Policy

DOJ Appeals Cable-Modem Case

8/30/2004 4:26 AM Eastern

The Bush administration, coming to the aid of the cable industry, has asked the U.S. Supreme Court to strike down a ruling that could expose cable’s high-speed-data service to a host of open-access rules favorable to competitors.

The Justice Department’s Office of the Solicitor General filed a brief Friday asking the high court to overturn a ruling by the U.S. Court of Appeals for the 9th Circuit in Brand X Internet Services vs. the Federal Communications Commission.

The 9th Circuit’s October 2003 decision held that cable-modem service was in part a telecommunications service, exposing cable operators to federal rules that would force them to share their networks with competing Internet-service providers at regulated rates.

The ruling vacated an FCC order that cable-modem service was an unregulated information service. The 9th Circuit’s ruling relied on a precedent adopted prior to the FCC’s order, and the court did not evaluate the substance of the agency’s ruling, saying it was bound by its decision in an earlier case.

In a 29-page brief, Solicitor General Paul Clement argued that the 9th Circuit should be reversed because the court had “incorrectly overridden the expert agency responsible for administering and interpreting” federal communications law.

Clement said that if the 9th Circuit ruling were to stand, the FCC would be forced to regulate cable modem service as a regulated telecommunications service, “even though the [FCC] has concluded that such regulation is inconsistent with, and would directly threaten, the important federal policy of promoting access to those services.”

The FCC correctly concluded that cable-modem service is solely an information service and urged the court to take the case because it represented “an issue of exception national importance,” the brief added.

“If allowed to stand, the 9th Circuit’s decision would fundamentally change the regulatory environment in which cable modem services are offered,” Clement said.

Since its inception in the mid-1990s, cable-modem service has not been regulated because the FCC maintained that regulation would discourage investment and deployment of a promising new technology for millions of computer usersBush Administration, coming to the aid of the cable.

As of March 31, cable operators served 17.3 million cable-modem subscribers and made the service available to 95 million homes.

NCTA CEO Robert Sachs said reversal of Brand X was important to the industry.

“The reversal of the Brand X decision is important because, if affirmed, it would impose on cable-modem service cumbersome regulation that would deter innovation and development of broadband services and technology in the United States,” he said. “We are pleased that the FCC and Department of Justice have called on the Supreme Court to reverse this decision.”