RealTime IT News

Brand X Case Challenges Open Access Rules

The Supreme Court next Tuesday will hear a case involving the regulatory classification of broadband services.

At issue is a 2002 ruling by the Federal Communications Commission (FCC) that cable broadband 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) 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."

Chester added, "The open environment of the Internet was the source of dynamic innovation in the digital economy in the 1990s when nondiscriminatory access to telecommunications network was guaranteed."

The FCC, for its part, thinks the ruling 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."

Broadband services reach approximately half of all Internet subscribers. Cable broadband providers and incumbent carriers offering DSL dominate the market.

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.