Supreme Court Grants Certiorari in Brand X Case

December 3, 2004. The Supreme Court issued an order [1 page in PDF] in which it granted petitions for writ of certiorari in NCTA v. Brand X Internet Services, No. 04-277, and FCC v. Brand X Internet Services, No. 04-281. The Court also consolidated the two cases. This decision to hear the case is a victory for Federal Communications Commission (FCC) Chairman Michael Powell, and the majority on the FCC.

Michael PowellPowell (at right) stated in a release [PDF] that "High-speed Internet connections are not telephones, 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."

Treating broadband internet access providers, including cable modem service, as an information service is a critical part of Powell's strategy for promoting broadband deployment, competition, innovation, and the digital migration. He is supported in this by Republican Commissioners Kevin Martin and Kathleen Abernathy. If cable modem service were a telecommunications service, then it would be subject to the economic regulatory regime that applies to telecommunications services.

On March 14, 2002, the FCC adopted a Declaratory Ruling and Notice of Proposed Rulemaking [75 pages in PDF]. The Declaratory Ruling (DR) component of this item states that "we conclude that cable modem service, as it is currently offered, is properly classified as an interstate information service, not as a cable service, and that there is no separate offering of telecommunications service." This item is FCC 02-77 in Docket No. 00-185 and Docket No. 02-52.

On October 6, 2003, a three judge panel of the U.S. Court of Appeals (9thCir) issued its opinion [39 pages in PDF] (which is also published at 345 F.3d 1120) vacating the FCC's declaratory ruling. See, story titled "9th Circuit Vacates FCC Declaratory Ruling That Cable Modem Service is an Information Service Without a Separate Offering of a Telecommunications Service" in TLJ Daily E-Mail Alert No. 754, October 7, 2003; and story titled "Reaction to 9th Circuit Opinion in Brand X Internet Services v. FCC" in TLJ Daily E-Mail Alert No. 756, October 9, 2003.

The FCC obtained the critical support of  the Department of Justice's (DOJ) Office of the Solicitor General (OSG). The Supreme Court Justices place great weight on the recommendation of the OSG when deciding whether or not to grant certiorari petitions. On September 1, 2004, the DOJ's OSG and the FCC filed a Petition for Writ of Certiorari [37 pages in PDF] with the Supreme Court. See, story titled "Office of the Solicitor General Backs FCC in Brand X Case" in TLJ Daily E-Mail Alert No. 968, September 2, 2004.

On the other hand, Powell may have paid a price for obtaining the backing of the DOJ's OSG. That is, the DOJ may have leveraged its power in the Supreme Court certiorari process to obtain from the FCC the NPRM pertaining to CALEA. In this arrangement, the DOJ got the CALEA interpretation and rule making proceeding that it wanted, while the FCC majority got the petition for writ of certiorari in the Brand X case that it wanted.

On August 9, 2004 the Federal Communications Commission (FCC) released a Notice of Proposed Rulemaking and Declaratory Ruling (NPRM & DR) [100 pages in PDF] regarding imposing Communications Assistance for Law Enforcement Act (CALEA) obligations upon broadband internet access services and voice over internet protocol (VOIP) services. See, story titled "Summary of the FCC's CALEA NPRM" in TLJ Daily E-Mail Alert No. 960, August 17, 2004.

See also, story titled "Rep. Pickering Suggests Relationship Between the DOJ's Brand X Cert Petition and the FCC's CALEA NPRM" and story titled "House Subcommittee Holds Hearing on CALEA and the Internet" in TLJ Daily E-Mail Alert No. 974, September 10, 2004.

If the DOJ gets what it seeks in the CALEA proceeding, this could undermine Powell's strategy for promoting broadband deployment, competition, innovation, and the digital migration.

National Cable & Telecommunications Association (NCTA) P/CEO Robert Sachs praised the Supreme Court's decision to take the case. He wrote in a release that "We are pleased by the Supreme Court's decision to review this significant case and are optimistic that the Court will affirm the FCC's decision that cable modem service is an interstate information service, fostering a deregulatory environment for cable high-speed Internet access. Establishing a deregulatory environment for cable modem service is critical to the universal deployment in the U.S. of broadband services, including emerging services such as Voice over Internet Protocol service."