Adelstein Opposed to Brand X Appeal


The federal government should decline to seek Supreme Court review of a major cable-modem case that could provide EarthLink Inc. with regulated access to cable’s high-speed-data plant, Federal Communications Commission member Jonathan Adelstein said Thursday.

The cable industry is planning to appeal the decision, but it’s unclear whether the industry will obtain support from the Department of Justice, which has been feuding with the FCC over the proper classification of cable-modem service.

In a meeting with reporters, Adelstein said the FCC would be better off accepting the ruling by the U.S. Court of Appeals for the Ninth Circuit and relying on its regulatory forbearance authority to remove unnecessary regulations that would apply to cable-modem service.

“I really don’t see any reason myself to seek [Supreme Court review] on the case,” Adelstein, a Democrat, said. “I think we can operate within the bounds of that decision and accomplish the goals of deregulation through other means, such as forbearance.”

The Ninth Circuit held that cable-modem service is partly an information service and partly a telecommunications service. Although information services are largely unregulated, telecommunications-service providers are required to make their transport facilities available on nondiscriminatory terms and conditions -- forced-access mandates that cable has been fighting for years.

As result of the decision, competing Internet-service providers such as EarthLink would have a legal right to lease bandwidth from cable operators at wholesale rates.

The DOJ is reluctant to back the FCC’s position that cable-modem service is entirely an information service because it is concerned that such a classification would frustrate its ability to track criminals who use the Internet.

The deadline to file with the Supreme Court is June 29. A few weeks ago, FCC chairman Michael Powell declined to reveal whether he had secured DOJ cooperation in taking the case -- know as Brand X Internet Services vs. FCC -- to the high court.

Adelstein said his position was that the commission’s authority to forbear was clear in the law, while its authority to classify cable-modem service as an information service was not. He added that the FCC would minimize legal risk by relying on forbearance authority.

“The good thing about the [Ninth Circuit] decision is that it maybe teaches us a lesson that we need to stop these endless debates about classification and get to the real point of how do you treat these services under the rules,” he said. “The classification debate, I think, is sort of a cul-de-sac.”

Two weeks ago, Comcast Corp. CEO Brian Roberts told the Senate Commerce Committee the Brand X case was one of the biggest regulatory risks facing his industry. He added that the uncertainty was heightened by the fact that it was unclear whether the DOJ would ask the Supreme Court to vindicate the FCC’s information-services classification.