Amicus Curiae Brief — National Cable & Telecommunications Ass'n v. Gulf Power Co.

Supreme Court brief2001

Ask Donna

What actually matters in this document.

Text

APR 6 2el @ | eee

Nos. 2 and 00-843

Supreme Court of the Anited

FEDERAL COMMUNICATIONS COMMISSION, ef ai.,

Petitioners,

Vv.

GULF POWER COMPANY, et ai.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Eleventh Circuit

BRIEF OF EARTHLINK, INC. AS AMICUS CURIAE

IN SUPPORT OF NEITHER PARTY

DAVE BAKER

Vice President

Law and Public Policy

EARTHLINK, INC.

1430 West Peachtree Street

Atlanta, GA 30309

(404) 815-0770

* Counsel of Record

JOHN W. BUTLER *

EARL W. COMSTOCK

HEATHER M. SPRING

SHER & BLACKWELL

1850 M Street, NW, Ste. 900

Washington, D.C. 20036

(202) 463-2500

Counsel for EarthLink, Inc.

eee

WiLSON-EPES PRINTING Co., INC. — (202) 789-0096 -— WASHINGTON, D. C. 20001

TABLE OF CONTENTS

INTEREST OF AMICUS EARTHLINK, INC...............

SUMMARY OF ARGUMENT ............ccccscssssssseesersesees

A. The Court Of Appeals Properly Rejected The

Commission’s Claim That It Could Disregard

Subsections (d) and (e) Of Section 224 .............

B. Internet Access Service Is Not A “Cable

Service,” And The Entities That Seek Attach-

ments Do Not Operate “Cable Television

Systems” When They Provide Internet Access

rrr haccuaitcintenescstibiidaridenindnsaninnpsidiicniaatiemeetinaiain

C. The Pole Attachments At Issue Are Used To

Provide A Telecommunications Service Under

The Plain Language Of The Statute And The

Commission’s Longstanding Precedent.............

1. The Communications Act Analysis .............

a. Internet Access Service Is Itself An

“Information Service” ..............cccceeseeeeees

b. Information Services Such As Internet

Access Are Delivered Via Telecom-

ETS ae Ca

c. The Telecommunications Used To

Deliver The Information Service

Known As Internet Access Is Offered

To The Public For A Fee And Is Thus

A Telecommunications Service .............

(i)

TABLE OF CONTENTS—Continued

Page

2. Twenty Years Of Commission Precedent

Holds That Information Services Offered

To The Public Are Always Delivered

Using A Telecommunications Service......... 22

CONCLUSION ..........cscccsssseseeeeseeeeeeesernnensenneseenneenenneees 29

TABLE OF AUTHORITIES

CASES Page

AT&T Corp. v. City of Portland, 216 F.3d 871

SY eee brricnscnsscsvesnumecvenssensenesoesssnse 9, 10, 14, 26

Chevron USA., Inc. v. Natural Resources

~ Defense Council, Inc., 467 U.S. 837 (1984)...... 4

City of Dallas, Texas v. F.C.C., 165 F.3d 341

STE GI rtnstisensenesenenssesenssesssceuersesnscseses 11,29

Gulf Power Co. v. F.C.C., 208 F.3d 1263 (11th

Ee passim

MediaOne Group, Inc. v. County of Henrico, 97

F, Supp.2d 712 (E.D. Va. 2000) .0.........ccccceceeeees 10

Morton v. Ruiz, 415 U.S. 199 (1974) 0... ..cccccceeeeeee 11

Nat'l Assoc’n of Regulatory Utility Comm'rs v.

F.C.C., 525 F.2d 630 (D.C. Cir. 1976) .............. 20

Nat'l Assoc’n of Regulatory Utility Comm'rs v.

