When Brand X, a California ISP, gets its day in the Supreme Court on Tuesday, there will be a lot more at stake than whether the company can get access to cable lines. In fact, depending on the details of the court decision, the case could determine the way in which the Federal Communications Commission regulates phone and information companies.
At the core of the case is Brand X. The ISP wants the FCC to require cable companies to sell access to their networks at wholesale in much the same way that EarthLink Inc. and other ISPs are sold access over DSL networks.
The FCC has ruled that cable is an information service, and as such is not regulated by FCC rules. Because of this concept, the FCC has preempted rules that would tax phone service using cable lines, and state laws that require 911 access for people who use VOIP over cable.
Complicating matters is a decision by the 9th U.S. Circuit Court of Appeals, which, in a case involving AT&T and the city of Portland, Ore., said that cable service contains elements of both telecom and information services. At the time, the city was trying to require AT&T to provide open access to third-party ISPs as a part of its franchise negotiations.
The FCC tried a number of end runs around the courts, but eventually the 9th Circuit said that only the Supreme Court or Congress could overrule it. Finally, the FCC was forced to appeal the decision to the Supreme Court.
“The line thats drawn is between telecommunications services that are heavily regulated and information services which arent,” explains Washington communications attorney John Logan. Logan is the former acting chief of the FCCs Cable Services Bureau, and is now in private practice.
“This brings everybody back to when we had one phone company,” Logan said. “The FCC and the state commissions had an obligation to make sure everybody had phone service and make sure everybody got a rate of return,” he said. “With information services, regulators tried to set up something to attract investors.”
Logan said that the need to attract investors was the reason for so little regulation. But he also said that at some point, the public interest demands at least some regulation.
Logan said that quite a bit of the current controversy surrounding how phone companies and cable companies are regulated has to do with the fact that theyre both providing many of the same services.
Phone companies, for example, are already in the process of upgrading networks to provide television programming over DSL lines. Cable companies, meanwhile, are providing phone service, and both are providing other digital services, including high-speed Internet access and other types of broadband communications.
This overlap had a big role in the decision of the 9th Circuit Court, but its not clear that it will prove definitive for the Supreme Court. Logan said that what needs to be done instead is for Congress to provide some rules. But at this point, Logan doesnt think the Court will seize the opportunity to clarify when a digital service is or isnt an information service. Instead, he said he thinks the court may defer to the FCC.
“I think the FCC has a more reasoned argument as to why this evolved,” Logan said. He added that he thinks the FCC position brings a clarity to the issue that he thinks the court will embrace. Logan said that one reason the circuit court made the decision it did was because of the Portland case.
“The 9th circuit was examining a previous case as to whether cable modem service was really cable service. Portland wanted to have open access,” he said. “One point is the authority of local government over cable service. On the other hand is the question of whether cable modem service is like cable programming, which its not really,” Logan explained. “It wasnt really the same question.”
“The supreme court gets a chance to look at it fresh,” Logan said, whereas, “the 9th circuit said that we have to go with what a previous court said about cable service versus telecommunications service.”
A decision in this case is expected this summer.