telecommunications capability.[5]/

Cablevision is currently in the process of upgrading its network facilities so that it can offer its customers a full range of innovative and creative broadband and advanced telecommunications services, and is expected to have made a cumulative investment of over $4 billion in plant and equipment by year-end 2003 to deliver such services. Similarly, ILECs continue to invest in broadband at an unprecedented rate: Verizon has spent well over $10 billion on its New York network thus far, $2 billion in 2000 alone.[6]/ These investments are a testament to the success of the 1996 Act in facilitating the deployment of broadband.

A. Cablevision is Investing In And Deploying Broadband Services Throughout its Service Area.

Cablevision’s substantial investment in broadband has enabled it to offer subscribers a digital platform that integrates video programming, Internet connections, innovative niche programming, telephony, and live entertainment. Cablevision’s cable modem service, Optimum Online, has grown from being available to over 600,000 subscribers in 1998 to being available to nearly three million homes today. Presently, 69 percent of the company’s potential customer base has access to broadband and high-speed cable services; by 2003, the company expects that virtually all of its potential subscriber base will have access to such services.[7]/

Cablevision began to roll out its digital and interactive television service, iO: Interactive Optimum this fall, and iO is now available to 550,000 homes in Cablevision’s service areas on Long Island. Cablevision plans to roll out iO throughout its entire service area, passing 4.7 million homes. iO currently offers subscribers a comprehensive suite of digital services, including video-on-demand, digital programming, interactive television, a “click-to-view” programming guide, e-mail service through the television, and select niche video content from Mag Rack.[8]/ The digital box will also enable the provision of IP telephony to residential subscribers. Cablevision is currently testing this service in 300 homes and intends to begin commercial deployment in 2002.

Cablevision’s 36,000 mile upgrade has also enabled it to broaden the bandwidth of its multimillion dollar Power to Learn™ initiative. Power To Learn is an online educational initiative designed to enable teachers, students and parents to integrate and utilize the power of the Internet in a commercial-free environment. Power To Learn is an advertising free service tailored specifically for teachers, students and parents in the New York metropolitan area, offering high-speed Internet access to schools and libraries, an online learning community, and training programs and materials to assist teachers in integrating the Internet into their classrooms. Designed through cooperation and consultation with local teachers and educators, Power to Learn has been described by one local publication as a "cyberspace extension of the classroom” that is making Cablevision into “one of the most effective tutors our children can have.”[9]/ Through Power to Learn, Cablevision has provided more than 1000 schools and libraries with high-speed broadband Internet connections at little or no cost.

B. Through Lightpath, Cablevision is Investing In And Deploying Advanced Telecommunications Services Throughout its Service Area.

Cablevision’s telephony subsidiary, Lightpath, is a full-service, facilities-based CLEC that offers a broad range of services to business and residential customers. Lightpath currently serves more than 117,000 commercial and residential access lines in New York and Connecticut, and offers facilities-based competitive local services to businesses in New Jersey. Cablevision is upgrading its network to offer two-way interactive digital services, and has spent tens of millions of dollars on switching and other facilities to provide telephone services over this upgraded network. With a fully integrated array of data and telecommunications service offerings and state-of-the-art network, Lightpath provides a competitive alternative for customers seeking seamless, high-quality telecommunications services.

II. THE FEDERAL GOVERNMENT CAN BEST PROMOTE BROADBAND DEPLOYMENT BY ADHERING TO THE BALANCE STRUCK IN THE 1996 ACT

The federal government can best promote broadband investment and deployment[10]/ by embracing Congress’ determination in the 1996 Act that broadband service providers should be regulated only when strictly required to prevent a threat to the development of competition. Imposing onerous regulation on cable operators’ provision of broadband services -- such as imposing forced access requirements or requiring cable operators to allow access to ITV platforms -- is unnecessary. Indeed, given the investment and deployment occurring in its absence and the competitive state of the market, suggestions for additional regulation are “solutions in search of a problem” that will deter rather than enhance broadband development. The best means of promoting continued broadband investment and deployment is to maintain the current regulatory structure, and vigorously enforce the pro-competitive provisions of the 1996 Act.

