In their second major ruling on Monday, the U.S. Supreme Court reversed a federal court verdict that would have required cable companies to open up their networks to third party Internet service providers. The decision will severely limit broadband operations for competing ISPs such as Brand X and EarthLink.
"The Bush administration has made it clear that they are hostile toward small, independent service providers like us. And we think that is a big disaster for consumers, and a huge win for the monopolistic phone and cable companies, which spend millions of dollars on lobbying efforts," said Jim Tickrell, president of Brand X Internet.
Under The Communications Act of 1934, cable companies are defined as "information services", allowing them to restrict access to cable lines. This is in contrast to telephone companies, which – under the bill – are required to share their lines with competitors. Companies like Comcast and Time Warner argued that opening up the market to further competition would damage their business and lead to a decline in the amount of money they invested in their networks.
Along with the ruling, the court also reinforced the FCC"s ability to make critical decisions when it comes to interpreting the nuances of the Communications Act. Because the case was so technically involved, the court said it was reasonable to defer to the expertise of the FCC.