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NCTA Taking Cable-Modem Case to Supreme Court

4/06/2004 9:03 AM Eastern

The cable industry took the first step Tuesday toward asking the U.S. Supreme Court to strike down a ruling that exposed cable high-speed-data providers to mandatory carriage of competing Internet-service providers.

In a widely expected move, the National Cable & Telecommunications Association asked the U.S. Court of Appeals for the Ninth Circuit in San Francisco to stay its cable-modem classification ruling while the cable industry pursued an appeal with the Supreme Court.

The Federal Communications Commission was expected to seek a stay, as well, although it was unclear whether the Department of Justice would endorse the FCC's effort.

The NCTA and three large cable companies are challenging the Ninth Circuit holding that cable-modem service is partly a "telecommunications service" -- a designation that might require cable to open its data lines to EarthLink Inc. and other ISPs at regulated rates.

The Ninth Circuit's ruling -- made final March 31 when the FCC's rehearing request was denied -- was to take effect April 7, but the stay requests postponed the issuance of the court's mandate.

Cable companies have argued that a telecommunications-service classification, coupled with mandatory access requirements, would plague their ability to raise the billions of dollars that are needed to keep customers surfing the Internet at the fastest possible speeds.

In its stay request, the NCTA said the relief sought was appropriate because the outcome of the case was central to the FCC's policy of fostering the rollout of broadband to all Americans -- a goal recently endorsed by President Bush.

If the stay were denied, the cable trade group added, the effort by the FCC and various private parties to implement the Ninth Circuit's ruling could be a waste of millions of dollars in the event that the Supreme Court took the case and overturned the Ninth Circuit.

"Because all of these efforts would prove wasted if the Supreme Court reverses, a stay of the mandate would strongly serve the public interest," the NCTA said in its 12-page filing, joined by Cox Communications Inc., Time Warner Cable and Charter Communications Inc.In March 2002, the FCC held that cable-modem service was an interstate information service not subject to open-access rules. However, the Ninth Circuit ruled last October that cable-modem service was both an information service and a telecommunications service, and the court vacated portions of the FCC order in conflict with its decision.

Under FCC rules, telecommunications-service providers are required to provide nondiscriminatory access, such as making wholesale capacity available to third-party ISPs. Yet the agency has legal authority to forbear from applying open-access rules.

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