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Washington—Nothing less than the “future of the Internet,” say some experts, is the backdrop for arguments this week in the U.S. Supreme Court over classification of cable modem services. Broadband—high speed—Internet access services reach more than half of all Internet subscribers. Among all high-speed providers, cable broadband service reaches the greatest number of homes—more than 19 million in this country. The Federal Communications Commission (FCC) and the National Cable & Telecommunications Association are asking the high court to overturn a 2003 ruling by the 9th U.S. Circuit Court of Appeals, which held that cable broadband service is a “telecommunication service” and not an “information service” as classified by the FCC. Classification under the Telecommunications Act of 1996 is crucial because it determines what kind of regulations will apply to the service. And those regulations determine what kind of access cable modem operators would have to give to Internet service providers, such as Brand X and Earthlink. Discourage innovation? Brand X, Earthlink, the Center for Digital Democracy and a host of consumer, civil rights and state utility regulation groups defend the 9th Circuit’s classification, which, they contend, requires nondiscriminatory access to high-speed Internet services and prevents absolute control by the cable industry over broadband access. But the FCC, the cable industry and telephone companies concerned about their DSL high-speed services contend that the 9th Circuit’s approach, which requires more intensive regulation, will discourage broadband innovation and investment and consequently deployment of cable broadband services. National Cable & Telecommunications Ass’n v. Brand X Internet Services, No. 04-277; FCC v. Brand X Internet Services, No. 04-281. “I think the unusual thing about the case is the ’96 act was promoted as a means of updating this antiquated telecommunications legal system,” said telecommunications expert Jonathan Massey, an appellate attorney in Maryland. “It’s ironic the ’96 act does not directly address what is for millions of people a central issue: What’s the nature of their Internet access when they have broadband?” The 1996 act provides for two types of services: the heavily regulated “telecommunications service,” and the least-regulated “information service.” In the high court, the government and the cable industry, represented by Howard Symons of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo’s Boston office, argue that the FCC reasonably applied those definitions to conclude that cable modem service is an information service, without a separately regulated “telecommunications service” component. The FCC had concluded earlier that traditional Internet service providers should be classified as information services under the act. Cable modem service, according to the FCC, is at its heart “simply another form of Internet access service,” according to the government. “Classifying cable modem service as a telecommunications service would drastically change the regulatory environment for cable modem service,” said the solicitor general in the government’s brief. New costs and other regulatory burdens, he added, “could lead them to raise prices or forgo new investment, particularly in rural and underserved areas.” Brand X and Earthlink, represented in the arguments by Thomas Goldstein of Goldstein & Howe in Washington, argue that cable modem service is a combination of high-speed telecommunications and additional information-processing services, such as e-mail. If cable companies sold the telecommunications link standing alone, they would be offering a “telecommunications service” subject to regulation as a common carrier. The FCC classification produces an “absurd” result that Congress could never have intended: “that a carrier can effectively deregulate itself through the nicety of combining its regulated offering with some other service,” they said. Ellen S. LeVine, counsel to the California Public Utility Commission, who filed an amicus brief for state utility commissions and consumer groups, said: “If this isn’t considered common carrier service, then cable and phone companies can charge whatever they want. Where consumers don’t have a choice, they will be basically at the mercy of that provider.”

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