Supreme Court Scrutinizes Regulatory Issues in ‘Brand X’
Rather than focusing on jurisdictional issues given prominent play in the plaintiffs’ case, the U.S. Supreme Court questioned plaintiffs in the Brand X cable modem case about how the FCC defines an information service. Justices Antonin Scalia and Stephen Breyer closely queried plaintiffs about the FCC’s classification of cable modem service as an information vs. a telecom service.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
“The justices appeared willing to grapple with the substantive issue themselves rather than sending the case to the lower court,” said a Legg Mason analysis. “Based on oral argument, we believe the Supreme Court will likely side with cable and Bell companies seeking a ‘bottom up’ approach to regulating” -- putting the burden on proponents of regulation. But ISPs have a fighting chance to get the Court to side with them on their “top down” approach to deregulating -- shifting the burden, Legg Mason said.
During the hour-long oral argument Tues., plaintiffs said the definition of an information service changes when there’s a bundled offering, a point Justice Antonin Scalia challenged: “How do you get that out of the definition” in the statute? “In some cases it is, in some cases, it isn’t?” Scalia said. Plaintiff’s lawyer Paul Cappuccio said combining cable’s pure transmission service and its computer-enhanced services creates “something new” -- an enhanced service or information service.
Cappuccio told the Court an ongoing proceeding at the FCC is to determine the regulatory framework for broadband over wireline -- which could bear on how the FCC regulates cable modem service. Whether cable should be regulated as a common carrier, he said, is a question for Congress to decide.
Respondents argued there should be no difference between a basic and enhanced service, so cable modem service ought to be regulated as a telecom service, consistent with previous court rulings. But cable has combined the services and said “we're no longer regulated,” said Thomas Goldstein, arguing on behalf of Brand X. “This argument would allow circumvention” of the law, Goldstein said.
“We grounded our arguments to the statute,” said Andrew Schwartzman, dir. of the Media Access Project and a party to the respondent’s case. “If [Justices] are going to look to the statute we will come out well” in the decision, he said. The Court is expect to make its decision in June.
“We believe the Supreme Court will affirm the Ninth Circuit’s decision” that cable modem is a telecom service, said Dave Baker, EarthLink vp-law & public policy: “To do otherwise would dismantle the very framework that has allowed the Internet to develop and would limit the promise of new technologies such as voice over IP, video over IP, mobile broadband and advanced communications services and applications.”
NCTA Senior Vp-Regulatory Policy Dan Brenner said he was pleased the court focused on “substance” rather than “procedures” in its questioning -- which showed Justices to have a good understanding of the government’s case. “The critical question in particular is whether the FCC has an appropriate role” in deciding the regulatory jurisdiction of cable modem service, he said. The justices’ questions indicated that some members think they [FCC] have an appropriate role.