Monday, June 27, 2005
LINKS: To stories about the Brand X decision
EXCELLENT Q&A BACKGROUNDER AT:
Tim Wu, a University of Virginia law professor, called the decision a
"mixed bag for consumers." He says it could increase the temptation by
cable and telephone providers to limit access to certain applications. He
cited past efforts by cable companies to restrict customers' use of Wi-Fi
devices and said new federal consumer-protection regulations are needed.
"The court's decision increases the pressure and the need for
congressional network neutrality rules -- rules designed to ensure that
consumers can reach any Internet content they want and use any application
they want and attach any device they want," Prof. Wu says.
One area at risk: Internet calling, or VOIP, an increasingly common
application that has the potential to take phone customers way from cable
and phone companies. Earlier this year Internet phone company Vonage
complained to the FCC that a rural phone company was blocking its
customers from using its service. A Vonage spokeswoman said yesterday that
the company isn't concerned about the Supreme Court decision. But she also
contends that there needs to be some network neutrality rules.
Verizon Communications Inc. said that consumers will wind up with more
choices because of the growth of alternative technologies, like Web access
via cellular networks and power lines.
BELOW FROM ACLU WEBSITE:
The danger, the ACLU said, is that monopolistic broadband providers will
leverage their ownership of the wires that people use to get online to
exert control over subscribers' Web surfing, e-mail, Internet telephone
services and other uses of the Internet.
"The Supreme Court missed an opportunity to correct the FCC's decision on
this issue," said Hansen. "The Court's ruling was a fairly straightforward
judgment that the judiciary's tradition of deference to the executive's
power to interpret the law exceeded any misjudgment on the part of the
FCC. That judgment was mistaken in our view and the FCC seems to be moving
in the wrong direction on this issue."
"No one should think that the free Internet that we currently enjoy is
somehow immune from change or guaranteed to stay free," said Hansen.
"These two decisions may make it harder in some ways to preserve that free
Internet, but they also insure that the battle will rage on."
An ACLU-commissioned technical report on cable broadband and a white paper
on the open access issue are available online at www.aclu.org/broadband.
The Consumer Federation of America, along with the American Civil
Liberties Union, the Center for Digital Democracy (CDD) and a host of
other public advocacy organizations, supported Brand X in its legal battle
with the FCC.
The groups fear broadband competition in the United States will be reduced
to a duopoly between cable modems and DSL.
"Open communications networks have been at the core of the American
economy for centuries. Nondiscriminatory access to transportation and
communications networks has always been essential to a thriving economy,
whether it was railroads, the telegraph or telecommunications," the CDD's
Jeff Chester said in March. "In the digital age when communications and
commerce converge, open communications networks are even more important."
Chester added, "The open environment of the Internet was the source of
dynamic innovation in the digital economy in the 1990s when
nondiscriminatory access to telecommunications network was guaranteed."
Broadband services reach approximately half of all Internet subscribers.
Cable broadband providers and incumbent carriers offering DSL dominate the
According to the FCC, there are 32.5 broadband connections in the United
States with cable leading the pack with 18.6 million subscribers. DSL
accounts for 11.4 million connections.
EarthLink Statement Addressing Supreme Court Decision in the 'Brand X'
Monday June 27, 12:36 pm ET
ATLANTA, June 27 /PRNewswire-FirstCall/ -- The following statement is
attributable to Dave Baker, vice president, law and public policy,
EarthLink (Nasdaq: ELNK - News).
"Today's Supreme Court ruling is a blow to consumers and competition. For
too long, cable companies and the FCC have denied consumers a choice of
broadband providers over cable. Besides keeping prices high, this lack of
choice limits the future deployment of innovative voice, video and data
services beyond just those offered by the local cable company.
"EarthLink will continue to serve broadband customers across the country
with high-quality data and voice services and an innovative suite of
protection tools. We will also work with Congress as it revisits the
Telecommunications Act in order to ensure customer choice and the future
deployment of advanced communications services and applications."
In a 6-to-3 decision, the court said the law on the matter was ambiguous
and that the Federal Communications Commission, not the courts, had the
authority to interpret it.
"If a statute is ambiguous, and if the implementing agency's construction
is reasonable, Chevron requires a federal court to accept the agency's
construction of the statute, even if the agency's reading differs from
what the court believes is the best statutory interpretation," Justice
Clarence Thomas wrote for the majority.