F.C.C., 553 F.2d 601 (D.C. Cir. 1976) .............. 28

Texas Utilities Electric Co. v. F.C.C., 997 F.2d

I nica ceaesrenesnsgusnesnncscscnssses 12, 13

Virgin Islands Telephone Corp. v. F.C.C., 198

Pe Ee ics Gell BOP ccccccccccccsscscescscscssessccees 20

AGENCY DECISIONS

Filing and Review of Open Network Architecture

Plans, 4 F.C.C.R. 1 (1988),.......:cccccccceseeeeeeeeeeeeees 24

In the Matter of Amendment of Section 64.702 of

the Commission's Rules and Regulations

(Second Computer Inquiry), Final Decision,

77 F.C.C.2d 384 (1980) ......cccccceeeeeee 21, 22, 23, 24, 27

In the Matter of Applications for Consent to the

Transfer of Control of Licenses and Section

214 Authorizations from MediaOne Group,

Inc. To AT&T Corp., Memorandum Opinion

and Order, 15 F.C.C.R. 9816 (2000).................. 3

TABLE OF AUTHORITIES-—Continued

Page

In the Matter of Applications for Consent to the

Transfer of Control of Licenses and Section

214 Authorizations from Tele-Communica-

tions, Inc. To AT&T Corp., Memorandum

Opinion and Order, 14 F.C.C.R. 3160 (1999) ... 3

In the Matter of Computer Ill Further Remand

Proceedings: Bell Operating Company Provi-

sion of Enhanced Services, 1998 Biennial

Regulatory Review—Review of Computer Ill

and ONA Safeguards and Requirements, 13

peed FT | 23

In the Matter of Deployment of Wireline Services

Offering Advanced Telecommunications Capa-

bility, Order on Remand, 15 F.C.C.R. 385

ee 18, 25

In the Matter of Federal-State Joint Board on

Universal Service, Report To Congress, 13

jes Bi) fT, 17, 18, 21, 23

In the Matter of Implementation of Section

703(e) of the Telecommunications Act of 1996,

Amendment of the Commission’s Rules and

Policies Governing Pole Attachments, Report

and Order, 13 F.C.C.R. 6777 (1998)........ccc0eee0e+ passim

In the Matter of Implementation of Section 703 of

the Telecommunications Act of 1996, Amend-

ments and Additions to the Commis-

sion’s Rules Governing Pole Attachments, 11

ee BO ee 16

In the Matter of Implementation of the Local

Competition Provisions in the Telecommun-

ications Act of 1996, 11 F.C.C.R. 15499

TABLE OF AUTHORITIES—Continued

In the Matter of Independent Data Commu-

nications Manufacturers’ Assoc’n, Inc.,

Petition for Declaratory Ruling That AT&T's

Frame Relay Service is a Basic Service,

Memorandum Opinion and Order, 10 F.C.C.R.

Sy Weare sinsciicteieciniensnsinsndidinstuasiieiinsdieteaiaenites 26, 27

In the Matter of Internet Ventures, Inc. and

Internet On-Ramp, Inc. Petition for Declara-

tory Ruling, Memorandum Opinion and Order,

EL 11

In the Matter of Policy and Rules Concerning the

Interstate, Interexchange Marketplace, Report

and Order, CC Docket Nos. 96-61, 98-183

[Fonts UD aT tcencniceenntinsncdinenssnemssneatinaitaseeassitiaes 21

STATUTES

ec ae e IEE passim

al eS ET 3

al en ED 3

ode passim

kf ee 11

lp a aT 9,11

Te 3

REGULATIONS

ee a 10, 11, 12, 13

i | —_ C 15

MISCELLANEOUS

In the Matter of Implementation of Section

703(e) of the Telecommunications Act of 1996,

C.S. Docket No. 97-151, Comments of NCTA

a ee NE ciceiiiieieietcieceinaniesiceiantarineiasnicitiiniin 12

TABLE OF AUTHORITIES—Continued

Page

Notice of Inquiry Concerning High-Speed Access

To the Internet Over Cable And Other

Facilities, GN Docket No. 00-185 (2000) ......... 3

In the Matter of Policy and Rules Concerning the

Interstate, Interexchange Marketplace, Further

Notice of Proposed Rulemaking, 13 F.C.C.R.

21531 (199) ....ccccccccesscrcccccscccseccsccccsocsssscoosonsoooes 28, 29

Update and Refresh Record on Computer Ill

Requirements, 66 Fed. Reg. 15064 (2001)......... 23

IN THE

Supreme Court of the Anited States

FEDERAL COMMUNICATIONS COMMISSION, ef ai.,

Petitioners,

Vv.

GULF POWER COMPANY, et ai.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Eleventh Circuit

BRIEF OF EARTHLINK, INC. AS AMICUS CURIAE

IN SUPPORT OF NEITHER PARTY

INTEREST OF AMICUS EARTHLINK, INC. '

EarthLink, Inc. (“EarthLink”), having obtained the written

consent of the parties pursuant to Rule 37.3 of the Rules of

this Court,” submits this brief as amicus curiae. EarthLink is

the second largest Internet service provider (“ISP”) in the

nation. EarthLink is the largest ISP that is not controlled by or

under common ownership with a cable television company.

The first question on which certiorari was granted—the scope

of the authority of the Federal Communications Commission

(“FCC” or “Commission”) under section 224 of the

' In accordance with the Court's Rule 37.6, EarthLink and its counsel

certify that no counsel for a party authored this brief in whole or in part

and that no person or entity other than EarthLink made any monetary

contribution to the preparation or submission of this brief.

Fhe consents have been filed with the Clerk with this brief.

Communications Act of 1934° to regulate the rates for pole

attachments made by cable companies that offer Internet

access service—is of critical interest to EarthLink for two

reasons.

First, to the extent that EarthLink is able to purchase from

cable companies transmission services that EarthLink may

use to deliver its Internet access services to consumers, the

price that EarthLink will pay for such transmission will

depend in part on how much a cable company may have to

pay to a utility to attach its cables to the utility’s poles.

Second, and ultimately of much greater consequence, the

proper application of section 224 to pole attachments used by

cable companies to deliver Internet access services to

consumers will require that the Court decide whether such

attachments are used in the provision of “cable service” or

“telecommunications service.” 7

Because the statutory definitions that control that decision

apply to the entire Communications Act, not just section 224,

how the statutory classification question is answered will

determine not only the applicable rate for pole attachments,

but also whether ISPs such as EarthLink, which do not have

their own transmission facilities, will be able to purchase use

of transmission facilities from cable operators. The reason

that access to transmission services is implicated by the

> The Communications Act of 1934 is codified generally at 47 U.S.C.

