HIGH COURT'S CABLE DECISION STOKES CLASSIFICATION DEBATE

Regulatory impact may go beyond pole-attachment question

By allowing the FCC to control the rates utility companies charge cable operators to access their poles, the U.S. Supreme Court created more questions than answers about cable companies' status as service providers.

In a 6-2 vote, the high court overturned an 11th Circuit Court decision that defined high-speed data Internet services as “non-cable,” placing them outside the FCC's jurisdiction when setting pole rates.

“The addition of high-speed Internet service on the cable does not change the character of the entity [as a cable TV service],” Justice Anthony Kennedy wrote in the majority opinion.

Cable backers say this frees cable's high-speed Internet services from the “telecommunications” label and common carrier status that come with significantly more regulation. Others disagree.

“The court has said that it's up to the FCC to determine what cable is and what responsibilities it has,” said Patrick Brogan, analyst for The Precursor Group. “It touches on the issue of telecommunications and common carrier obligations, whether and how any of those types of obligations would apply.”

The court should have forced the FCC to classify cable, argued dissenting Justices Clarence Thomas and David Souter. Thomas noted, “The FCC has not conclusively determined that high-speed Internet access using cable modem technology is not a telecommunications service.”

Andrew J. Schwartzman, president and CEO of industry watchdog group Media Access Project, said the ruling “continues the uncertainty that will be exploited by the cable companies.” Cable supporters will argue the decision means cable Internet is not a telecom service, but “you cannot have an information service that is not also a telecommunications service,” Schwartzman said.

The FCC likely will decide the issue when it determines cable's responsibilities in providing open access to multiple Internet carriers, said Keith Kennebeck, analyst for The Strategis Group. “So far, it looks like [cable Internet] will be classified as an information service,” Kennebeck said. “A lot of people are speculating that they won't get the full cable service classification” — a classification that is largely unregulated.

The National Cable and Telecommunications Association viewed the ruling as a double win as it relieved the threat of costly access to utility poles. “The specter of cable modem regulation is all but gone,” a spokesman said.

That's an unduly optimistic viewpoint. The 11th Circuit Court seeks to determine just compensation price for attachments, said J. Russ Campbell, attorney for Balch and Bingham, who represents Gulf Power, which filed the case that went to the Supreme Court.

“Our case says they have to set just compensation for cable attachments,” he said. “The two [jurisdiction and fees] just aren't related.”

Also, while cable might wiggle free from regulation, it might encounter some unbridled competition along the way.

Kennedy “notes that the FCC has power to reconsider prior decisions,” Brogan said. “From the FCC's standpoint, why not reverse some of its prior decisions about what DSL has to resell?”