A. Imposing Additional Regulation on Cable Modem Service Is Unnecessary in Today’s Competitive Marketplace and Would Hinder Broadband Development.

Since enactment of the 1996 Act, competition among Internet service providers -- including the regulated incumbent providers.[11]/ Cable modem service has only a tiny market share of all Internet users; the vast majority of subscribers access the Internet through dial‑up connections. Even looking only at the broadband service market, cable modem service faces significant competition from DSL -- which has several million subscribers[12]/ -- and satellite providers, whose broadband subscribers are predicted to reach 4.5 million by 2005.[13]/

Given the competitive state of the market, intrusive new regulatory requirements like forced access requirements are inappropriate. The government’s hands-off approach has allowed Cablevision to focus on what it needs to do in the market: invest substantial capital to build a broadband network and undertake bold new broadband marketing and content initiatives. Cablevision’s substantial broadband infrastructure investments, its commitment to making cable modem service available throughout its service area, the company’s Power to Learn initiative, and the proliferation of broadband service providers in its geographic areas are all a testament to the success of the government’s hands-off policy.

Government intervention is particularly inappropriate given the nascency of cable modem and other competitive broadband services. There are substantial challenges associated with deploying new broadband services, and it is still unclear which services consumers will embrace and which business plans and revenue models will be successful. Cablevision has already invested billions of dollars and years of effort to bring its network to the point at which it is technically capable of delivering broadband services to subscribers, with no guarantee of return on its investment. Additional significant investments will be required to bring these services to market throughout its service areas. However, such investments are worthless without flexibility to shape the product offerings, services and revenue models to meet consumer needs, adapt to marketplace conditions and consumer behavior, and provide a sustainable business model. Any attempt to regulate this developing industry would inevitably reduce Cablevision’s ability to respond to the marketplace, and impede, rather than promote, broadband development.

B. Strong Adherence To and Enforcement of the 1996 Act is Essential to Cablevision’s Ability to Grow Its Provision of Advanced Telecommunications Services.

Although competition under the current regulatory framework is successfully encouraging investment in and deployment of broadband and advanced services, its continued success depends on adherence to the provisions of the 1996 Act. Lightpath and other competitive LECs continue to depend on ILECs for interconnection and the provision of unbundled elements to provide competitive new services to customers, but are hindered in their ability to deploy these services because the ILECs remain unwilling to provide interconnection in accordance with the Act, preferring instead to engage in delaying tactics that simply raise the costs of negotiations. Strict enforcement of the market-opening requirements of the 1996 Act is essential to bringing competitive choice to consumers.

1. Cablevision and Other Competitors Could Deploy Advanced Telecommunications Services More Rapidly If ILECs Were Meeting Their Obligations Under the 1996 Act.

Although the structure of the 1996 Act is sound, its enforcement is essential to continued deployment of advanced services. The incumbent LECs’ failure to live up to their obligations under the 1996 Act is restricting the ability of competitors to deploy advanced telecommunications service to their customers.[14]/ Lightpath has encountered substantial resistance in its attempts to interconnect with and lease network elements from Verizon in each state in which it operates, and consistently has had to resort to arbitration or mediation in order to enforce its rights under the 1996 Act. Further, in response to each interconnection request, Verizon has presented the same form agreement it attempts to impose throughout a multi-state region, and has insisted on using that agreement as the base document from which to negotiate, regardless of the fact that numerous provisions of its proposed agreement already have been determined in prior arbitrations to violate the 1996 Act.[15]/

2. Cablevision and Other Competitors Could Deploy Advanced Telecommunications Services More Rapidly If Municipalities Were Meeting Their Obligations Under the 1996 Act.

