Supreme Court to Consider Cable Regulation

Tuesday, the United States Supreme Court will hear opening arguments in the fight to classify what constitutes an "information service," and whether cable companies and voice over IP providers deserve to be treated differently under a separate set of government regulations.

The case is the result of "Internet service provider X" challenging rules approved by the Federal Communicated Commission (FCC) that shield cable operators from paying the mandatory fees paid by traditional telecoms that operate Public Switched Telephone Networks (PSTN) and opening their networks to outside access.

The heart of the matter is whether or not cable modem services should be considered to be "information services" or telecommunications services under the Communications Act of 1934.

The Communications Act of 1934 regulated telephone lines like railroads: Carriers must allow competitors to access their wire services for a nominal fee in the same way that railroads cannot refuse competitors' trains onto their tracks. All traditional telecom carriers are considered to have a telecommunications component to their businesses, making them subject to the law.

Under the law, Regional Bell Operating Companies (RBOCs), including DSL networks, are required to share their "tracks;" however, cable companies are not, because they are defined as "information services" instead of telecommunications services.

Over the past decade, the U.S. Congress and FCC have acted in favor of cable operators to encourage the growth of broadband services, much to the chagrin of the RBOCs.

RBOCs have fought the rules vigorously in the legal system with some measurable success. A 2004 appeals ruling concluded that RBOCs are not obligated to allow wireless providers access to their networks. Likewise, in 2003, the FCC chose not to force RBOCs to lease out their high-speed lines. Although, DSL services remain unaffected and must be kept open.

What is at stake is control over the high-speed lines that have become conduits for a growing array of services ranging from voice over IP communications (VoIP) to Internet Television, as well as other burgeoning wireless and broadband technologies.

It is widely known that services like VoIP have already begun to erode the core revenues of traditional telecoms, which must share their networks with competitors and pay fees for services that pass through PSTN.

The Supreme Court must decide how to define companies that offer these services in the new ecosystem of technology providers. The full briefs (1, 2) are available for download from the Supreme Court's Web site.