§§ 151 et seg. There are numerous references in the record to the “Pole

Attachments Act.” Section 224 (Regulation of Pole Attachments) was

added to the Communications Act of 1934 by section 6 of the

Communications Act Amendments of 1978, P.L. 95-234, 92 Stat. 35,

which also amended other parts of the Communications Act.

Accordingly, there is no “Pole Attachments Act,” and when EarthLink

speaks of the “Act” or the “Communications Act,” it means the

Communications Act of 1934, as amended. The point is not purely

semantic, because the statutory terms discussed in the analysis below

apply to the entire Act, not just section 224. See 47 U.S.C. § 153 (“For

the purposes of this Act, unless the context otherwise requires — . . . .”).

court’s resolution of the statutory classification issue is that

providers of telecommunications services are required under

sections 201 and 202 of the Communications Act to sell their

teiecommunications Services on nondiscriminatory terms to

all qualified buyers.‘ 47 U.S.C. §§ 201, 202. Providers of

cable services are not subject to the same obligation.

47 U.S.C. § 541(c).

SUMMARY OF ARGUMENT

Petitioners FCC and the National Cable Television

Association, Inc. (“NCTA”) have presented the issue of the

Commission’s authority to regulate pole attachments for

* As the power utility parties note in their Brief in Opposition to the

petitions for certiorari, the FCC has requested and received comments on

the question of whether transmission services used by cable companies to

provide Internet access constitute “telecommunications services.” See

Appendix to Brief In Opposition (FCC Notice of Inquiry Concerning

High-Speed Access to the Internet Over Cable and Other Facilities, GN

Docket No. 00-185 (2000)). The Commission has issued no order in that

docket. The issue of ISP access to cable transmission services has also

been raised in earlier Commission proceedings, but the Commission has

refused to address it. See, e.g., In the Matter of Applications for Consent

to the Transfer of Control of Licenses and Section 214 Authorizations

from MediaOne Group, Inc. to AT&T Corp., Memorandum Opinion and

Order, 15 F.C.C.R. 9816, 9872 (2000) (“{T]}he Commission has not

determined whether Internet access via cable system facilities should be

classified as a “cable service” subject to Title VI of the Act, or as a

“telecommunications” or “information service” subject to Title Il. There

may well come a time when it will be necessary and useful from a policy

perspective for the Commission to make these legal determinations.”). See

also In the Matter of Applications for Consent to the Transfer of Control

of Licenses and Section 214 Authorizations from Tele-Communications,

Inc. to AT&T Corp., Memorandum and Order, 14 F.C.C.R. 3160, 3201,

3207 (1999). The fact that the Commission has had squarely presented to

it the issue of the proper classification of cable-based transmission

services used to deliver Internet access but has consciously declined to

address it makes somewhat hollow the Commission’s request that the

Court remand that issue to the Commission if the Court disagrees with the

outcome below. See Commission Reply To Brief In Opposition at 5.

cable facilities used to transmit Internet access services as one

that turns on a plain reading of sections 224(a)(4) and

224(b)(1). See, e.g., Commission Petition at 12. The electric

utility respondents, on the other hand, contend that resolution

of the first issue upon which certiorari was granted requires

that the Court decide whether pole attachments used for cable

facilities over which Internet access services are transmitted

are used to provide “cable service” or “telecommunications

service.” Brief in Opposition at 7. EarthLink agrees with

respondents that determining whether the Commission has

properly applied its pole attachment authority under section

224 requires that the Court determine the statutory

classification of the services for which the pole attachments

are used.

A straightforward application of the plain language of the

Act and uncontested and longstanding Commission precedent

demonstrates that the pole attachments at issue are used to

provide telecommunications service when they are used to

deliver Internet access service to the public.’ This is so

because Internet access service is itself an “information

service,” which the Act states by definition is provided “via

telecommunications.” 47 U.S.C. § 153(20). When “tele-

*In its February 5, 2001, Motion for Leave to Dispense With

Preparation of a Joint Appendix, the Commission stated that: “The

questions presented are questions of law.” /d. at 1. EarthLink agrecs.

EarthLink also believes that those questions may be resolved by a plain

reading of the Act, and accordingly that there are no statutory ambiguities

with respect to which the Court owes any deference to the Commission's

interpretation. Chevron U.S.A. Inc. v. Natural Resources Defense Council,

Inc., 467 U.S. 837, 843 (1984).

° The appeals court properly noted that Internet access service is itself

an “information service.” Gulf Power Co. v. F.C.C., 208 F.3d 1263, 1277

(11th Cir. 2000); Appendix To Commission’s Petition for Writ of

Certiorari at 30a (hereinafter “Commission Appendix”). As discussed

further below, however, the court’s failure to recognize that every

communications” is offered to the public for a fee, it is a

“telecommunications service.” 47 U.S.C. § 153(46). The

information service known as Internet access and the

telecommunications over which that service by definition

rides are both being offered to the public for a fee by the

cable companies using pole attachments for which those

companies seek regulated rates. Thus, the pole attachments at

issue are used to provide a telecommunications service, and

such attachments are properly assigned the section 224(e)

rate.

