ANOTHER FCC RULING FOILED, THIS TIME BY 9TH CIRCUIT

BY ALICIA MUNDY Bad things happen to the Federal Communications Commission and the TV/cable establishment when they get lured off their home turf. Last week, the notorious 9th Circuit Court of Appeals in San Francisco shot down the FCC’s ruling that cable modem service is an information service, thereby setting up a court battle over open access for ISPs to cable broadband networks. Both FCC Chairman Michael Powell and the National Cable & Telecommunications Association vowed to fight the Brand X v. FCC decision. The court support for open access impacts both the FCC’s right to regulate key industries and the cable industry’s control of broadband as a second stream of income. The ruling could mandate access for ISPs on a nondiscriminatory basis. But FCC officials suggested earlier that they would try to protect the cable broadband industry from standard common carrier regulations. Cable and NCTA lawyers had fought attempts by ISPs such as Earthlink and consumer groups such as the Consumer Federation of America and the Media Access Project to undo the FCC’s March 2002 vote. They did not want broadband defined as a telecom service, which put it on a par with common carrier/telephone companies, and therefore subject to a wide range of Title II regulations. “The cable industry will gnaw off its left foot before it allows itself to be under Title II,” said Harold Feld of the Media Access Project, who helped prepare the winning brief. The 9th Circuit setback comes a couple of weeks after another foreign entity, the 3rd Circuit Court of Appeals in Philadelphia, temporarily shut down implementation of the new media ownership rules and refused to send the case back to what the FCC and TV networks consider a friendlier home, the D.C. Circuit Court. Dan Brenner, NCTA legal counsel, said the 9th Circuit ruling was “legally erroneous.” He believes the court should have deferred to FCC judgment, because judges must let agency interpretations stand when Congressional statutes are ambiguous. But that’s a large part of the problem. First, at least one of the three judges who ruled against the FCC indicated that the Congressional statute clearly defines services such as cable broadband as “telecommunications.” Second, and perhaps more important, said Feld, the FCC didn’t fight for a definition of “information service” when the case was first up in federal court in Portland in 1999-2000. By refusing to take a position, Feld explained, “they slept on their right” to say something. The FCC did not vote on a definition until March ’02. Waiting, Feld said, opened the door for others to create a definition first. The FCC may ask for a full en banc hearing with the Appeals Court before it goes back to review its decision. But Feld thinks it’s not likely the court would hold a full hearing. Meanwhile, the FCC could undertake the complicated process to “forebear compliance” with the rule, and not enforce the open access mandate.