Brand X case may open legal Pandora’s box for broadband

The telcos see a legal opening that could give them similar exemptions from sharing their infrastructure
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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 — who want to deliver entertainment programming over new high-speed broadband networks — to ask for the same. If they are successful, it would fundamentally change American communications policy and give network owners new control over the content they deliver.

While proponents of open access suffered a major setback in the 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, Wired Magazine reported. 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 argued that the industry simply doesn’t want to face competition from new broadband ISPs riding 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, CA.

Brand X — supported by the wider ISP community and consumer groups — 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 said the commission was in a far better position to address those questions.

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

Last Monday, Tom Tauke, Verizon executive vice president, called on the FCC and Congress to give telcos the same deregulatory treatment enjoyed by cable operators.

The cable industry, which has supported regulatory parity between cable and telco firms, promised that it wouldn’t lobby against any such effort — whether in Congress or the FCC.

In the meantime, consumer groups argue the Supreme Court decision will result in fewer broadband providers.

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