A plain reading of the Act also makes clear that Internet

access service is not a “cable service,” and that the entities

making pole attachments to provide Internet access service

are not operating “cable television systems” to the extent that

they use their cable facilities to provide Internet access

service. Properly determining that the pole attachments at

issue are used to provide telecommunications services

compels the result that rates for such attachments must

conform to the criteria set forth in section 224(e) in the

absence of a voluntary agreement between the utility and the

attaching entity.’ :

To summarize, application of the authorities discussed

below leads to the following conclusions. (1) As the

information service offered to the public for a fee necessarily includes a

telecommunications service renders its analysis fatally incomplete.

” As EarthLink discusses in section C, infra, the Commission has made

it clear that a single rate applies to each pole attachment, regardless of the

number of different types of service provided using that attachment (e.g.,

cable service and telecommunications service). This is consistent, for

example, with the language of section 224(d)(3), which provides that the

rate specified in that section applies to pole attachments used to provide

both cable services and telecommunications services until the new rate

described in section 224(e) is established. 47 U.S.C. § 224(d)(3). After

February 8, 2001, when telecommunications services are offered over the

same attachments as cable services, the section 224(e) rate applies. See

Commission Appendix at 65a, n. 26.

Commission has stated, Internet access is an “information

service” under the Act. (2) By the plain terms of the Act,

“information services” are provided “via telecommunica-

tions.” 47 U.S.C. § 153(20). (3) Telecommunications offered

to the public for a fee constitutes “telecommunications

service,” “regardless of the facilities used.” 47 U.S.C.

§ 153(46). (4) Pole attachments used to transmit Internet

access service to the public are being used to provide a

“telecommunications service” to which the section 224(e)

pole attachment rate applies.

The purpose of this brief is to bring to the attention of the

Court the legal authorities that provide this clear and simple

resolution. In applying these authorities to the decision below,

EarthLink urges the Court to overturn that part of the lower

court’s decision that states that the Commission has no

authority to regulate pole attachments used by cable

companies to deliver Internet access services, but to affinn

those parts of the decision that hold that Internet access is not

a cable service and that the Commission musi follow the

mandates of sections 224(d) and 224(e) in applying its pole

attachment rate authority.

ARGUMENT

A. The Court Of Appeals Properly Rejected The

Commission’s Claim That It Could Disregard

Subsections (d) and (e) Of Section 224.

At the outset, EarthLink agrees with the Eleventh Circuit

and the utility companies that the proper application of

section 224 requires that the statutory classification of the

services for which pole attachments are used must always be

determined before the Commission may set a rate for those

attachments. Gulf Power v. F.C.C., 208 F.3d at 1276;

Commission Appendix at 27a; Brief in Opposition at 13.

This is so because the Act provides no discretion to the

Commission as to whether to apply the section 224(e) rate if

the pole attachment at issue is used to provide

“telec mmunications services.” As the Commission itself

held in the order under review, the provisions of section

224(e) are mandatory if they are applicable:

We note that in the one case where Congress

affirmatively wanted a higher rate for a particular

service offered by a cable system, it provided for one in

section 224(e). In requiring that the Section 224(d) rate

apply to any pole attachment used ‘solely to provide

cable service,’ we do not believe Congress intended to

bar the Commission from determining that the Section

224(d) rate methodology also would be just and

reasonable in situations where the Commission is not

statutorily required to apply the Section 224(e) rate.

In the Matter of Implementation of Section 703(e) of the

Telecommunications Act of 1996, Report and Order, 13

F.C.C.R. 6777, 6796; Commission Appendix at 90a

(emphasis added) (the Commission’s order below is

hereinafter referred to as the “Order’’).

Because the Commission acknowledges that it must apply

the section 224(e) attachment rate if a pole attachment is used

to provide a “telecommunications service,” and because the

Commission further recognizes that the section 224(e) rate is

different from the section 224(d) rate that the Commission

chose to apply, it is necessary in applying section 224 first to

determine whether the admittedly mandatory rates prescribed

by section 224(e) apply. If those rates do apply, that is the

end of the matter, and there is no need to determine whether

the Commission has any discretion to set rates for services

that could hypothetically fall outside of the “cable service”

and “telecommunications service” classifications. Accord-

ingly, the Commission’s Order is fundamentally flawed

because the Commission quite consciously decided not to

answer the threshold question of whether the relevant pole

attachments are used to provide a “telecommunications

service” (and are thus covered by section 224(e)), or whether

they are used “solely to provide cable service” and are

therefore grandfathered at a lower rate under section

224(d)(3). In its Order, the Commission stated: -

We need not decide at this time, however, the precise

category into which Internet services fit. Such a

decision is not necessary in order to determine the pole

attachment rate applicable to ‘cable television systems

using pole attachments to provide traditional cable

services and Internet services.

Commission Appendix at 89a-90a.

If it turned out that cable-based Internet access services

were in fact “solely” cable services, then the analytical

infirmity of the Commission’s abbreviated approach would

have no practical effect because the rate that the Commission

set would comport with the rate set by the statute, albeit for a

reason different from that stated by the Commission. In a

more complex situation, if the Commission had determined

that the pole attachments were used to provide neither a

“cable service” nor a “telecommunications service,” then this

Court would be faced with two questions. The first would be

whether the Commission was correct in its classification of

the service for which pole attachments were sought. If that

question were answered in the affirmative, the second

question that would have to be addressed would be the one

that the Commission seeks to have answered, namely,

whether the Commission has independent authority under

sections 224(a)(4) and 224(b)(1) to set pole attachment rates

for cable facilities used to transmit Internet access services.

