9th Circuit to Hear Data-Ruling Appeal

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A federal court that once classified cable-modem service as partly a telecommunications service has been picked to decide whether the Federal Communications Commission was right in classifying it as an information service.

The selection of the 9th U.S. Circuit Court of Appeals as the venue for the case pleased consumer groups. The reason: that court has defined cable-modem service in a manner that indicated cable operators would have to carry unaffiliated Internet-access providers — a mandate the industry has been attempting to avoid for years.

"We are not unhappy with the Ninth Circuit. The Portland case is already there," said Andrew Jay Schwartzman, president of the public interest law firm Media Access Project.

The Portland case refers to the dispute two years ago between AT&T Broadband and Portland, Ore. The city refused to transfer a cable franchise to AT&T unless the cable operator agreed to carry competing ISPs.

The San Francisco-based Ninth Circuit judges ruled that Portland's ordinance was illegal under federal cable law, because it required AT&T to provide a telecommunications service. The three-court panel reached that decision by finding that cable-modem service was partly a telecommunications service and an information service.

"Circuits are bound by their own decisions," Schwartzman said.

THIS ISN'T PORTLAND

Washington cable attorney John Seiver of Cole, Raywid & Braverman disagreed. He said the appeal of the FCC's decision was a separate issue that the court would review under a different legal standard. The Portland case, he said, involved litigation between a city and a cable operator.

"I do not believe [Portland] will have any controlling precedent because it's an entirely different context," Seiver said. "The [FCC's] classification was based on a completely different record and different considerations."

But Seiver acknowledged that the Portland ruling would "play some sort of a factor" in the pending FCC case.

Appeals of the FCC's cable-modem classification were filed in the Ninth Circuit and the U.S. Court of Appeals for the D.C. Circuit. In such a circumstance, a judicial panel on multidistrict litigation randomly selects one of the courts to take the case.

Verizon Communications Inc., EarthLink Inc. and three consumer groups — including Schwartzman's MAP — filed in the D.C. Circuit. Brand X Internet LLC, based in Santa Monica, Calif., filed in the 9th Circuit.

Schwartzman said his decision to file in the D.C. Circuit was strategic. If the D.C. Circuit ruled in favor of the FCC, MAP could use the split between it and the 9th Circuit as the basis for seeking Supreme Court review.

The case going before the Ninth Circuit stems from the FCC's March 15 ruling that cable-modem service is neither a cable service nor a telecommunications service, but an information service.

For the time being, the FCC said cable operators are not required to carry competing Internet providers. However, the agency has opened a new rulemaking to decide whether access requirements are necessary or appropriate.

FCC IS CONFIDENT

The agency is expected to wrap up that rulemaking by the end of the year. It's possible that the Ninth Circuit would postpone the case until after the agency had settled cable-access policies.

Although FCC officials were hoping the case would land in the D.C. Circuit, they said they were confident that their classification of cable-modem service was legally sound and would be upheld in the 9th Circuit.

The FCC could ask for the case to be shifted to the D.C. Circuit, but Schwartzman said the agency would be wise not to do so. That's because in the past year, the D.C. Circuit struck down key FCC cable-ownership rules and the regulation banning common ownership of a cable system and a TV station in the same market.

The D.C. Circuit also returned the rule limiting one TV station owner to reaching no more than 35 percent of TV households nationally to the FCC, for further review.

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