Brand X: Case Closed

Joseph Laszlo | June 27, 2005, 02:15 PM

In addition to Grokster, the Supremes today issued a decision in the cases of NCTA and FCC v. Brand X ("Brand X Case"), wherein a small, independent ISP convinced the 9th Circuit Court of Appeals that cable modem services should be regulated like DSL services, in other words, made available at cost-based wholesale prices to competing ISPs.

In a 6-3 ruling, the Court threw out this decision, saying that instead the FCC was within its powers to regulate DSL one way (as a "telecommunications service") and cable modem services another (as an "information service"). And despite a court precedent that defined cable modems as telecommunications services, the FCC's wisdom in these matters is typically paramount.

The Brand X case was a real longshot, I think even those of us who sympathize with small ISPs, and want to see more competition in the US broadband industry, didn't really think it likely that the FCC would side with Brand X.

In terms of impact, the decision keeps the status quo in the US; our forecast assumed that anyway, so JupResearch won't be changing our view of the market's growth based on this result. While arguably broadband would grow even faster in a Brand X world, it's growing plenty fast in the US anyway.

Scalia wrote the dissent, in many ways it's the more interesting thing to read, if only because he goes on for a long time with a frankly kind of odd metaphor comparing a cable modem service to a pizza delivery service.