Neither of those scenarios is presented here.

As EarthLink demonstrates below, the pole attachments at

issue here are used to provide a “telecommunications service”

when they are used for communications links over which

Internet access services are transmitted to the public.

Accordingly, the Commission’s failure to address the

question of whether the pole attachments are used in the

provision of telecommunications services renders its Order

invalid. However, because the pole attachments at issue are as

a matter of law used to provide “telecommunications

service,” the Eleventh Circuit’s holding that the Commission

has no jurisdiction over cable company attachments used to

provide Internet access service is incorrect and should be

reversed."

B. Internet Access Service Is Not A “Cable Service,”

And The Entities That Seek Attachments Do Not

Operate “Cable Television Systems” When They

Provide Internet Access Service.

As noted above, if the service at issue were in fact “solely”

a cable service, then the Commission’s Order, although

analytically infirm, would be legally supportable on grounds

other than those offered by the Commission. This possibility

need not long delay the Court. The Eleventh Circuit’s

reasoning as to why Internet access is not a “cable service” is

undeniably correct. That reasoning echoes the reasoning of

the Ninth Circuit Court of Appeals in AT&T Corp. v. City of

Portland, 216 F.3d 871 (9th Cir. 1999). Both the Eleventh

Circuit and the Ninth Circuit properly concluded that the

Communications Act’s definition of “cable service,” which

states that cable service is the “one-way transmission to

subscribers of (i) video programming, or (ii) other

programming service. . . ,” does not apply to Internet access

service. 47 U.S.C. §522(6). As both courts recognized,

Internet traffic is in no sense “one-way,” nor does it have the

* Because the Act is clear that the definition of “telecommunications

service” does not depend on the nature of the facilities used to provide

that service, 47 U.S.C. § 153(46), EarthLink agrees with the FCC that the

Eleventh Circuit’s decision on the second issue on which certiorari was

granted should be reversed.

other attributes of the services that Congress designated as

“cable services.” See Portland, 216 F.3d at 876-77; Gulf

Power, 208 F.3d at 1276-77; Commission Appendix at 27a-

29a. But see MediaOne Group, Inc. v. County of Henrico,

Virginia, 97 F. Supp.2d 712, 715 (E.D. Va. 2000) (appeal

pending 4th Cir.). Accordingly, the decision below should be

affirmed as written with respect to the conclusion that

Internet access service is not a “cable service.”

Related to the point that Internet access services are not

cable services is the fact that the transmission facilities for

which cable companies here seek attachments are not “cable

television systems” under the plain language of the Act when

they are used to provide Internet access services to the public.

The Commission places heavy emphasis on the fact that

section 224(a)(4) defines “pole attachment” as “any

attachment by a cable television system or provider of

telecommunications service. . . .”". Commission Petition at 12

(emphasis in original). The Commission’s emphasis on the

word “any” is not by itself inappropriate, but that emphasis

overlooks the need to scrutinize carefully the definition of the

term “cable television system.” That term is not defined in

the Act, but it is defined in the Commission’s regulations. 47

C.F.R. § 76.5(a) sets forth the same definition for both “cable

system” and “cable television system.” That regulation reads

in relevant part as follows:

(a) Cable system or cable television system. A facility

consisting of a set of closed transmission paths and

associated signal generation, reception, and control

equipment that is designed to provide cable service

which includes video programming and which is

provided to multiple subscribers within a community,

but such term does not include: ...

(3) A facility of a common carrier which is subject, in

whole or in part, to the provisions of Title Il of the

Communications Act of 1934, as amended, except that

such facility shall be considered a cable system to the

extent such facility is used in the transmission of video

programming directly to subscribers, unless the extent

of such use is solely to provide interactive on-demand

services.

47 C.F.R. § 76.5(a) (emphasis added).”

For three reasons, all major cable companies are in fact

common carriers “subject, in whole or in part,” to Title II of

the Communications Act, and their systems are thus not

“cable television systems” except to the extent that they are

used to transmit video programming.'’ First, in City of

Dallas, Texas v. F.C.C., 165 F.3d 341 (Sth Cir. 1999), on

remand 14 F.C.C.R. 19700, the NCTA mounted a successful

challenge to a Commission order regarding open video

systems on the grounds that the Commission arbitrarily

differentiated between traditional local exchange carriers

(“LECs”) and cable-based LECs. NCTA’s position was

necessarily premised on the fact that cable companies are

LECs,. /d. at 353-354. All LECs are undoubtedly covered by

Title Il of the Act. See, e.g., 47 U.S.C. § 251(b). Second, as

EarthLink discusses in greater detail below, cable companies are

* The Commission must, of course, follow its own regulations. Morton

v. Ruiz, 415 U.S. 199, 235 (1974). With the exception of a deleted

parenthetical that is not here relevant, the Commission's regulatory

definition of “cable system” and “cable television system” is verbatim the

definition provided by the Act for “cable system.” 47 U.S.C. §§ 153(8),

522(7). That the two terms are synonymous is also demonstrated by the

second sentence of section 224(d)(3), which uses the term “cable system”

instead of “cable television system.”

