AT&T and Friends File Briefs in the Portland Cable Access Case

(September 3, 1999) AT&T and its supporters have filed their briefs with the Court of Appeals in the Portland cable access case. They predictably argue that the City of Portland does not have authority to mandate "open access" to broadband Internet access provided over cable facilities. However, their legal reasoning includes the argument that the FCC has authority to regulate this form of broadband Internet access as a "cable service", which would add to the FCC's Internet regulatory powers.

The main issue in the case AT&T v. Portland is whether Portland and other local governments can impose conditions on providers of broadband cable Internet access. The City of Portland decided in January that AT&T must open its cable facilities to competing Internet Service Providers (ISPs). AT&T, which is spending many billions of dollars to acquire cable companies and upgrade their facilities to provide Internet access, does not want to give its competitors a free ride on its facilities. So, AT&T filed suit in federal court.

Senior U.S. District Court Judge Owen Panner issued his Opinion in June, in which he agreed with Portland. Now, AT&T has appealed to the Ninth Circuit Court of Appeals. A host of friends of AT&T, including excite@home, the NCTA, and Hands Off the Internet, have filed amicus curaie briefs.

The question of whether AT&T must provide open access has dominated the public pronouncements of AT&T, its supporters, and the open access movement. Little attention has been paid to the legal reasoning that bolsters the claims of both sides.

Yet, if the legal arguments of AT&T and its supporters are written into law by the Ninth Circuit, the consequences would far reaching, and would affect much more than the open access question. It could advance the Federal Communications Commission's authority to regulate the Internet.

Despite its rhetoric about not wanting the government to regulate the Internet, AT&T is not arguing that governments should not regulate the internet. It is arguing that local governments should not, but that the FCC should.

AT&T's main legal arguments, and those of its industry friends, are complex, but based on one authority: the Cable Act of 1984, as amended in 1996. The arguments are that the Cable Act preempts the City of Portland, and all local cable regulatory authorities, from mandating open access.

There are four arguments based on the Cable Act.

AT&T's brief states that the Ordinances of the City of Portland "are preempted by four separate provisions of the Communications Act. Each unconditionally prohibits local franchising authorities from requiring cable systems to act like telephone companies and to carry third parties’ services, and there is no exception to these prohibitions for transfer of control proceedings conducted under 47 U.S.C. § 533(d)."

First, AT&T's brief states that "Section 541(b)(3)(D) provides that 'a franchising authority may not require a cable operator to provide any telecommunications . . . facilities' as a 'condition' of the grant, renewal, or transfer of a cable franchise. The Ordinances violate this express prohibition by requiring TCI to provide telecommunications transmission facilities to any requesting ISP as a condition of the transfer of control of the Portland franchise to AT&T."

Second, AT&T argues that "Section § 544(e) provides that '[n]o State or franchising authority may prohibit, condition, or restrict a cable system’s use of any type of subscriber equipment or any transmission technology.' " AT&T elaborates that the purpose of this section is to prohibit local authorities from regulating technical standards.

"The violation of § 544(e) here is patent," AT&T asserts. "The technologies used by TCI today indisputably cannot provide interconnection and access for multiple ISPs. ... The Ordinances prohibit, condition, and restrict the existing technology that TCI uses today, that it plans to use in the future, and that does not support access to multiple parties. Thus, TCI would be 'prohibited' by the Ordinances from using its chosen transmission technology if it offered cable modem service."

Third, AT&T argues that "In Title VI, Congress adopted specific, narrowly defined 'must carry' and other specific access requirements that set aside particular numbers of cable system channels for particular kinds of programming." But, AT&T continues that "Section 541(c) provides that a 'cable system shall not be subject to regulation as a common carrier or utility by reason of providing any cable service.' "

"The Ordinances violate this prohibition. They subject TCI to a forced access requirement 'by reason of' its provision of the TCI@Home cable service, and courts have uniformly held that a requirement that a cable system carry the programs or services of a specified category of users is a prohibited common carrier regulation."

Fourth, AT&T argues that "Section 544(f)(1) provides that '[a]ny Federal agency, State, or franchising authority may not impose requirements regarding the provision or content of cable services, except as expressly provided in [Title VI].' "

"The Ordinances expressly condition TCI’s provision of the TCI@Home cable service to its Portland-area customers on TCI’s “agreement” to supply unaffiliated ISPs with a direct connection to the cable system on nondiscriminatory terms. In other words, TCI’s “provision” of the TCI@Home cable service and any other interactive online cable services triggers the Ordinances’ forced access requirements. That violates the plain terms of § 544(f)(1)."

AT&T also advances several more tenuous constitutional arguments.

The industry amicus briefs follow AT&T's arguments, although not in as much detail. Hands Off the Internet (HOTI) is a public advocacy group which has filed an amicus curiae brief with the Ninth Circuit. It likewise argues that the Cable Act preempts local action. AT&T is the most prominent of the 16 members of HOTI.

Excite@Home also filed an amicus brief with the Appeals Court. It too argues that ".. the mandatory access provisions in the Municipal Ordinances are preempted by Federal law." Excite@Home is another leading provider of broadband Internet services over the cable television infrastructure.

Its brief continued that, "The inevitable disputes over cost allocation, rates, technical standards, and even the definition of “access” itself will to endless litigation. Implementation of any unbundling scheme would consume the resources of governmental authorities and private parties in contentious, ongoing regulatory proceedings that will only deter investment and frustrate the development of facilities-based competition. It was precisely to avoid bringing this regime down on cable operators and suppliers of cable services that Congress enacted sections 621(b)(3)(D) and 621(c) of the Communications Act."

"The technical issues presented by the Municipal Ordinances are closely analogous to the technical issues that the FCC and state regulators must address when they require local telephone companies to unbundle their networks for the use of competitive providers of basic telephone service. The centrality of these matters to the implementation of the mandatory access requirement underscores the fact that the mandatory access provisions would unlawfully impose “common carrier or utility” regulation on cable systems, in violation Federal law."

There is a substantial problem with the arguments of AT&T and its friends. It presumes that the Cable Act applies to broadband Internet access services which involve coaxial cable. It assumes that the Cable Act gives the FCC, the City of Portland, and other governmental bodies various powers to regulate broadband Internet access. This is altogether novel, and quite arguably, incorrect. And if accepted, it would also expand the scope of government regulatory authority over Internet services.

Continue to Part 2
Is Broadband Internet Access a Title 47 Cable Service?