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March 30, 2005

Brand X Coverage [7:14 am]

  • Wired News: Will Cable Quell the Competition?

    During oral arguments Tuesday, several justices probed in detail into the supposed logic of the two regulatory classifications, often questioning why cable operators should be treated differently than telcos.

    “The question is whether you’re still offering a telecommunications service to the public,” said Justice Antonin Scalia.

    Thomas Hungar, deputy solicitor general in the U.S. Justice Department, cited the different regulatory histories for cable operators and telcos, and pointed out that phone companies — unlike cable operators — offer telecommunications services on a stand-alone basis.

    NCTA’s lawyer, Paul Cappuccio, argued that cable-modem service involves both telecommunications and data services in a bundled offering, which in turn makes it a “separate product” worthy of its own classification.

    “We view it as two ingredients forming a product that is a distinct product,” he said, arguing that the court should defer to the FCC on such definitional matters.

    Brand X’s attorney, Thomas Goldstein, said the cable industry’s argument “becomes completely circular” if taken to its logical conclusion: Any bundled service can therefore be classified as something different by virtue of its bundled nature.

    He said that under such logic, retailers could circumvent laws against selling cigarettes to minors by simply bundling cigarettes with other products and calling it a “smoking service.”

    Furthermore, Goldstein said such reasoning allows companies to bundle offerings in an effort to “self-deregulate.”

  • Washington Post: FCC Ruling Limits Competition, ISP Tells Justices [pdf]

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