Cable Industry Wins In Supreme Court

    June 27, 2005
    WebProNews Staff

The high court upholds a FCC ruling, saying that cable companies do not have to share infrastructure with rivals.

The Supreme Court says that cable companies do not have to be compelled to open their networks to other high-speed Internet providers. The decision in the so-called Brand X case went 6-3 in favor of the cable companies.

A majority opinion decided that cable companies are an information service, and should not be subject to federal regulations in the same manner as telecommunication services. The court’s ruling comes in spite of major cable players like Insight offering telephone service bundled with their cable and broadband access packages.

Currently, the FCC has a similar decision to make about companies that provide DSL services. Being classified as a telecommunications service means having to negotiate numerous federal regulations. But information services don’t have to deal with those issues.

Some economists feel today’s decision will provide cable companies with the motivation to expand their infrastructure. But that opinion seems counter-intuitive. Cable companies have been granted a monopoly in providing broadband, and very few communities have a choice of cable providers.

“It removes the regulatory uncertainty for all of us who want to offer high-speed Internet access. It gives us every incentive now to continue investing and continue innovating,” said Kyle McSlarrow, president of the National Cable & Telecommunications Association, the main industry lobbying group.

Companies like Verizon and SBC see the issue the same way. It is likely those firms will work via the FCC and Congressional lobbyists in an effort to bring about a similar decision regarding DSL services.

David Utter is a staff writer for WebProNews covering technology and business. Email him here.