The Notice asks whether there is a need to address “local issues affecting broadband deployment in federal policy.”[16]/ Aggressive and unlawful regulation of the public rights-of-way disrupts competitors’ ability to reach customers in the most timely manner possible. In several significant local markets, CLECs such as Lightpath are forced to contend with local right-of-way ordinances that unreasonably and unjustifiably impose disparate burdens and fee requirements on new entrants relative to the incumbent local providers, despite the protections against this type of action that Congress enacted in section 253 of the 1996 Act.[17]/ Most egregiously, such ordinances fail to treat incumbent and competitive local exchange carriers similarly, even though they are making virtually identical use of the rights-of-way, and they assert control over telecommunications providers that far exceeds the limited rights-of-way management authority delegated to municipalities in the 1996 Act. The result is a multilayered scheme that disproportionately burdens new entrants.

CONCLUSION

For the reasons set forth above, federal policies that adhere to the principles of the 1996 Act will most effectively promote investment in and deployment of broadband and advanced telecommunications services.

Of Counsel:

Michael Olsen

Vice President, Legal Regulatory Affairs

Cablevision Systems Corporation

1111 Stewart Avenue

Bethpage, NY 11714

(516) 803-2500

December 19, 2001

Respectfully submitted,

________/s/______________________

Howard J. Symons
Tara M. Corvo
Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C.
701 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

(202) 434-7300

[1]/ Notice, Request for Comments on Deployment of Broadband Networks and Advanced Telecommunications, Docket No. 011109273-1273-01, 66 Fed. Reg. 57941 (Nov. 19, 2001) (“Notice”).

[2]/ Id. ¶ II.A.

[3]/ Id. ¶ II.C.

[4]/ Id. ¶ II.G.

[5]/ See generally comments filed Sept. 24, 2001 in response to Inquiry Concerning Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps To Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, Third Notice of Inquiry, CC Docket No. 98-146 (rel. Aug. 10, 2001).

[6]/ “Verizon Deploys Fiber Optics, Network Systems to Expand, Improve Service in Western New York; Company Invests $2.9 Million to Upgrade Local Telephone Network,” Verizon Press Release (Sept. 5, 2001).

[7]/ The success of broadband deployment must be evaluated not by subscribership, but rather by availability, since subscribership is affected by myriad factors, including “current economic conditions.” Notice ¶ II.C. A recent study by Hart Research and the Winston Group found that while 70 percent of households in the nation have access to high-speed Internet service, the majority of survey respondents did not plan to subscribe to broadband service at current prices. “Broadband Too Pricey for Dial-Up Users, Survey Says,” Communications Daily (Nov. 30, 2001) at 8.

[8]/ Mag Rack offers on-demand video magazines on a range of topics focused on the hobbies, lifestyles and special interests of Cablevision viewers. Initial topics will include: Motorcycles, Wine, Classic Cars, Birding, Science, Photography, Catholicism, Weddings, Vegetarian Cooking, and Health.

[9]/ “A true partnership between business and the classroom,” Long Island Business News (March 17, 2000); see also “Back to School: Double Click on Education: Explosion of Online Programs in Schools Challenges the Concept of the Classroom,” New York Times (Sept. 3, 2000).

[10]/ Notice ¶ II.A.

[11]/ Cablevision faces vigorous competition in its service areas from an array of broadband service providers and technologies, including Verizon, SBC/SNET, and RCN. The Federal Communications Commission has concluded that there is “significant investment in the facilities needed to provide advanced telecommunications capability, steadily rising subscription rates for advanced services, and a proliferation of providers in the marketplace.” Inquiry Concerning Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps To Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, Second Report, 15 FCC Rcd 20913 (2000).

