WASHINGTON-In arguments before the U.S. Supreme Court, justices seemed skeptical the government could designate something an information service if it has elements of telecommunications.
“What I am still waiting to hear is how you get that out of the definitions?” asked Justice Antonin Scalia. “You tell us that the reason is that one has good consequences and the others are bad consequences.”
The Supreme Court heard oral argument in the Brand X cases-the National Cable & Telecommunications Association vs. Brand X Internet Services and the Federal Communications Commission vs. Brand X.
Brand X Services Inc. is an independent Internet services provider that wanted access to a cable system to offer its services to the cable operator’s cable-modem customers. The company was blocked when the FCC declared cable-modem service an information service and thus not required to provide open access to other companies.
The debate about what constitutes an information service vs. what makes a telecom service has ramifications for everything with requirements about open access-universal service, enhanced 911 and law-enforcement surveillance. Since information services also cannot be regulated by the states, the topic has drawn increased interest from the wireless industry.
Wireless pioneer Craig McCaw’s new company, Clearwire Corp., says its service is not a telecommunications service. According to Advanced IP Pipeline in a story that has been picked up by various blogs, Clearwire restricts access to voice over Internet protocol. While Clearwire did not immediately respond to a request for comment, its terms of service do allow the company to block some Internet usage.
“You may not use the service or take any action that will result in excessive consumption or utilization of Clearwire’s system or network resources, or which may weaken network performance, or adversely affects the performance of the service for other Clearwire customers, all as determined in Clearwire’s sole discretion,” according to terms of service available at clearwire.com.
The FCC recently reached a consent agreement with Madison River Communications of Merbane, N.C., which included a $15,000 fine and an agreement that the local telephone company would stop blocking Vonage Holding Inc. It is unclear whether the FCC could come to the same conclusion with cable companies or wireless Internet service providers like Clearwire. The Supreme Court’s ruling in Brand X is likely to add more clarity.
“The problem is that you can say it in the cable context but not in the wireline context,” said Justice David Hackett Souter. “You could require unbundling for cable.”
Both the U.S. government and NCTA tried to convince the court that cable operators cannot separate the Internet service provider part of cable-modem service from the transmission part of cable-modem service.
“The question is whether we are offering two products or one product with two components,” said NTCA’s lawyer Paul Cappuccio. “Cable-modem service is one product.”
Thomas Goldstein, arguing on behalf of Brand X, not surprisingly saw it differently.
“Cable-modem service is two things: high-speed access and e-mail,” said Goldstein. “The FCC admits that the access is a telecommunications service.”
Goldstein may have scored points with the court when he compared the Brand X situation with a decision announced less than two hours earlier by Justice Sandra Day O’Connor involving the Oneida Indian Nation of New York.
In the City of Sherrill vs. Oneida Indian Nation of New York, O’Connor said the Indian nation could not seek redress on its own without going through the process established by Congress. Goldstein likened that to Brand X where, he said, cable companies were trying to deregulate themselves although that was not what Congress intended.
“Congress could not have meant that cable could deregulate itself just by offering e-mail,” said Goldstein. “Congress made quite clear that there is no difference between a cable wire and a telephone wire.”
