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Policy

Cable, DOJ Pitch Modem Dereg

1/23/2005 7:00 PM Eastern

Washington— Providing high-speed Internet access should not trigger mandates designed to open cable networks to all data competitors, the cable industry told the U.S. Supreme Court in a filing last Tuesday.

The National Cable & Telecommunications Association, joined by three major cable companies, asked the high court to shield cable-modem service from forced-access mandates and back deregulatory policies adopted by the Federal Communications Commission in March 2002.

POLICIES IN DOUBT

But those FCC policies are now in doubt after the 9th U.S. Circuit Court of Appeals determined that open-access rules apply to cable’s data service, unless the FCC uses its forbearance authority to remove them.

The Supreme Court has agreed to review the 9th Circuit’s decision. The case is NCTA, et al. vs. Brand X Internet Services, et al. The cable trade group has the formal support of the Department of Justice, which in a separate brief urged the court to overturn the 9th Circuit.

The high court will hear one hour of oral arguments on March 29.

In a 37-page brief, the NCTA said the 9th Circuit should have backed the FCC’s conclusion that cable-modem service is an unregulated information service, mainly because the agency deserved deference when interpreting imprecise statutory language.

“Applying that framework, the FCC’s decision readily passed muster. The judgment of the court of appeals should therefore be reversed,” the NCTA said in a brief supported by Time Warner Cable, Cox Communications Inc. and Charter Communications Inc.

The 9th Circuit found that cable offered not only an information service but also a telecommunications service, with the latter triggering the access requirements intended for use by competing Internet-service providers at regulated wholesale rates.

Normally, all federal courts are required to defer to the FCC’s interpretation of ambiguous law. The FCC insisted that the law was vague because cable-modem service is not clearly defined in telecommunications statutes.

But the 9th Circuit did not show the FCC deference because the court had ruled in June 2000 that cable-modem service was partly a telecommunications service and was bound by that decision, despite the fact that the earlier case did not involve review of an FCC order.

EarthLink Inc., other Internet-service providers and consumer groups support the 9th Circuit’s ruling, viewing it as a mechanism for leasing cable capacity under rules that currently apply to Verizon Communications Inc., BellSouth Corp. and other phone companies.

RATES WOULD RISE

In its brief, the Justice Department argued that application of open-access rules would raise consumer rates and freeze cable’s investment in broadband facilities.

In addition to having to open their lines, cable operators would be required to contribute modem revenue to a telephone-subsidy program, perhaps pay higher telephone pole-attachment fees and would need to absorb the cost of engineering their networks for interconnection with other common carriers, the DOJ said.

“Classifying cable-modem service as a telecommunications service would drastically change the regulatory environment for cable-modem service,” the DOJ said.

September