National Cable & Telecommunications Association v. Brand X Internet Services

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National Cable & Telecommunications Association v. Brand X Internet Services
Seal of the United States Supreme Court.svg
Argued March 29, 2005
Decided June 27, 2005
Full case name National Cable & Telecommunications Association et al. v. Brand X Internet Services et al.
Docket nos. 04-277
Citations 545 U.S. 967 (more)
125 S. Ct. 2688; 162 L. Ed. 2d 820; 2005 U.S. LEXIS 5018; 18 Fla. L. Weekly Fed. S 482
Prior history FCC order affirmed in part, vacated in part, remanded, Brand X Internet Servs. v. FCC, 345 F.3d 1120 (9th Cir. 2003); rehearing, rehearing en banc denied, 2004 U.S. App. LEXIS 8023 (9th Cir. Mar. 31, 2004); cert. granted, sub nom. Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 543 U.S. 1018 (2004)
Subsequent history On remand, sub nom. Brand X Internet Servs. v. FCC, 2006 U.S. App. LEXIS 1573 (9th Cir., Jan. 23, 2006)
Holding
The Court held that the FCC properly decided that cable service is an information service. Ninth Circuit Court of Appeals reversed and remanded.
Court membership
Case opinions
Majority Thomas, joined by Rehnquist, Stevens, O'Connor, Kennedy, Breyer
Concurrence Stevens
Concurrence Breyer
Dissent Scalia, joined by Souter, Ginsburg (only as to part I)
Laws applied
Telecommunications Act of 1996

National Cable & Telecommunications Association et al. v. Brand X Internet Services et al., 545 U.S. 967 (2005), is a United States Supreme Court case in which the Court declared in a 6-3 decision that the administrative law principle of Chevron deference to statutory interpretations by administrative agencies tasked with executing the statute trumped the precedents of the United States Courts of Appeals unless the Court of Appeals found that the statute was "unambiguous" under Chevron. The Supreme Court therefore upheld the Federal Communications Commission's determination that a cable Internet provider is an "information service," and not a "telecommunications service" and as such competing internet service providers, like Brand X, were denied access to the cable and phone wires to provide home users with competing internet service.

Background[edit]

In 1996, Congress passed the Telecommunications Act of 1996, which regulated telecommunications services. Providers of telecommunication services were subject to taxes and forced to sell access to their networks to the public.[1]

The Telecommunications Act also defined information services as "the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing."[2] These information services are not subject to the same taxes and regulations as telecommunications services.

Small Internet service providers, in the era of dial-up service, had equal access to home users because the first services were provided over plain old telephone services (POTS) which were regulated as common carriers. Cable television operators then started to use the coaxial cables to provide high speed access. Small ISPs like Brand X wanted to use the coaxial cables, owned by private cable companies but using public rights of way, in a manner like common carriers. The Federal Communications Commission (FCC) refused, and Brand X subsequently sued. The FCC won in the three judge panel in the Ninth Circuit but then lost en banc, which held that prior circuit precedent of the Ninth Circuit interpreting the sections in questions bound it.

This case was important in the battle over network neutrality in the United States.

Arguments[edit]

Brand X[edit]

The Brand X Internet Service Provider argued that where circuit precedent conflicts with administrative interpretation, Chevron deference ought not apply; substantively, Brand X argued cable companies should be classified as a telecommunications service because they are conduit for simple data communication and should therefore be required to allow their rivals to use the telecommunication component of their service. This would allow rivals like AOL and Earthlink to offer faster internet connections to their subscribers.[1]

National Cable and Telecommunications Association[edit]

The National Cable and Telecommunications Association (NCTA) argued first that the FCC's determination ought to be entitled to Chevron deference, despite the Ninth Circuit's precedent. Substantively, they argued that because they offered more than just telecommunication services but other information services as well, they should be classified as an information service and therefore not fall under the regulations imposed upon telecommunication services.

Opinion of the Court[edit]

The Court ruled 6-to-3 that because the Ninth Circuit precedent found the Telecommunications Act provisions "vague," that case was not entitled to preference over the decisions of the agency. Moreover, the Supreme Court agreed that the provisions were vague and ambiguous; since under Chevron an administrative agency's interpretations of statutes it is responsible for are entitled to deference, the FCC (charged with enforcement of the Telecommunications Act) was entitled to deference in its determination.[3] More generally, the Court ruled that in matters of interpreting a statute the execution of which an administrative agency is charged, the agency's interpretation will be applied even in the face of circuit precedent, unless that precedent had found the statute "unambiguous" under Chevron rules (i.e. that after analysis under the traditional canons of statutory interpretation, the statute's meaning was clear). The decision of the Court of Appeals was therefore reversed.

Ultimately, the FCC decided that cable companies were information services and did not have to allow their competitors access to their faster connections.[4]

References[edit]

External links[edit]

  • Text of National Cable & Telecommunications Association v. Brand X Internet Services, 545 U.S. 967 (2005) is available from:  Findlaw  Cornell LII