NYTimes.com Article: High Court Agrees to Hear Dispute Over Cable Internet Access

[David Farber <dave () farber net>]

While I was at the FCC I was part of the team that handled the AOL/Time  
Warner Merger where this was a significent issue djf

High Court Agrees to Hear Dispute Over Cable Internet Access

December 3, 2004
 By THE ASSOCIATED PRESS





Filed at 12:21 p.m. ET

WASHINGTON (AP) -- The Supreme Court said Friday it would
consider whether Internet providers should be allowed to
sell their high-speed service over the cable television
system.

Justices will hear two cases challenging a lower ruling
forcing cable companies to open their lines to Internet
competition. That October 2003 decision by the 9th U.S.
Circuit Court of Appeals has been stayed pending the
outcome of appeals.

At issue is whether cable-based broadband is a
``telecommunications service'' that makes it subject to the
same FCC rules that phone companies must adhere to -- such
as allowing access to independent Internet providers.

The 9th Circuit said yes, and reversed an FCC regulation
passed in March 2002 exempting cable companies from rules
forcing phone carriers to share their networks. The FCC had
reasoned that high-speed Internet over cable was just an
``information service'' that made it different from phone
companies.

At the time, agency officials said the move was necessary
to spur more investment in high-speed Internet services.
Cable companies have invested billions of dollars in
upgrading their networks.

But the FCC ruling left phone companies, which offer rival
digital subscriber lines, at a disadvantage. Though they
must pay for upgrades, they're subject to more regulation,
including a much-debated rule requiring them to lease their
infrastructure to rivals.

The challenge is being brought by the FCC and the National
Cable & Telecommunications Association in two appeals. They
argue that a 1984 Supreme Court ruling requires courts to
defer to a federal agency's expertise in deciding the best
policy.

The appeals are opposed by Internet service providers and
consumer groups, who say the FCC rule is anticompetitive
and will lead to higher rates.

Though there are alternatives for high-speed access such as
telephone line-based DSL, fixed wireless and satellite, an
estimated 60 percent of high-speed Internet users subscribe
to their cable company's service, according to recent
studies.

That has been harmful to independent Internet providers who
lost customers to cable and large telephone companies.
Consumers Union, the publisher of Consumer Reports
magazine, said three-fourths of all independent ISPs have
gone out of business in the past five years.

The cases are National Cable & Telecommunications
Association v. Brand X Internet Services, 04-277; FCC v.
Brand X Internet Services, 04-281.

------

On the Net:

Supreme Court: http://www.supremecourtus.gov/


http://www.nytimes.com/aponline/national/AP-Scotus-Internet- 
Access.html?ex=1103100081&ei=1&en=11592b3c429469b9


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