WASHINGTON (AP) – The Supreme Court on Tuesday questioned the tight control cable companies hold over high-speed Internet service in a case that will determine whether the industry must open up its lines to competitors.

More than 19 million homes have cable broadband service. The case turns on whether cable Internet access is an information service as the industry and the Federal Communications Commission say, or has a separate telecommunications component, as Internet service providers argue.

A federal appeals court set aside an FCC ruling that cable Internet service is solely an information service.

A lawyer for Brand X, a Santa Monica, Calif.-based Internet service provider, asked the justices to allow competition, while the FCC sided with the cable industry, which argues that an unfavorable ruling will discourage investment and slow the spread of broadband.

Government should not allow cable companies to become self-regulating, a step that would turn the concept of opening up lines to competition “a dead letter,” Brand X attorney Thomas Goldstein suggested.

Most computer users access the Internet through dial-up services, but broadband connections, through phone and cable lines and satellites, are faster. Broadband, which costs about $40 to $50 a month, depending on location, also features video conferencing.

Justice Stephen Breyer likened cable Internet access to telephone service, a parallel that would lead ultimately to competition.

The cable industry is not disputing that cable has both telecommunications and service aspects to it, but the combination is no longer two separate products, attorney Paul Cappuccio told the justices. The distinction is important because if cable Internet service is composed of two different products, it would come under stringent FCC regulation leading to leasing lines to competitors.

Chief Justice William H. Rehnquist pointed out that at a time when Congress and the executive branch have been moving “in the direction of deregulation,” opening up cable company lines to competitors would mean more regulation.

Breyer expressed doubts about overriding the course the FCC has set, suggesting the agency is far better equipped to anticipate events in the fast-moving telecom industry. Perhaps the best approach is to “leave it to the FCC,” Breyer said.

The case is National Cable & Telecommunications Association v. Brand X Internet Services, 04-277, and FCC v. Brand X Internet Services, 04-281.


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