National Cable & Telecommunications Association et al. v. Brand X Internet Services et al., 545 U.S. 967 (2005), is a case in which the United States Supreme Court declared 6-3 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.
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 FCC refused, and Brand X subsequently sued. The FCC won in the three judge panel in the Ninth Circuit but then lost en banc.
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.
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." These information services are not subject to the same taxes and regulations as telecommunications services.
This case was important in the battle over Network neutrality in the United States. With cable companies having control over faster broadband services, consumer choice becomes limited, and rival companies are left with little chance to compete. Network neutrality is compromised when restrictions are placed on the modes of communication.
The Brand X Internet Service Provider argued that 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.
National Cable and Telecommunications Association
The National Cable & Telecommunications Association (NCTA) 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.
The court ruled 6-to-3 that the law regarding the distinction between telecommunication services and information services was vague, and that the FCC has the authority to make the decision. The decision of the Court of Appeals was reversed.
Ultimately, the FCC decided that cable companies were information services and did not have to allow their competitors access to their faster connections.