Policy

Three Bells Support DOJ’s Brand X Appeal

9/21/2004 9:34 AM Eastern

Three Baby Bells have joined the Department of Justice in the effort to overturn a court ruling that could require cable operators to open their high-speed-data lines to competing Internet-service providers.

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

The National Cable & Telecommunications Association has also appealed.

The three Bells are concerned that if the Supreme Court does not strike down the ruling in Brand X Internet Services vs. the Federal Communications Commission, the FCC will be denied the authority assigned it by Congress 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 the agency later proposed to accord the same treatment to the Bells’ digital-subscriber-line service.

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

The Bells said the regulatory status quo had to change in order 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.

Critics of the FCC’s cable-modem decision have said that the agency, despite the holding in Brand X, may advance its deregulatory agenda by using forbearance authority to remove needless regulations.

But Verizon said a forbearance proceeding would be "hotly contested" and litigated, causing delays that “would only worsen the uncertainty that has already plagued the broadband industry.”

SBC and BellSouth, in a joint filing, said the Brand X decision interrupted the FCC’s effort to ensure that the Bells enjoyed the same regulatory freedom as cable-modem providers. The Bells said it was unfair that as nondominant 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 fact that the Ninth Circuit overturned the FCC’s cable-modem decision based on a precedent established in 2000, meaning that the agency was denied a review that another appeals court not bound by that precedent would have conducted.

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

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