X Marks the Spot...Supreme Court Poised to Define the Future of the Internet


Even the opponents in the case of FCC v. Brand X Internet Services, now under review at the Supreme Court, agree on one thing:  "This battle is over the future of the Internet," as FCC Commissioner Michael Copps expressed it.  At stake is whether the broadband Internet will preserve the dial-up Internet's longstanding open, diverse traditions, or whether it will evolve into something much closer to the closed platform of multichannel video.

The Brand X case, so named for the Santa Monica-based Internet service provider (ISP) that was denied access to cable's high-speed data lines, made its way to the Supreme Court following the Ninth Circuit Court of Appeals October 2003 decision to overturn the FCC's classification of cable modems as an unregulated information service.  Thus the case will finally determine, as the Bush Department of Justice told the Supreme Court in its appeal of the lower court's decision, "… the regulatory classification under the Communications Act that will apply to broadband (i.e., “high-speed”) Internet access services in the United States.”  At present, such service reaches over half of all Internet subscribers, and cable broadband service leads the pack among high-speed Internet providers, reaching more than 19 million US homes.

Traditionally, dial-up Internet access has been classified as a telecommunications service, under which network operators must “charge just, reasonable, and nondiscriminatory rates”; ensure interconnection with independent ISPs; and support universal service goals related to closing the digital divide and expanding educational access.

The cable service classification, in contrast, comes with no such nondiscriminatory guarantees--although cable operators are obliged to pay a 5 percent franchise fee to the communities in which they enjoy their near-monopoly status.  Such revenues, amounting to billions of dollars annually, support a variety of municipal activities, including the public, educational, and governmental access channels that add a measure of community participation to an otherwise corporate-dominated TV landscape.

The FCC in March 2002 opted for an alternative to both the telecommunications and cable service standards, declaring that cable modems fall under an interstate information service category--a deregulatory black hole in which narrow private interests get to determine what rules, if any, are applied to high-speed service.  Thanks to the FCC's decision, neither franchise fees nor ISP access requirements stand in the way of monopoly broadband profits. 

The FCC's ruling was especially galling to cash-strapped cities, which were forced to forgo some $470 million annually in potential cable modem franchise fees.  The cities, unfortunately, were equally opposed to the Ninth Circuit's decision, since that ruling, which defined cable Internet access as a telecommunications service, also placed cable modems beyond the reach of franchise fees.  The Supreme Court, in accepting the FCC/DOJ appeal, denied the National League of Cities/US Conference of Mayors petition for reconsideration of the Ninth Circuit Court's Open Access decision.

Even in defeat, however, the cities' representatives successfully captured the essence of the case that is now before the high court, warning of the "absolute control" that the cable industry currently wields over the vital last-mile broadband connections to the home:  "That cable operators have, so far at least, voluntarily chosen not to exploit that control more fully by blocking some Internet content--or, more accurately, that operators have made the editorial decision that, at this time, it is in their marketplace (or strategic regulatory) interest to provide unfiltered Internet access content—does not, and cannot, alter the fact they possess such control.”

FCC Chairman Michael Powell, meanwhile, more concerned with broadband deployment than with broadband democracy, is looking forward to the final resolution of the Brand X case. "High-speed Internet connections are not telephones," Powell declared, "and I'm glad the Supreme Court has agreed to review the 9th Circuit’s ruling that they are. The 9th Circuit's decision would have grave consequences for the future and availability of high-speed Internet connections in this country. As the Commission is uniquely charged with the task of promoting the deployment of such advanced services to the public, we look forward to our opportunity to present our case before the high court."

Representatives of the public interest, finally (including the Consumer Federation of America, Consumers Union, and the Media Access Project, which is serving as CDD's counsel in the Brand X case), offer an important reminder--that high-speed Internet connections alone will mean little if the Internet itself is transformed into a closed system.  "Open communications networks," the consumer groups point out, "have been at the core of the American economy for centuries.  Nondiscriminatory access to transportation and communications networks has always been essential to a thriving economy, whether it was railroads, the telegraph or telecommunications.  In the digital age when communications and commerce converge, open communications networks are even more important.  The open environment of the Internet was the source of dynamic innovation in the digital economy in the 1990s, when nondiscriminatory access to telecommunications network was guaranteed."

