Ruling a big win for cable firms
They don't have to let rivals use Internet networks
The US Supreme Court yesterday said that cable TV companies that offer broadband Internet service don't have to open up their networks for use by competing Internet service providers.
The 6-3 ruling is a major victory for cable companies, which have invested billions in broadband infrastructure, in competition with the major telephone companies.
But it could mean hard times for stand-alone Internet service providers that provide service via dial-up telephone lines. Although millions of Americans are switching to broadband, many dial-up Internet providers can't afford to build their own high-speed data networks. They had hoped for a ruling that would have forced broadband operators to share their bandwidth with competitors.
The case challenged a ruling of the Federal Communications Commission, which had decided cable TV companies that offer Internet services are to be regulated as information providers, rather than as telecommunications companies. Under FCC regulations, telecommunications companies are ''common carriers" that can be ordered to provide competitors with nondiscriminatory access to their networks. Information providers aren't subject to such a requirement.
Brand X Internet Services, a small Santa Monica, Calif., company with 500 subscribers, objected to the FCC policy. Its president, Jim Pickrell, said the FCC's exemption of cable Internet service was a misinterpretation of its authority under the Federal Communications Act of 1934.
The US Ninth Circuit Court of Appeals agreed with Brand X; the FCC then appealed to the Supreme Court.
Yesterday, Associate Justice Clarence Thomas, writing for the majority, said the FCC's policy was a legitimate application of its authority. ''Nothing in the Communications Act . . . makes unlawful the Commission's use of its expert policy judgment to resolve these difficult questions," Thomas wrote.
In a dissent, Associate Justice Antonin Scalia said the FCC had engaged in ''an implausible reading of the statute, and has thus exceeded the authority given it by Congress." He said the FCC had authority to treat cable providers as telecommunications companies, as telecommunications service was plainly involved in their delivery of Internet access.
Associate justices Ruth Bader Ginsburg and David Souter joined in Scalia's dissent.
The ruling came as bad news for Brand X. ''That puts us and every other Internet service in an absolutely terrible situation," Pickrell said. ''I think you're going to see a wave of the remaining Internet services closing . . . if we cannot get access, then essentially we're out of business."
Kyle McSlarrow, president of the National Cable & Telecommunications Association, said the ruling will encourage cable companies to continue upgrading their broadband networks.
''Classifying cable modem service as an interstate information service, as the FCC did, keeps this innovative service on the right deregulatory path," he said.
Hiawatha Bray can be reached at bray@globe.com. 
