June 27, 2005

Court Overturns Ruling on Cable Internet Lines

WASHINGTON (Reuters) -- The U.S. Supreme Court on Monday overturned a ruling that cable high-speed Internet lines must be opened to rival online service providers, handing a victory to the Federal Communications Commission.

By a 6-3 vote, the justices overturned a U.S. appeals court ruling that cable high-speed Internet service, known as broadband, has a telecommunications component and is subject to traditional telephone network access requirements.

The appeals court overturned an FCC decision in 2002 that cable broadband was an information service and therefore free from most traditional telephone service rules, like requirements to lease network access to rivals.

At the time, FCC officials said the move was necessary to spur more investment in high-speed Internet services. Cable companies have invested billions of dollars in upgrading their networks and are aggressively pushing those services.

Telephone companies, which also offer Internet services, have long complained that the FCC rules put them at a competitive disadvantage because they have to lease some of their high-speed Internet lines to rivals.

In appealing to the Supreme Court, the government and cable companies argued the appeals court did not extend the required deference to the agency's expertise and decision-making process. Internet service providers opposed the appeal.

Justice Clarence Thomas agreed in the majority opinion that the appeals court had erred.

He said the FCC's conclusion that broadband cable modem companies are exempt from mandatory common-carrier regulation is a lawful construction of the Communications Act.

Justices Antonin Scalia, David Souter and Ruth Bader Ginsburg dissented.

The cable industry has about 21 million high-speed Internet access subscribers. Independent Internet service providers like EarthLink Inc. and public interest groups have worried that, without some safeguards by the FCC, consumers would have limited choices for providers or Web-surfing capabilities.