The Forgotten Supreme Court Deicsion

In all the hubbub surrounding the 10 Commandments cases, Kelo, and Grokster cases everyone seems to have forgetten another case handed down on Monday--National Cable & Telecommunications Association v. Brand X Internet Services that will have a more direct impact on our day to day lives than any other.

The issue in Brand X stems from a decision by the Federal Communications Commission to exempt from regulation broadband internet services provided by cable companies. Actually, that is not toally accurate, as Justice Thomas writes in the majority opinion:

In the order under review, the Federal Communications Commission concluded that cable companies that sell broadband Internet service do not provide "telecommunications servic[e]" as the Communications Act defines that term, and hence are exempt from mandatory common-carrier regulation under Title II. We must decide whether that conclusion is a lawful construction of the Communications Act (Brand X, 545 U.S. ___, *1).

The real subject of the case is the Communications Act of 1996 which set up a regulatory structure that no longer applies in 2005. In the 1996 Act, telecommunications were separated into two categories--telecommunication service and information services. Telecommunications service is the "offering of telecommunciations for a fee directly to the public regardless of the facilities used." An information service, on the other hand, is "the offering of a capabilityfor generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications." Brand X, at *5.

Of course those crystalline definitions provide no real guidance as to how cable internet is to be regulated at all--hence the controversy. Internet service provided by dial-up or DSL is regulated as a common carrier, meaning the the phone company who owns the lines going into your house (and they do), must permit other companies to use those lines for a reasonable and non-discriminatory fee. That means if your phone lines in your house were laid by Verizon, you have the option as a consumer to use MCI or SBC or any other telephone company for your phone and/or DSL connection and Verizon must honor that choice and allow that company access to the lines Verizon owns going into your house. Again, this is all because dia-up and DSL use phone lines, which are regulated as a telecommunications service.

The FCC makes a disticntion between DSL and internet cable based on a rather silly notion that consumers have no choice in. When a customer uses DSL, they must also choose an ISP (even though the DSL company is an ISP also--in most cases.). With a cable modem, there is no need to choose an ISP because the cable company serves as your ISP, even though you would be free to use another ISP as well. If you look carefully, you can see a chicken-and-egg argument. The cable company acts as your ISP because they can and the FCC doesn't require them to provide an option for a different DSL because they are a cable provider. Fun Huh?

Cable internet connections are labled as an information service--although they are in essence the same thing. This difference in definition seems to hold little relevance for the consumer, but it can make a big difference in your pocketbook, because under the FCC decision, affirmed by the Supreme Court on Monday in Brand X. The cable company, as an information service is not regulated as a common carrier. This means that competing companies offering internet connections via cable modems CANNOT force your cable company to provide access to the lines into your house.

So, if you live in my area, Adelphia provides your cable TV service (already a de facto monopoly) and they own the cable lines leading to your house. Since they own the "last mile" of cable, they own the pipeline into your house for cable internet service. Thus if you like the reliability of a cable internet, you have no choice but to go with Adelphia. Of course, as a monopoly they can charge you what they want. There is no competing service nor do they have to allow a competing service.

To be fair to the Supreme Court they are completly hamstrung by a poorly written law in desparate need of rewriting. In fact, many communications services, including cellular telephony, internet telephony and other new services available overseas, cannot move beyond their infancy here because of this law. As more decisions like Brand X and FCC rulings become commonplace and consumers get frustrated, there will be pressure on Congress to change the law. We need to get the 1996 Communications Act repealed and replaced with a law that does not distinguish between methods of delivery the information we receive.

Contact your Congressman and Senators and tell them to get busy so that rediculous decisions like Brand X are not forced on us.