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Court Rejects Review of Cable Broadband Ruling

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WASHINGTON (Reuters) – A U.S. appeals court has refused to reconsider its decision that regulators mistakenly insulated cable companies that offer high-speed Internet from extensive regulations, like providing consumers a choice of Internet service providers.
A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit ruled in October that the Federal Communications Commission should have classified cable broadband as a telecommunications service instead of an information service.
If the FCC labeled cable broadband as a telecommunications service, cable companies would likely have to offer consumers the ability to have a rival Internet service provider unless the FCC affirmatively decided otherwise.
But the FCC decided in March 2002 that high-speed Internet service from cable companies was an information service, and therefore not immediately subject to access requirements.
The court late on Wednesday denied requests to rehear the case. The FCC said is considering its options which could include an appeal to the U.S. Supreme Court.
The decision could lead Internet service providers to demand that cable operators that do not already offer customers a choice of providers do so.
It could also hobble the Bush administration’s recently announced goal to roll out affordable, universal access to broadband by 2007.
The decision “prolongs uncertainty to the detriment of consumers,” FCC Chairman Michael Powell said in a statement. “That is why we will study our options and explore how to continue to advance broadband deployment for all Americans.”
The FCC has asked for comment on whether it should require cable companies to give consumers a choice of Internet service providers. Some cable companies already do provide consumers some choices of ISPs.
But the agency has not yet acted on that issue in part because of the legal uncertainty surrounding it.
The court’s decision likely further delays the roll-out of high-speed Internet service and could hobble efforts to deregulate broadband offered by the dominant local telephone companies, known as the Bells, according to one analyst.
“I think the concern is that it might slow it down because there might be concern that the cable companies may have to make their networks available to other services,” said Legg Mason analyst Rebecca Arbogast. “It also likely slows down the deregulation the Bells had hoped for.”
Internet service providers like EarthLink Inc. hailed the decision while cable operators vowed to appeal.
“Cable modem users deserve choice in high-speed Internet providers,” said Dave Baker, EarthLink’s vice president of law and public policy. Yesterday’s ruling is another step toward finally affording them that choice.”
The National Cable and Telecommunications Association, which represents major cable operators like Time Warner Inc. and Comcast Corp., said it would appeal the court decision.