[12]/ The fact that DSL subscribership may temporarily lag behind cable modem service subscribership is directly attributable to the incumbents’ failure to deploy the technology until CLECs and cable companies deployed competitive offerings. See, e.g., General Accounting Office, Telecommunications: Issues Related to Local Telephone Service, at 5 (Aug. 2000) (although “DSL technology was initially developed in the late 1980s,” telephone companies only recently brought this product to market, largely because of “the cable industry’s foray into Internet access with cable modem service”). In fact, cable modem service market share is expected to steadily decline over the next five years. See Yankee Group Report, “Residential Broadband: Provisioning Cable Modem Service,” Media & Entertainment Strategies (Oct. 2001).

[13]/ See id.

[14]/ The Notice also inquires whether continued enforcement of the interconnection, unbundling, and resale requirements of the 1996 Act “reduce [ILEC]s’ incentives to invest in broadband facilities in services.” Notice ¶ II.E. The answer is a resounding “no.” ILECs have invested billions of dollars in broadband, and continue to do so. See, e.g., “Verizon Launches Fiber-Optic Projects in Coeburn, Haysi,” Verizon Press Release (Dec. 11, 2001) (discussing Verizon’s $900 million investment this year to upgrade its Virginia network to meet high-speed data communications needs); “BellSouth Continues Expansion of High-Speed DSL Service Availability Throughout Rural Georgia,” BellSouth Press Release (Dec. 10, 2001) (discussing BellSouth’s investment in high-speed services across Georgia); “BellSouth Expands FastAccessSM DSL Internet Service in the Lowcountry,” BellSouth Press Release (Dec. 3, 2001) (stating that BellSouth is “adding DSL customers at a faster rate than anyone in the industry”). In New York, Verizon boasts that it has “made major strides in deploying advanced services in its New York network,” that “annual spending on Verizon’s New York network topped $2 billion in 2000,” and that “[t]he company’s investments since 1995 now total more than $10.2 billion.” “Verizon Deploys Fiber Optics, Network Systems to Expand, Improve Service in Western New York; Company Invests $2.9 Million to Upgrade Local Telephone Network,” Verizon Press Release (Sept. 5, 2001). The miles of fiber-optic cable in Verizon’s New York network have increased from approximately 715,000 in 1995 to more than 1.2 million in 2000. Id. Clearly, the 1996 Act has not deterred ILECs from investing in broadband.

[15]/ In New Jersey, for example, Lightpath has sought for more than nine months to renew its interconnection arrangements with Verizon along the same general terms that it has with Verizon in New York and Connecticut (agreements that themselves were reached only after arbitration or state commission mediation). Despite the fact that Lightpath has sought merely to implement with Verizon those rights that Lightpath has under applicable state and federal law, Verizon has denied Lightpath such rights, obstructed the renewal of interconnection arrangements, and caused Lightpath to expend hundreds of hours and hundreds of thousands of dollars –resources and money that would have been better spent expanding services to New Jersey customers.

Other practices by Verizon have likewise frustrated Lightpath’s efforts to compete in local markets. Verizon does not yet provide unbundled elements at lawful, cost-based rates, forcing competitors to overpay for the facilities they need to enter into the New Jersey local telecommunications market; it does not provide nondiscriminatory access to unbundled network elements under terms and conditions that permit CLECs efficient and timely entry into the New Jersey market;[15]/ and it refuses to comply with its reciprocal compensation obligations by unlawfully charging CLECs for the transport of Verizon-originated traffic on Verizon’s network and denying CLECs tandem rates when applicable, causing Lightpath to expend tremendous financial resources through arbitration to obtain what it is entitled to under the law. These tactics, blatant violations of the 1996 Act, have delayed Lightpath’s efforts to provide service to new consumers.

[16]/ Notice ¶ II.L.

[17]/ Section 253(a) provides that “[n]o State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.” Section 253(c) states that “[n]othing in this section affects the authority of a State or local government to manage the public rights-of-way or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a nondiscriminatory basis” 47 U.S.C. § 253(c) (emphasis added).