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In a high-stakes dispute over the regulation of Internet access, the Supreme Court struggled Tuesday over how much deference it should give to a 2002 Federal Communications Commission decision freeing cable modem providers from the rules that govern telephone companies. The outcome of National Cable & Telecommunications Association v. Brand X Internet Services could affect the cable industry’s share of broadband Internet access and whether cable will have to offer competitors’ Internet services on an equal footing with their own. Though the Bush administration and the cable industry made a strong argument for deference, the justices seemed surprisingly receptive to arguments by Internet services that are seeking access to cable lines in the same way that phone companies have to give access to competitors. Thomas Goldstein of D.C.’s Goldstein & Howe, arguing for the Internet companies, said that Congress from the beginning intended to treat cable services as a kind of telecommunications service, subject to common carrier regulation. The FCC’s 2002 ruling to the contrary, he argued, is a “legal error” that unfairly treats similar services differently. “There is absolutely no difference,” Goldstein said. Goldstein also asserted that Congress, in passing the Telecommunications Act of 1996, cannot possibly have intended to let the cable industry deregulate itself. But Paul Cappuccio, vice president and general counsel of Time Warner, who argued for the cable industry, said that defining cable modem service as an “information service” instead of a telecommunications service is “a classic example of what an agency does” and that it should not be second-guessed by the Supreme Court or the 9th U.S. Circuit Court of Appeals, which struck down the FCC ruling. Deputy Solicitor General Thomas Hungar also defended the FCC’s approach, arguing that the agency acted reasonably when it treated the combination of transmission and data processing services offered by cable modems as a new service — not just a repackaged telecommunications service. “If it is an integrated offering, it is in the information category,” said Hungar. Justice Antonin Scalia seemed the most resistant to the government’s argument, asserting that “if you sell the same combination over telephone lines, you call it a telecommunications service.” Justice David Souter, reflecting the concerns of several justices, also said he was having difficulty with the fact that the FCC had treated phone and cable services differently. Goldstein’s argument won points for fast footwork as well. As his half-hour before the Court drew to an end, Goldstein unexpectedly quoted from a Supreme Court decision announced by Justice Ginsburg barely 90 minutes earlier: City of Sherrill, New York v. Oneida Indian Nation of New York. Just as the Oneida tribe in the decided case should not be able to escape federal Indian law, Goldstein said, so too the cable industry should not be able to avoid telecommunications law. Even though the Oneida ruling involved an entirely different area of the law, Goldstein said, “The parallel is exact.” Goldstein said afterward that when he heard Ginsburg announce the Oneida decision at 10 a.m., he saw parallels to his case, left the Court chamber, obtained a copy from the clerk’s office, and read and analyzed the case before his own case began at 11 a.m. As Goldstein read from the fresh decision, several justices — and even some lawyers at the opposing counsel’s table — smiled broadly at his tactical ploy. Goldstein was the only lawyer arguing before the Court on Tuesday who was not a former Supreme Court law clerk.

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