A group of ISPs (Internet service providers) on Tuesday will ask the U.S. Supreme Court to require broadband cable providers to share their networks with competitors, just as incumbent U.S. telecommunications carriers were required to share their DSL (Digital Subscriber Line) networks during the past five years.
U.S. broadband customers would have more choices of providers, and the new competition could drive down prices if the Supreme Court rejects a U.S. Federal Communications Commission (FCC) attempt to classify cable modem service as an unregulated information service, say the ISPs pushing for cable-sharing rules.
Supporters of the FCC action say broadband adoption in the U.S., hailed by President George Bush and other politicians as an engine of economic growth, would slow if cable providers were forced to share their networks with competing ISPs. Cable providers would have less incentive to improve connection speeds and otherwise upgrade their networks if they have to sell their networks at wholesale prices to competitors, said Dan Brenner, senior vice president for law and regulatory policy at the National Cable and Telecommunications Association (NCTA).
A government effort to determine wholesale prices would put the cable industry in regulatory limbo, Brenner added. "Practically, how do you get from what we have today to (wholesale pricing) without a heavy-handed government intervention?" he said.
The Brand X vs. FCC case -- named for Brand X Internet LLC, an ISP that challenged the FCC's cable modem rules -- is one of two technology-related cases the Supreme Court will hear Tuesday. In the other case, the court will decide whether the U.S. entertainment industry can sue peer-to-peer software vendors for their users' copyright violations.
The Brand X case is tied to complicated FCC policy focused on how telecom carriers and Internet providers are regulated. The FCC has traditionally required the four large incumbent local telecom carriers, often called the regional Bells, to share parts of their networks with competitors at wholesale prices.
The incumbent Bells inherited large parts of their networks after the breakup of the old AT&T government-sanctioned monopoly in 1984. Congress, in the Telecommunications Act of 1996, required the FCC to establish network-sharing rules, with the goal of increasing competition for local phone service.
The FCC ruled in November 1999 that the incumbent Bells had to share their DSL lines with competitors. The regional Bells argued that DSL and cable modem service should enjoy the same regulatory treatment, and in February 2003, the FCC voted to phase out rules requiring the Bells to share residential DSL lines at discounted rates.
The FCC has taken a different approach with cable modem service, ruling in March 2002 that cable modem service was an information service not subject to the same regulation as telecom services. The FCC suggested then that less regulation would foster the growth of broadband, and by extension, the Internet.
ISPs, including Brand X Internet and Earthlink, appealed the FCC cable modem ruling, and in October 2003, the 9th Circuit Court of Appeals overturned the FCC decision.
Consumer groups, including Consumers Union and the Consumer Federation of America, have weighed in on the Brand X case, saying that additional ISP choices will be good for consumers and will encourage more U.S. residents to adopt broadband.
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