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Cable firms not impelled to share lines

Vote is 6-3 in ‘Brand X’

WASHINGTON — In a victory for the cable industry, the Supreme Court on Monday said cable companies don’t have to share their lines with rival providers of high-speed Internet service.

The 6-3 decision in the so-called “Brand X” case upholds a Federal Communications Commission ruling that the cable companies were exempt from the same regulations requiring phone companies to offer access to independent providers. At the time, the FCC said it wanted to encourage cable companies to build their networks to offer broadband services.

In an opinion by Justice Clarence Thomas, the high court said judges should defer to the expertise of the FCC, which concluded in 2002 that limited access is best for the industry.

The FCC and cable companies cheered the ruling. The cable industry said it would further investment, growth and competition in the broadband market.

But consumer advocates said it would lead to higher prices for consumers.

The court’s ruling “threatens to cement the cozy duopoly of cable modem and DSL service that has made a mockery of competition in American broadband markets and prompted hundreds of communities across the country to build their own local networks,” said three consumer groups — the Consumer Federation of America, Consumers Union and the Free Press.

At the center of the case is a Santa Monica-based company in California, Brand X Internet, with about 500 subscribers in the local area. Brand X challenged the FCC and sought access to cable’s fiber optic lines to offer broadband service.

“This is just terrible and the real losers in this decision are consumers, because consumers benefit from choice and competition,” said Brand X president Jim Pickrell. He said his company may be forced out of business.

Brand X runs its traffic over phone lines, but Pickrell may soon lose the discounted rates he gets to use those lines from the phone companies. The FCC is considering petitions to regulate broadband service offered by phone companies via digital subscriber lines, or DSL, as an information service instead of a telecommunications service. Regulation as a telecom service requires the phone companies to offer access to independent providers. Analysts say the ruling will have little immediate impact, but could affect telecom policy in the long term.

“This was a very far-reaching decision, taking the courts out of public policy decisions relating to technology,” said Dana Frix, partner in the corporate telecommunications practice at Chadbourne & Parke, who has represented phone and cable companies.

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