Supreme Court Backs Cable in Pole Case

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In a decision that could promote the affordability of broadband Internet,
the Supreme Court ruled Wednesday that cable operators are entitled to regulated
rates when attaching data-transmitting wires to poles and conduits controlled by
utilities.

The high court, in a 6-2 decision written by Justice Anthony Kennedy,
overturned a lower-court decision that required cable to pay market rates for
pole attachments when offering data services -- a holding that could have led to
higher cable Internet fees or deterred cable operators from deploying broadband
facilities.

Joining Kennedy were Chief Justice William Rehnquist and Justices John Paul
Stevens, Antonin Scalia, Ruth Bader Ginsburg and Stephen Breyer.

Justices Clarence Thomas and David Souter agreed with a key holding in the
opinion but filed a partial dissent that faulted the Federal Communications
Commission's regulatory treatment of cable Internet services.

Justice Sandra Day O'Connor did not participate.

Under the Supreme Court decision, the FCC regained the authority to establish
pole rates when cable operators commingle video and data services on the same
wire.

A panel of the U.S. Court of Appeals for the 11th Circuit stripped that
authority in a decision released in April 2000.

The 11th Circuit said the FCC did not have authority to regulate pole rates
when cable provided data because rate regulation applied to cable services and
telecommunications services.

The lower court said cable-provided data was neither a cable service nor a
telecommunications service, but more likely an information service. The court
made that determination even though the FCC has yet to classify cable Internet
service.

In reversing the lower court, the Supreme Court endorsed the cable industry's
reading of a federal pole-attachment law that the FCC had the authority to
regulate 'any' cable attachment.

The high court said it would not fault the FCC for establishing pole rates
for cable Internet while at the same time declining to classify cable Internet
as a rate-protected cable service.

In a 13-page opinion, Kennedy said Congress wanted to spur the rollout of
broadband, and it did not intend to strip cable operators of pole-rate
protections when cable systems expanded service beyond traditional video
programming.

'The congressional policy underscores the reasonableness of the FCC's
interpretation: Cable attachments providing commingled services come within the
ambit of the [Pole Attachments] Act,' Kennedy wrote.

The Supreme Court's ruling paves the way for the FCC both to classify cable
Internet as an information service and to shield cable operators from monopoly
pole rents.

Cable-industry and other sources are predicting that the commission is
planning to classify cable Internet as an information service, and not as a
cable service.

In their dissent, Thomas and Souter said that although the FCC may well have
authority to regulate 'any' cable attachment, they would have reversed the 11th
Circuit and instructed the agency to 'decide at long last whether high-speed
Internet access provided through cable wires constitutes cable service or
telecommunications service, or falls into neither category.'

Thomas and Souter said the FCC engaged in arbitrary and capricious decision
making when it decided to apply pole-rate protections to cable Internet prior to
establishing the regulatory classification of cable Internet.

The case was National Cable & Telecommunications Association vs. Gulf
Power Co.

'Today's decision is very good news for consumers,' NCTA senior vice
president of law and regulatory policy Dan Brenner said in a prepared
statement.

'It means that utility companies cannot charge
arbitrarily higher prices for cable attachments to utility poles simply because
cable operators provide their customers with high-speed Internet, as well as
video services,' he added.

'I am pleased by the Supreme Court's decision upholding the FCC's authority
to set rates for attachments to telephone and electric poles,' FCC chairman
Michael Powell said in a prepared statement.

'It is important that the court rejected an interpretation of the
Communications Act that could have raised the rates consumers pay for high-speed
Internet-access services and derailed the broadband revolution,' Powell
added.

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