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FCC, Justice Seek to Overturn High-Speed Internet Ruling

Aug 30, 2004  •  Post A Comment

The Federal Communications Commission and Department of Justice announced today that they have asked the U.S. Supreme Court to overturn a federal appeals court decision that could subject cable’s high-speed Internet service to the same sort of common carrier regulation that phone companies face.

The FCC had defined cable modem service in a way that allowed the agency to shield it from regulation. But in its “Brand X” decision in October 2003, the U.S. Court of Appeals in San Francisco held that the agency’s regulatory classification overreached.

In a statement today, FCC Chairman Michael Powell said overturning the appellate court would ultimately result in lower prices and better service for consumers. “Applying taxes, regulations and concepts from a century ago to today’s cutting-edge services will only stifle innovation and competition,” Mr. Powell said.

Added Robert Sachs, president and CEO of the National Cable & Telecommunications Association, “The reversal of the Brand X decision is important because, if affirmed, it would impose on cable modem service cumbersome regulation that would deter innovation and development of broadband services and technology in the United States.”

But a coalition of watchdog groups said the Bush administration’s decision to challenge a ruling that could force cable operators to open their high-speed networks to competing Internet service providers is a blow to consumers.

“This is another dark day for competition and consumers in one of the most vital sectors of our economy,” said Mark Cooper, research director for the Consumer Federation of America.