'’ The Act defines “video programming” as “programming provided

by, or generally considered comparable to programming provided by, a

television broadcast station.” 47 U.S.C. § 522(20). It is self-evident that

Internet access does not fit that definition, and the Commission has so

ruled. /n the Matter of Internet Ventures, Inc. and Internet On-Ramp, Inc.

Petition for Declaratory Ruling, Memorandum Opinion and Order, 15

F.C.C.R. 3247, 3253-54 (2000).

telecommunications carriers subject to Title Il of the Act

because they are providing to the public for a fee the

transmission (“telecommunications”) necessary to deliver the

very Internet access services here at issue. 47 U.S.C.

§§ 153(20) and 153(46). Third, petitioner NCTA flatly told

the Commission that its members provide telecommu-

nications services: “NCTA’s members also utilize poles,

conduits and rights of way to deliver telecommunications

services.” In the Matter of Implementation of Section 703(¢)

of the Telecommunications Act of 1996, CS Docket No. 97-

151, Comments of NCTA at | (Sept. 26, 1997).

Because cable companies use the same facilities'' to

provide both cable services and telecommunications services

that are subject to Title II of the Act, their systems fall within

the 47 C.F.R. § 76.5(a)(3) exclusion from the definition of

“cable television system” to the extent that they are used to

provide any service other than video programming.

Accordingly, the pole attachments at issue cannot be

regulated as attachments made by a “cable television system”

and must be regulated as attachments made by “providers of

telecommunications services,” i.e. “telecommunications

carriers.” 47 U.S.C. § 153(44) (* ‘telecommunications

carrier’ means any provider of telecommunications

services”). This analysis by itself entirely disposes of the

Commission’s argument that sections 224(a)(4) and 224(b)(1)

provide it with authority to regulate the rates for the pole

attachments at issue here, because the Commission’s Order is

premised entirely on the incorrect assumption that the

Commission is dealing with “cable television systems.”

'' See Commission Petition at 13 (“Cable television service and

Internet access are routed through the same pole attachments—indeed,

through the same wires at the same time.”).

'2 See Commission Appendix at 90a. In Texas Utilities Electric Co. v.

F.C.C., 997 F.2d 925 (D.C. Cir. 1993), a case relied upon heavily by

petitioners, the court rejected an argument that the Commission's then-

C. The Pole Attachments At Issue Are Used To

Provide A Telecommunications Service Under the

Plain Language of the Statute and the Com-

mission’s Longstanding Precedent.

The Commission in its Order simply chose not to address

whether the pole attachments at issue are used to provide

telecommunications services. The Eleventh Circuit began that

analysis, but stopped too soon. The court of appeals correctly

noted that Internet access is an information service, not a

telecommunications service. Gulf Power, 208 F.3d at 1277,

1278; Commission Appendix at 30a-3la. As EarthLink

demonstrates below, however, the finding that Internet access

is an information service compels rather than defeats the

conclusion that pole attachments used in the delivery of

Internet access services to the public are used to provide

telecommunications services.

existing regulatory definition of “cable television system” excluded

coverage under section 224 for pole attachments by cable companies used

for services other than “cable services.” The court’s rejection of that

argument was based primarily on the notion that it did not believe that

Congress intended to limit cable companies’ pole attachment rights only

to those attachments used to provide traditional video programming. /d.

at 931. That concern has been obviated by the 1996 amendments, under

which section 224 now provides mandatory pole attachment rights and

regulated rates for “pole attachments used by telecommunications carriers

to provide telecommunications services... .” 47 U.S.C. §§ 224(e) and

224(f). Inasmuch as it is the use of a cable facility to provide

telecommunications services (which are regulated under Title II of the

Act) that triggers the exclusion found at 47 C.F.R. § 76.5, the section 224

coverage of pole attachments used to provide telecommunications services

ensures that the exclusion creates no gap in the section 224 authority.

Moreover, whereas the definition of “cable system,” which the

Commission has defined as meaning the same thing as “cable television

system,” applied prior to the passage of the Telecommunications Act of

1996 only to Title VI of the Act (see Commission Appendix at 83a), the

definition of “cable system” now expressly applies to the entire Act. 47

U.S.C. § 153(8).

The error in the lower court’s analysis is that it failed to

distinguish between the information processing functions that

make Internet access service an “information service” under

the Act and the transmission functions through which the

information service is delivered to consumers. It is the

transmission function (“telecommunications service”) for

which pole attachments are required, and it is that function,

not the information processing function, that defines the uses

to which pole attachments are put. The Ninth Circuit in AT&T

Corp. v. City of Portland, 216 F.3d 871 (9th Cir. 2000),

succinctly described the distinction between the information

service and telecommunications service functions that are

combined to provide Internet access:

Like other ISPs, @Home consists of two elements: a

“pipeline” (cable broadband instead of telephone lines),

and the Internet service transmitted through that

pipeline. However, unlike other ISPs, @Home controls

all of the transmission facilities between its subscribers

and the Internet. To the extent @Home is a conventional

ISP, its activities are that of an information service.

However, to the extent that @Home provides its

subscribers Internet transmission over its cable

broadband facility, it is providing a telecommunications

service as defined in the Communications Act.

Id. at 878.

Before addressing in depth why the offering of Internet

access service to the public necessarily includes the offering

of a telecommunications service, EarthLink notes that the

“commingling” of telecommunications services with other

services has no impact on the proper pole attachment rate.

