Washington-A federal court, ruling on a pole-attachment case, has apparently dramatically reshaped the legal landscape for the cable industry in its relations with pole owners and local governments.
The decision-handed down April 11 by a panel of the U.S. Court of Appeals for the 11th Circuit-has potentially serious consequences for the rollout of cable Internet services, as well.
In the case, the three-judge panel declared that cable provision of Internet access was neither a cable service nor a telecommunications service, but rather, an information service, overturning cable's and local governments' long belief that Internet-over-cable is a cable service.
Based on that finding, the court said, the Federal Communications Commission could not set the rates that utilities charge cable operators to use poles for the provision of Internet access.
Because cable wires carry both video programming and Internet services, the cable industry will likely have to pay whatever price pole owners demand.
"Anybody who did Internet would be frozen out of the pole-attachment law. It would be an absurd result for cable to lose its attachment rights because it provides Internet service," National Cable Television Association senior vice president of law and regulatory policy Daniel Brenner said.
The case-brought by 18 power companies in a constitutional challenge of pole - attachment provisions in the Telecommunications Act of 1996-also involved the extent to which cable operators and wireless phone carriers could attach their facilities to poles at FCC-set rates. The court limited cable's access for cable services and banned it outright for wireless firms.
"It means that huge sections of plant out there-probably better than 50 percent of the passings-are no longer subject to the jurisdiction of the FCC under the [ruling]," said Paul Glist, a Washington, D.C., cable attorney with Cole, Raywid & Braverman. "One photon of the Internet should not divest the cable system from the price guidelines of the [law]."
The 1996 Act said FCC rates cover "any" cable attachment. But the court said the law also mandates that cable's facilities must be used "solely" for cable services.
In the 1996 law, cable lobbyists got Congress to change the definition of cable service to include the words "or use," to reflect two-way communications and, likely, the Internet. But the court said it would not accept that the mere addition of the words "or use" expanded the meaning of "cable service" to include Internet access.
The court added that a slight change in the law could not form the basis for construing its meaning broadly. "Without any substantive comment [by Congress], we will not read this minor change to effectuate a major statutory shift," the court said.
The court's decision that cable Internet service is not a cable service has troubling implications for local governments, which have the authority to regulate cable insofar as cable is offering cable services.
Local franchising authorities, for example, might be denied the power to collect franchise fees on cable Internet-access revenue. And they might not be able to require cable operators to open their facilities to competing ISPs.
Portland, Ore., and Broward County, Fla., passed open-access ordinances predicated on cable Internet access being a cable service.
"Broward County cannot proceed under its LFA authority to regulate something that is not cable," Brenner said. "They don't have the power to regulate information services. They are limited to franchising cable."
The court's ruling applies only within the 11th Circuit states of Florida, Georgia and Alabama.
William Malone, an attorney with Miller & Van Eaton in Washington, D.C., who has represented cities in litigation against the FCC and the cable industry, said the ruling will add to the confusion surrounding the regulation of cable Internet access.
"I think the decision will be used by both sides to question whether Internet-access service is a telecommunications service or a cable service," Malone said.
Leading-MSO owner AT & T Corp. found a bright spot to the ruling. In a letter to the U.S Court of Appeals for the Ninth Circuit-which could soon rule on the Portland case-AT & T said the pole case supported its view that Portland's ordinance violates law in requiring AT & T to provide telecommunications services to third-party Internet-service providers.
AT & T said federal law defines "information services"-which the 11th Circuit held cable Internet access to be-as making information available "via telecommunications."