In a dissent, Justice Antonin Scalia, wrote that the commission's ruling
was trying to further a free-market agenda, through "an implausible
reading of the statute, and has thus exceeded the authority given it by
Justice Scalia rejected the commission's argument that cable Internet
service combines Internet access, which is communication, with additional
services, like e-mail message ability, and therefore is an information
In the decision yesterday, Justice Thomas wrote that the commission had
the right to change those rules, but the court said it had no opinion on
whether it should do so.
BELOW FROM COALITION OF MUNICIPAL GROUPS WHICH SUPPORTED BRAND X
Local Government Prepared to Protect Consumers Following Brand X Decision
6/27/2005 2:33:00 PM
Contact: Elena Temple of the United States Conference of Mayors,
202-861-6719 (additional contacts listed below)
WASHINGTON, June 27 /U.S. Newswire/ -- Five national organizations have
expressed disappointment in the wake of the Supreme Court's ruling in the
Brand X case in which the Court sustained the Federal Communications
Commission's (FCC) regulatory classification of cable modem service as an
'information service' with no cable or telecommunications component. The
United States Conference of Mayors, the National League of Cities, the
National Association of Counties, The National Association of
Telecommunications Officers, and the International Municipal Lawyers
Association formed the Alliance of Local Organizations Against Preemption
(ALOAP) to pursue legal and regulatory actions as a result of the FCC's
ruling that Internet connectivity provided by cable operators through a
cable modem is not a "cable service."
The members of ALOAP represent local governments throughout the country
who are responsible for ensuring that cable operators and others using
public property to deliver private services do so in a manner that
protects consumers, and that the public's property is well-managed. While
these protections had traditionally been accomplished through the cable
franchise agreement, as a result of the Court's decision, the Internet
services provided by cable operators are not addressed within the scope of
The Court's decision to uphold the FCC's view of 'information services'
shifts the burden to the nation's local governments to ensure consumers
are protected from unscrupulous and unsafe conduct by carriers. We are
prepared to use our ownership and management of public rights-of-way, as
well as our general police powers to protect our constituents. The Court's
decision jeopardizes the nation's public safety as information services
are not subject to law enforcement (CALEA) and 911 requirements. The
decision also hurts consumers as it denies them the legally protected
right to choose unaffiliated Internet service providers (ISP). In making
the finding of pure information services, the Court's ruling has the
effect of classifying the broadband connection to most residences as an
unregulated, closed proprietary network with no obligation to interconnect
or to carry unaffiliated VoIP and ISPs. Worse yet, these proprietary
networks have no legal obligation to be accessible to the disabled.
The classification of this service as an information service will usher in
a significant period of market uncertainty. We look forward to meeting
quickly with the industry so that at least at the local level, these
issues are resolved appropriately, in a way that balances the rights and
interests of the operators with that of the local community and
ALOAP participated in proceedings before the FCC, was a party before the
United States Court of Appeal for the Ninth Circuit and cross-petitioned
for review of the Ninth Circuit decision by the Supreme Court.
The United States Conference of Mayors - Elena Temple 202-861- 6719
National League of Cities - Marilyn Mohrman-Gillis 202-626- 3023
National Association of Counties - Jeremy Ratner 202-942-4220
International Municipal Lawyers Association - Henry Underhill 202-466-5424
National Association of Telecommunications Officers and Advisors - Libby
/© 2005 U.S. Newswire 202-347-2770/
"The Federal Communications Commission ... has once again attempted to
concoct 'a whole new regime of regulation (or of free-market competition)'
under the guise of statutory construction," wrote Justice Antonin Scalia
for the minority.
"Today's ruling is bad news for millions of Americans who are overpaying
billions of dollars every year in cable Internet service," Mehrdad Saberi,
chairman of the California ISP Association, said in a written statement.
The group says it has more than 100 independent members representing more
than three million California consumers and businesses. "The interests of
American consumers and businesses have been sold out as the FCC and now
the court have defined Internet service in such a narrow way that allows
cable companies to escape proper regulation. ... Now that source of
Internet innovation, consumer choice and affordability is threatened with
extinction as cable companies block the benefits of competition."
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