The Supreme Court next Tuesday will hear a case involving “equal access” to broadband services. It’s The Brand X Case.
Treating broadband as an information service is part of the FCC’s strategy for promoting competition. If cable modem service were regulated like a telecommunications service, then it would be subject to the economic regulatory regime that applies to telecommunications services; i.e. equal access to the lines.
The FCC’s strategy is to remove regulations and promote competition. Many consumer groups believe a duopoly results, especially as phone companies move to unregulated fiber. Then phone companies can shut out ISP competitors just as cable providers do.
The Brand X case stems from a city of Portland, Oregon decision, back in 1999, that required the cable operator (then AT&T) to provide equal access to competing ISPs.
David Olsen, head of Portland’s Office of Cable Communications, opened this can of worms when he wrote a provision for open access for AT&T cable on a cold and rainy night.
In 1999, Portland and Multnomah County argued they had the right to reject AT&T’s cable Internet franchise because the company refused to provide open access for cable modem users. No local government had ever made that case before. So AT&T sued and lost, then the case went to the Ninth Circuit Court of Appeals.
Olson discussed cable access and his role in challenging AT&T in an interview with CNET News.com.
C/Net: In your opinion, would the devolution of regulatory power to local bodies be appropriate in any way within the telecommunications, Internet, or computer industries?
Olson: I don’t think any of these big sectors should be subject to an extensive scheme of local or state regulation in its classical sense. The traditional sense being filing tariffs, doing rates, looking at hierarchical structures, and otherwise really getting into the plumbing, pipes, and nodes inside a company.
I think in fact there is a role, and will be an increasing role, for local and state regulation, but the role is not the classic utility regulation. The role is balance in the marketplace. To make sure people are not prevented from entering, and to make sure people are not competing under unfair circumstances.
In 2002, the FCC ruled that cable providers are information services and do not have to share their lines with competing Internet service providers (ISPs). In contrast, incumbent telephone companies are required by the FCC to make their networks available to competing dial-up ISPs.
The ruling prompted a Santa Monica, Calif.-based ISP named Brand X to sue the FCC for open access to cable lines. In October 2003, the 9th Circuit Court of Appeals overturned the FCC decision and ruled in favor of Brand X. The FCC, supported by the Department of Justice, appealed the decision.
“Next Tuesday, the future of the Internet will be debated at the Supreme Court,” Mark Cooper, research director at the Consumer Federation of America, said at a Wednesday press conference. “[The FCC ruling] dynamically reduces the importance of the Internet.”
The Consumer Federation, along with the American Civil Liberties Union, the Center for Digital Democracy (CDD), the National League of Cities and a host of other public advocacy organizations, is supporting Brand X in its legal battle with the FCC.
The groups fear that if the Supreme Court upholds the FCC ruling, broadband competition in the United States will be reduced to a duopoly between cable modems and DSL, which the FCC wants to give the same information service classification as cable service.
“Open communications networks have been at the core of the American economy for centuries. Nondiscriminatory access to transportation and communications networks has always been essential to a thriving economy, whether it was railroads, the telegraph or telecommunications,” the CDD’s Jeff Chester said. “In the digital age when communications and commerce converge, open communications networks are even more important.”
Whether broadband wireless, the “third leg”, will keep the cable/phone duopoly in check, remains unknown. Since Sprint-Nextel own most of the licensed frequencies, some might question how competitive this new environment will be.
The FCC, for its part, thinks minimal regulation is the best way to rapidly deploy broadband services.
“High-speed Internet connections are not telephones,” then FCC Chairman Michael Powell said when the FCC appealed the 9th Circuit decision. “The 9th Circuit’s decision would have grave consequences for the future and availability of high-speed Internet connections in this country. As the commission is uniquely charged with the task of promoting the deployment of such advanced services to the public, we look forward to our opportunity to present our case before the high court.”
According to the FCC, there are 32.5 broadband connections in the United States with cable leading the pack with 18.6 million subscribers. DSL accounts for 11.4 million connections.
Google News has more on the Brand X Case.
