Copyright 2002 Warren Publishing, Inc.

Communications Daily…04/02/2002

From LexisNexis

The Ninth U.S. Appeals Court, San Francisco, won a lottery Monday to hear a federal challenge to the Federal Communications Commission's declaratory ruling that cable modem service is interstate "information service."

Several challenges were filed, including one by a coalition of consumer groups led by public interest law firm Media Access Project (MAP), as well as separate suits filed by EarthLink, Brand X Internet and Verizon Communications.

Of four plaintiffs, only Brand X Internet filed in the Ninth Circuit, with the others filing in the U.S. Court of Appeals in Washington, D.C. Nevertheless, the Ninth Circuit won the lottery, said a spokeswoman for the judicial panel on multidistrict litigation. Now, all cases filed against the FCC on the issue will be combined and heard by the Ninth Circuit. Other entities that want to file lawsuits against the FCC in the case must do so within the next 60 days.

The development is particularly noteworthy because the Ninth Circuit has ruled previously on the issue, deciding that cable modem service was partly telecom service and partly an information service. In that case, the city of Portland, Ore., tried to force AT&T Broadband to carry competing Internet service providers (ISPs) on its pipes. At that time, the court expressed some frustration that the FCC hadn't already decided the question but said that, absent any ruling by an agency with jurisdiction, it found it was not cable service. But the court also said Portland couldn't force "open access" upon AT&T Broadband.

This time around, the court will face the issue with an FCC decision in place — and one that's different from its own. The FCC said Internet delivered via cable was only an "information service" and that it wasn't subject to common carrier regulations that would require unbundling, or "open access." That decision will have to be squared with the Ninth Circuit's.

The FCC, in its decision, also issued a Notice of Proposed Rulemaking (NPRM) to examine which government agencies, if any, had the power to regulate cable modem service and invited comment on whether, "in light of marketplace developments, it is necessary or appropriate at this time" to require multiple ISP access.

An FCC spokeswoman declined to say whether the Ninth Circuit was seen by the agency as a friendly venue. Cable industry sources expressed satisfaction with the venue, saying they believed the court ultimately would defer to the FCC on the issue.

However, MAP President Andrew Schwartzman also said he was pleased, saying MAP's attorneys had debated whether to file in the Ninth or Washington, D.C., circuits.

"It's fine with us," Schwartzman said. Ultimately, MAP decided on the D.C. Circuit because it "has not been overly sympathetic to the FCC's judgment in recent times" and MAP was hoping a possible ruling conflicting with the Ninth Circuit that would have prompted a Supreme Court review.

However, the Ninth Circuit also is friendly to the consumer groups' cause, Schwartzman said, because it already has made up its mind on cable modem service and is likely to defend its previous conclusions. No dates have been set in the case.