Bush to Big Cable: We Love You Time Warner, Comcast, Cox!

A Pre-GOP Convention Gift to Media Monopoly for Broadband

 

August 30, 2004

The Department of Justice last Friday asked the U.S. Supreme Court to reverse a lower court decision that affirmed the broadband Internet’s obligation to serve as a nondiscriminatory medium. The DOJ thus joined both the FCC and the cable industry, which also want to see a reversal of what is called the "Brand X" case (for the Santa Monica-based Internet service provider of that name).  A federal Court of Appeals (Ninth Circuit) found last year that the Michael Powell FCC erred when it declared that the cable industry could, in essence, operate closed broadband networks.  Fighting that decision in court were ISPs Brand X and Earthlink, along with Consumer Federation of American, Consumers Union, Media Access Project (as our counsel), and CDD.

The Brand X case is vitally important to the future of the Internet as a democratic medium.  As the Bush DOJ told the Supreme Court: “This case is likely to determine the regulatory classification under the Communications Act that will apply to broadband (i.e., “high-speed”) Internet access services in the United States.”  In essence, the federal government has come to the aid of its embattled great deregulator, FCC chairman Michael Powell.  In May 2002, Powell, as part of his agency’s “leave no media monopoly behind” policy, approved rules that permitted cable companies to extend their monopoly in multichannel television to the broadband market.  Broadband provided by cable would not have to retain the characteristics of the dial-up Internet under his new policy, which meant that cable companies could deny access to their network by all other ISPs (forcing cable broadband subscribers to use the cable operator's monopoly ISP provider).  In addition, by eliminating nondiscrimination safeguards for broadband service, Powell made it much easier for cable companies to manipulate their Internet platforms to further benefit commercial media content.

The DOJ cited sections of the non-regulatory 1996 Telecommunications Act as its basic rationale for supporting the Powell plan.  It’s more important to speed the availability of broadband access to the public by eliminating rules and safeguards, claim the FCC and DOJ.  That such a stripped-down and conglomerated Internet might not be what the public wants--and especially needs--was not part of the Bush Administration formula.

Under Powell, broadband cable (and also, for the most part, broadband delivered by DSL) is now classified as an “Information Service,” a deregulatory black hole in which narrow private interests get to determine what rules, if any, are applied to high-speed service.  

Compare this with the Telecommunications Service classification, which still governs the dial-up Net.  Under this framework, supported by Brand X and the public interest community, broadband providers must “charge just, reasonable, and nondiscriminatory rates”; ensure interconnection with ISPs; and support universal service goals related to closing the digital divide and expanding educational access.  But the DOJ wants to Supreme Court to overturn the 9th Circuit and affirm the Powell FCC's policy on cable broadband.

The cable lobby, which includes some of the biggest media companies in the country, has supported the intervention of the Administration.  With cable as the country’s leading broadband provider (17 million homes), the industry has found tremendous profits in providing the service.  But cable’s broadband plans for the future depend on deepening their control of Internet traffic and offering new services such as Voice over Internet.  To generate the revenues they desire, cable wants to remain free of any public policy requirement mandating openness and competition.  The Bush Administration has now sent a cable lobby love letter to the Supreme Court.  Stay tuned.