What these opposing viewpoints really illustrate is the urgent need for the U.S. to develop a comprehensive new policy for broadband (covering cable, DSL, and wireless).  We must combine the best aspects of two, now-separate approaches.  First, broadband networks must be required to serve their community, through some form of local agreement (for "community bandwidth," public telecommunications services, etc.).  Second, they must also be required to also operate in an open and nondiscriminatory manner, reflecting the heritage of the Internet itself.

The Brand X case, then, is nothing less than a battle for the soul of the Internet--and for the public's First Amendment rights in the broadband era. While the cable industry is intent on transforming the Internet into an extension of its tightly controlled cable business, it is critical that we maintain an open, nondiscriminatory platform for the exchange of ideas and information. The Internet must not become the preserve of any one media or telecom industry. Rather, it should reflect the highest aspirations of our democracy: the free flow of information, unimpeded access to all manner of content, and dissemination of the broadest diversity of viewpoints.

The government's brief in the Brand X case is due on 21 January 2005, with the MAP/CDD brief following on 22 February and oral arguments on 29 March.  The court's decision itself could come as early as June.


Alliance of Local Organization Against Preemption: The National League of Cities, United States Conference of Mayors, National Association of Counties, International Municipal Lawyers Association, and the National Association of Telecommunications Officers and Advisors (NATOA) collaborated to form the Alliance of Local Organization Against Preemption (ALOAP) in response to the FCC's classification of cable modem service that prohibited municipalities from collecting franchise fees on such service.  The ALOAP page on NATOA's website offers a comprehensive list of documents pertaining to the Brand X case.

Media Access Project Statement on Supreme Court Order Granting Certiorari in Brand X v. FCC (PDF)

Statement of Consumers Union and the Consumer Federation of America on the Supreme Court’s Decision to Grant Cert in the Brand X Case

EarthLink Statement on Supreme Court Decision on FCC Brand X Appeal

ACLU's brief on the Brand X case (PDF)

MAP Press Release: Ninth Circuit Court Rules in Favor of Open Access, Against FCC Decision (PDF)

The Ninth Circuit's Brand X Decision (PDF)

The National League of Cities, the U.S. Conference of Mayors, and the National Association of Counties, et al, Petition to the Supreme Court Requesting a Review of the Brand X Decision (PDF)

FCC and Department of Justice petition Supreme Court to overturn Brand X decision on Open Access (PDF)

Cable industry petitions Supreme Court to overturn Brand X decision on Open Access (PDF)

Verizon brief in support of certiorari petition to Supreme Court (PDF)

SBC, BellSouth brief in support of review from Supreme Court (PDF)

EarthLink brief in opposition to certiorari by Supreme Court (PDF)

"Supreme Court Grants Certiorari in Brand X Case," Tech Law Journal, 3 Dec. 2004

Annalee Newitz, "Brand X," AlterNet, 29 Dec. 2004.

James Grimmelmann, "What's at Stake in Brand X," LawMeme, 17 Dec. 2004

Karl Bode, "Brand X Battle," Broadband Reports.com

"Rep. Pickering Suggests Relationship Between the DOJ's Brand X Cert Petition and the FCC's CALEA NPRM," Tech Law Journal, 8 Sept. 2004

"Office of the Solicitor General Backs FCC in Brand X Case," Tech Law Journal, 1 Sept. 2004.

Josh Long, "Court Decision Stymies FCC Broadband Policy," Phone+, 7 Oct. 2003

ACLU, "No Competition: How Monopoly Control of the Broadband Internet Threatens Free Speech," July 2002

Columbia Telecommunications Corporation, “Technological Analysis of Open Access and Cable Television Systems,” December 2001