News

Bells Back DOJ’s 'Brand X’ Appeal

9/26/2004 8:00 PM Eastern

The Baby Bells are supporting the Justice Department effort to overturn a court ruling that could require cable to open its high-speed-data lines to competing Internet-service providers.

BellSouth Corp., SBC Communications Inc., and Verizon Communications last Monday asked the U.S. Supreme Court to review a decision by the U.S. Court of Appeals for the 9th Circuit in San Francisco, which held that cable-modem service is subject to open-access requirements.

The National Cable & Telecommunications Association has filed a separate appeal. The three Bells are concerned that if the Supreme Court does not strike down the ruling in Brand X Internet Services v. the Federal Communications Commission, the FCC will be denied the authority that Congress assigned it to establish a national deregulatory approach to broadband services, regardless of the provider.

In March 2002, the FCC decided to keep cable-modem service deregulated and later proposed to accord the same treatment to Bells’ digital subscriber line service.

But the 9th Circuit’s reversal of the cable-modem decision froze the FCC from taking further steps to deregulate DSL providers, which must comply with open-access rules.

The Bells said the regulatory status quo had to change to fulfill the congressional goal of making broadband universally available at affordable rates.

“Impeding businesses in broadband at this critical time by requiring business to labor under a cloud of legal and regulatory uncertainty threatens to have lasting adverse effects on the deployment of new infrastructure,” Verizon said in its Supreme Court brief.

SBC and BellSouth, in a joint filing, said the Brand X decision interrupted the FCC’s effort to ensure the Bells enjoyed the same regulatory freedom as cable-modem providers.

The Bells said it was unfair that as non-dominant providers of high-speed data service, they had to cope with a Web open- access rule while cable did not.

“Indeed, in the wake of [the Brand X] decision, all of the FCC broadband regulatory proceedings have come to a screeching halt, leaving in place the uncertainty that has already plagued this critically important market for close to a decade,” SBC and BellSouth said in their brief.

All three Bells were critical of the 9th Circuit’s overturning the FCC’s cable-modem decision on a precedent established in 2000 — meaning the agency was denied a review that another appeals court not bound by that precedent would have conducted.

The 9th Circuit “arrogated to itself the responsibility of setting national telecommunications policy,” SBC and BellSouth claimed.

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