FCC to Seek Cable-Modem Rehearing

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The Federal Communications Commission plans to seek rehearing from the U.S. Court of Appeals for the Ninth Circuit regarding an October ruling that tossed out the agency's classification of cable-modem service.

The FCC had the option of filing an appeal with the U.S. Supreme Court. But commissioner Kathleen Abernathy told reporters Wednesday that the agency would seek rehearing, also called en banc review. "We are going to go en banc," she said.

A three-judge panel of the Ninth Circuit held that it was bound by a decision in 2000 that cable-modem service was both an information service and a telecommunication service. As a result, the panel, without analyzing the substance of the FCC's order, vacated the FCC's March 2002 ruling that cable-modem service was exclusively an information service.

If the Ninth Circuit's ruling were to stand, cable-modem service could become subject to common-carrier regulation -- something the industry wants to avoid. The FCC, however, has forbearance authority to exempt cable-modem service from traditional telecommunications regulation.

Abernathy explained that the Ninth Circuit's decision cast a cloud over the FCC's larger broadband agenda. The agency tentatively decided that a phone company that offered retail digital-subscriber-line service was not offering a telecommunications service.

"I think it puts things on hold," she added. "What this means is that we are going to, I think, have to be at a standstill for a little bit while we see what happens in the court, because I think it would be not wise to more forward while we've got this litigation strategy."

If the Ninth Circuit grants en banc review of the cable-modem case, the FCC could renew the DSL-classification proceeding, Abernathy said.

"That's an option. If they decide to grant rehearing en banc, we could go forward," she added.

Abernathy, chairman Michael Powell and commissioner Kevin Martin comprise the FCC's Republican majority.

On other issues, Abernathy said she was still debating whether mandating cable carriage of multiple digital-broadcast signals violates cable's First Amendment rights. She said the issue could be voted on at the agency's Dec. 17 meeting.

And she said she supported Powell's decision to involve the agency in the Internet-protocol-telephony issue. A public forum is tentatively scheduled for early December.

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