Specifically, once it is determined that a pole attachment is

used to provide a telecommunications service (see sections

C.1 and C.2, infra), the section 224(e) rate applies to that

'3 See Commission Reply to Brief in Opposition at 3.

attachment regardless of what other services may be offered

using the same attachment. The Commission Stated:

“Separately, Section 224(e)(1), the subject of this Order,

governs rates for pole attachments used in the provision of

telecommunications service, including single attachments

used jointly to provide both cable and telecommunications

service.” Commission Appendix at 64a-65a. That section

224(e)(1) applies to cable operators is reinforced by the

Commission’s regulations, which state: “Cable operators

must notify pole owners upon offering telecommunications

services.” 47 C.F.R. § 1.1403(e).

In this regard, section 224(e), unlike section 224(d)(3),

does not contain the word “solely.” The section 224(e)

rate applies to any attachment that a provider of

telecommunications uses to provide a telecommunications

service. 47 U.S.C. § 224(a)(4). Accordingly, it is irrelevant

for the purposes of applying section 224(e) that a

telecommunications service is in turn used to deliver a

separate service, such as Internet access. The Commission,

and apparently all of the parties, agreed on this point in the

Commission’s proceeding below:

We also agree with cable operators, telecommunications

carriers, and utility pole owners that, if an attachment

previously used for providing solely cable services

would, as a result of the leasing of dark fiber, also be

used for providing telecommunications services, the rate

for the attachment would be determined under Section

224(e), consistent with our discussion regarding

restrictions on service provided over pole attachments.

Commission Appendix at 1 18a-119a (footnotes omitted). The

Commission’s conclusion that an attachment previously used

“solely to provide cable service” is governed by section

224(e) once that attachment is also used to provide a

telecommunications service has not been challenged by any

party.“

Having established that the section 224(e) rate applies in

every case in which a pole attachment is used in the provision

of a telecommunications service (whether alone or in

combination with another service), EarthLink next

demonstrates why, under the plain language of the Act and

twenty years of Commission precedent, there is necessarily a

telecommunications service being offered in each instance in

which an Internet access service is offered to the public for a

fee. We begin with the statutory language, followed by a

discussion of the Commission’s orders applying that

language.

1. The Communications Act Analysis

The first step in the analysis set forth below renders the

result that Internet access is itself an “information service.”

The second step, which requires nothing more than a plain

reading of the definition of “information service,”

demonstrates that information services are provided “via

telecommunications.” 47 U.S.C. § 153(20). The third step

asks whether the telecommunications over which the

information service is provided is offered “for a fee directly

to the public or to such classes of users as to be effectively

available directly to the public” so as to fall within the

'4 In an earlier, related pole attachment proceeding, the Commission

said:

The 1996 Act also created a distinction between pole attachments

used by cable operators solely to provide cable service and pole

attachments used by cable operators or by any telecommunication|s]

carrier to provide any telecommunications service. The Act

prescribed a new methodology for determining pole attachment

rates for the latter group.

In the Matter of Implementation of Section 703 of the Telecommunications

Act of 1996, 11 F.C.C.R. 9541, 9544 (1996).

definition of “telecommunications services,” 47 U.S.C.

§ 153(46), and thus within the scope of section 224(e).

a. Internet Access Service Is Itself An “Infor-

mation Service.”

The Act states that:

The term “information service” means the offering

of a capability for generating, acquiring, storing,

transforming, processing, retrieving, utilizing, or making

available information via telecommunications, and

includes electronic publishing, but does not include any

use of any such capability for the management, control,

or operation of a telecommunications system or the

management of a telecommunications service.

47 U.S.C. § 153(20). The “offering of a capability for

generating, acquiring, storing, transforming, processing,

retrieving, utilizing, or making available information”

describes precisely the characteristics of Internet access

service and the purposes for which consumers use that

service.'> The Commission has recognized this and has held

that “Internet access” is an information service:

In order to provide those components of Internet access

services that involve information transport, ISPs lease

lines, and otherwise acquire telecommunications, from

telecommunications providers—LECs, CLECs, IXCs, and

others. ... Thus, the information service is provisioned

by the ISP “via telecommunications” including

interexchange communications although the Internet

service itself is an “information service” under section

'° See In The Matter Of Federal-State Joint Board on Universal

Service, Report To Congress, 13 F.C.C.R. 11501, 11540 n.165 (1998)

(hereinafter “Universal Service Report to C ongress”) (“the very core of

the Internet and its associated services is the ability to ‘retrieve’ and

‘utilize’ information”).

3(20) of the Act, rather than a telecommunications

service.

In the Matter of Deployment of Wireline Services Offering

Advanced Telecommunications Capability, Order on Remand,

15 F.C.C.R. 385, 401 (Dec. 23, 1999) (emphasis added)."°

b. Information Services Such As Internet Access

Are Delivered Via Telecommunications.

The Act states that “information service means the offering

of a capability for generating, acquiring . . ., OF making

available information via telecommunications. . . .” 47 U.S.C.

§ 153(20) (emphasis added). Accordingly, because Internet

access service is an information service, it is clear from the

statute that Internet access service is provided “via

telecommunications.” /d.

c. The Telecommunications Used To Deliver The

Information Service Known As Internet Access

Is Offered To The Public For A Fee And Is

Thus A Telecommunications Service.

