Will “Brand X” case open legal Pandora’s Box for broadband?

While proponents of open access suffered a setback in the so-called “Brand X” case, the telcos see a legal opening that could give them similar exemptions from sharing their infrastructure
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Telcos, hungry to avoid government regulations and to deliver entertainment programming (including television) over new high-speed broadband networks, watched closely as the cable industry won a major case before the U.S. Supreme Court that allows them to lock the door on competitive ISPs wanting access to their systems.

Now expect the telcos to ask for the same — a development that could fundamentally change American communications policy and give network owners immense new control over the content they deliver.

While proponents of open access suffered a major setback in the so-called Brand X case, the telcos see a legal opening that could give them similar exemptions from line-sharing rules.

The fight focuses on arcane legal issues, but holds serious consequences for consumer broadband prices and quality of service. Cable operators have resisted the concept of open access for years, arguing that it would unfairly saddle the industry with new regulations and create potential technical problems. Critics counter that the industry simply doesn’t want to face competition from new broadband ISPs using its wires.

The case decided last week pitted the National Cable & Telecommunications Association (NCTA) and the FCC against Internet service provider Brand X Internet of Santa Monica, California.

Brand X — supported by the wider ISP community and consumer groups — had asked the Supreme Court to affirm an October 2003 decision by the 9th U.S. Circuit Court of Appeals. The lower court favored Brand X when it found that cable-modem service is partly a telecommunications service and therefore should be subject to the same line-sharing rules that govern broadband DSL services run by telephone companies.

In 2002, the FCC had classified cable-modem service as an information service not subject to traditional telephone rules that would require leasing lines to competitors.

In a majority opinion written by Justice Clarence Thomas, the Court ruled “the Commission is in a far better position to address these questions than we are.”

As it stands now, independent Internet service providers that lack a wire into the home —including Earthlink and Brand X — are effectively shut out of the market.

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