FCC Files Amicus Curiae Brief in Cable Access Case

(August 16, 1999) The Federal Communications Commission filed a "friend of the court" brief today with the Ninth Circuit in AT&T v. Portland, an appeal from a trial court decision upholding the City of Portland's open cable access decision.

The Federal Communications Commission's lengthy brief argues that the issue before the court is whether "local governments have the authority to impose local restrictions in broadband technology, particularly in light of the FCC's finding that it should not regulate the broadband market at this time."

The brief does not expressly advocate reversal of U.S. District Court Judge Owen Panner's Opinion, which upheld the authority of the City of Portland to condition the transfer of control of TCI's cable licenses on AT&T's opening of its Internet cable facilities to competing ISPs.

The brief  presents a lengthy argument that the FCC has engaged in a 30 year policy of fostering unregulated access to the Internet. It continues that the FCC saw no need to condition its approval of the transfer of TCI licenses on ATT's providing open cable access.

The brief also argues that the characterization of broadband cable access as a "cable service" by AT&T, the City of Portland, and Judge Panner, may be faulty. However, the FCC brief takes no position as to whether this service is "cable", "telecommunications" or "information." The classification also affects many things not involved in this case.

The brief also argues that Judge Panner erred on the preemption issue. Rather than arguing, as AT&T has, that local authority in this situation has been expressly preempted by federal statute, the FCC brief argues for the theory of "agency preemption."

The brief concludes that "... the Court should recognize that there is an unresolved controversy concerning the proper characterization of cable modem service, keep in mind the possibility of agency preemption ... , and resolve the dispute presented in a narrow fashion."

The FCC's amicus curiae brief (or "friend of the court" brief) was filed on Monday, August 16, 1999 with the U.S. Court of Appeals, Ninth Circuit, in the case AT&T et. al. v. City of Portland et. al.  The outcome could have a major impact on the deployment of broadband Internet access to residential customers.

The FCC has approved the merger of AT&T and TCI. In doing so, the FCC declined requests from ISPs to impose an open access condition. However, several local cable regulatory agencies with authority to approve of license transfers have taken the position that they have the authority to condition license transfers on open access, and have in fact attempted to impose such a condition upon AT&T.

AT&T filed a Complaint in federal district court in Portland, Oregon, on January 19, 1999, for a declaratory judgment that the City of Portland and the County of Multnomah illegally refused to grant AT&T/TCI's request for change of control. On June 3, Judge Owen Panner issued his Opinion upholding the decisions of Portland and Multnomah County.

AT&T promptly appealed to the 9th Circuit Court of Appeals. AT&T filed its original Appeal Brief on August 9, 1999.

The FCC brief elaborates on why it did not impose an open access condition upon AT&T. The brief, quoting from an earlier FCC Report, states: "many other firms already are deploying or seeking to deploy high-speed Internet access services to residential customers using other distribution technologies, and ... some of these firms may emerge as competitors in markets served by @Home."

The brief continues that "[i]ncumbent LECs have been developing the capability through xDSL technology to deliver high-speed Internet access services over their twisted-pair wires connecting most homes to their networks". The brief also cites further competition from satellite-based Internet services, electric utility companies, and wireless companies.

On the issue of whether broadband cable Internet access is a "cable service" the FCC brief states:

"Each of AT&T's statutory arguments is premised on its view that cable modem service is a "cable service" within the meaning of section 602(6) of the Communications Act rather than an "advanced telecommunications service" within the meaning of section 706 of the 1996 Telecommunications Act. The local franchising authorities accept AT&T's premise that cable modem service is a "cable service" within the meaning of section 602(6) -- otherwise, they would have no authority to order open access. But the Commission has noted the existence of a serious dispute concerning the proper classification of cable modem service, although it has not yet resolved the issue."

The brief goes on to conclude that "the Commission has not yet conclusively resolved the issue."

On the question of federal preemption of local authority, the FCC brief states:

"The district court erred when it stated that local regulation of cable service can only be preempted by an "unmistakably clear" statutory provision. ... The Supreme Court has held that even in the absence of express statutory preemption, the FCC may preempt local cable regulations that conflict with federal policy, so long as the Commission acts "within the scope of its congressionally delegated authority.""

The brief concludes: "It therefore would be preferable if the Court recognized the possibility of agency preemption even in the absence of express statutory preemption ..."