Bush Administration Takes Up Brand X Appeal
The FCC has a better chance of getting the U.S. Supreme Court to hear the Brand X cable modem appeal because the U.S. Solicitor Gen. joined the Commission’s appeal, several attorneys told us. Last week, the DoJ joined the FCC in an appeal of the U.S. Appeals Court, San Francisco, 3-judge panel ruling (CD Oct 7/03 p1) striking down the FCC’s decision that cable modems should be classified as an information and not a telecom service. “I think the fact that you have essentially the U.S. government taking on this issue bears some significance,” said attorney Frank Jazzo.
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The Solicitor Gen. doesn’t always take the FCC’s cases. The FCC can appeal on its own to the Supreme Court, but the Commission doesn’t carry the same weight in the eyes of the court as the Solicitor Gen., Jazzo said. “The decision [to appeal] generated some controversy in the Justice Department as whether this case should be heard at all,” said Media Access Project Pres. Andrew Schwartzman. The DoJ didn’t join the FCC’s rehearing petition before the full 9th Circuit, which was denied, Schwartzman said.
FCC Chmn. Powell praised the Bush Administration’s decision to take up the case: “This is about ensuring that high-speed Internet connections aren’t treated like what they're not: telephones. Applying taxes, regulations and concepts from a century ago to today’s cutting edge services will only stifle innovation and competition.” NCTA Pres. Robert Sachs agreed: “If affirmed, it would impose on cable modem service cumbersome regulation that would deter innovation and development of broadband services and technology.”
The Supreme Court has good reason to take the case because circuits have ruled differently on the matter, said attorney To-Quyen Truong. But she stressed that it’s often difficult to predict how the Supreme Court will rule. The court panel said it was bound by the 9th Circuit’s earlier decision in AT&T v. Portland, which labeled cable modem a telecom service. The Commission contended that the panel judges applied wrong standard to conclude that cable-delivered Internet service was an information service with telecom components, essentially leaving it open to common carrier regulation. The FCC said the panel instead should have relied on the Chevron standard, which gives a federal agency leeway to adopt a “reasonable interpretation” of an otherwise ambiguous statute. “Absent this Court’s review, therefore, a vastly important aspect of national telecommunications policy will have been settled in the 9th Circuit, and for all practical purposes throughout the country, without any evaluation whatever of the FCC’s contrary interpretation of the statute it is charged with administrating,” the Solicitor Gen. and FCC said.
EarthLink said it didn’t believe the FCC and the cable companies will get Supreme Court review. “They are just delaying the inevitable,” said Dave Baker, EarthLink’s vp-law & public policy: “Instead of fighting to protect cable monopolies, the FCC should recognize that cable modem and other broadband users deserve choice in high-speed Internet providers.”
Consumer groups said the decision to appeal was a blow to competition and diversity in the telecom industry. “This is another example of the Administration’s policies that favor the major media and telecom companies at the expense of small competitors who offer consumers the potential for more choices, lower prices and greater diversity of viewpoints,” said Gene Kimmelman, senior public policy dir. for Consumers Union.