That Internet access is an information service provided “via

telecommunications” does not by itself answer the question of

whether the telecommunications used to provide Internet

access is an “information service”:

The provision of Internet access service involves data transport

elements: an Internet access provider must enable the movement of

information between customers’ own computers and the distant

computers with which those customers seek to interact. But the

provision of Internet access service crucially involves information

processing elements as well; it offers end users information-service

capabilities inextricably intertwined with data transport. As such,

we conclude that it is appropriately classed as an “information

service.”

Universal Service Report to Congress, 13 F.C.C.R. at 11540 (footnote

omitted) (emphasis added).

access is a “telecommunications service,” a term that the Act

defines separately from “telecommunications.” The Act

defines “telecommunications service” as “the offering of

telecommunications for a fee directly to the public, or to such

classes of users as to be effectively available directly to the

public, regardless of the facilities used.” 47 U.S.C. § 153(46).

In order to determine whether the offering of Internet access

service (an information service) includes the offering of a

“telecommunications service,” it is necessary under the third

step of the analysis outlined above to determine whether the

“telecommunications” that the Act states is used to provide

the “information service” known as Internet access is being

offered “for a fee directly to the public.” /d.

Petitioner NCTA has answered that question in the

affirmative for the cable companies. NCTA’s petition for

certiorari conclusively establishes that the cable industry is

holding itself out to a large segment of the public as a

provider of Internet access:

Recent technological advances have allowed cable

operators, who have invested billions of dollars in the

effort, to upgrade further their existing coaxial cables

and other equipment so that they can simultaneously

carry both traditional video programming services and

high-speed or “broadband” Internet access at data

transmission speeds hundreds of times faster than the

“narrowband” services available through traditional

telephone lines. The cable industry thus actively

competes against numerous segments of the commu-

nications industry to provide high-speed Internet

services to consumers nationwide.

NCTA Petition for a Writ of Certiorari at 4 (emphasis added).

The NCTA in its petition also cites to a Commission report

that found as of October 30, 2000, the cable industry provided

approximately 2.2 million high speed lines connecting

consumers to the Internet. NCTA Petition at 5. Under any

recognizable definition of the “public,” the cable industry is

providing Internet access—and thus necessarily the

“telecommunications” over which Internet access rides—to

the public.'’

The remaining question that must be answered in order to

determine if the telecommunications offered by cable

companies that provide Internet access to the public is a

“telecommunications service” is whether such companies

offer that telecommunications “for a fee.” 47 U.S.C.

§ 153(46). Common sense and simple economics dictate that

cable companies are not giving away Internet access or the

telecommunications over which Internet access is delivered,

and EarthLink does not expect any cable company to argue

that it is doing so. Public advertising and information

distributed by cable companies that offer Internet access

service confirm that customers must pay for the service. For

example, the web sites of major cable operators such as Cox,

Comcast, and AT&T all describe standard rate options for

various cable-based Internet access services. These

companies’ rates can be viewed electronically at,

'’ The classic test for determining whether a telecommunications

provider is a “common carrier” for purposes of the Communications Act

is set forth in National Association of Regulatory Utility Commissioners v.

F.CC.. 525 F.2d 630 (D.C. Cir. 1976), cert. den’d 425 U.S. 992

(“NARUC I”). Under the NARUC / test, which provides that service

providers are common carriers if they hold themselves out

indiscriminately to serve the public, it is not necessary that “a given

carrier’s services must practically be available to the entire public.”

Instead, “one must hold oneself out indiscriminately to the clientele one is

suited to serve... .” /d. at 641. Under the figures cited by the NCTA, this

test is clearly met. The D.C. Circuit recently upheld a Commission ruling

that the NARUC / test is applicable to determine when a carrier is a

“telecommunications carrier” (i.e., a “provider of telecommunications

services,” 47 U.S.C. § 153(44)) under the Communications Act, as

amended by the Telecommunications Act of 1996. Virgin Islands

Telephone Corp. v. F.C.C., 198 F.3d 921, 926 (D.C. Cir. 1999).

www.athome.att.com. Cable companies that provide Internet

access and its necessary telecommunications component thus

meet the final test for providing “telecommunications

service,” namely, that the service is offered “for a fee.”

47 U.S.C. § 153(46). Accordingly, the section 224(e) rate

must apply.

In other fora, members of NCTA have Suggested that the

fact that end users are charged a single fee for Internet access

means that no fee is charged for the telecommunications

component of that service, and that the cable company is

therefore not providing telecommunications to the public for

a fee. The Commission has consistently rejected the argument

that charging a single fee for the combined offering of an

information service and the telecommunications service over

which it rides means that no fee is charged for the

telecommunications component: “As we have stated basic

services form one component of the charges for enhanced

services—the remaining components of which are available

from the competitive resources and capabilities of the data

processing industry.”'* Jn the Matter of Amendment of

Section 64.702 of the Commission's Rules and Regulations

(Second Computer Inquiry), Final Decision, 77 F.C.C.2d 384,

435 (1980) (emphasis added) (hereinafter “C omputer IT”). See

also In the Matter of Federal-State Joint Board on Universal

Service, Fourth Report and Order On Reconsideration, 13

F.C.C.R. 5318, 5474 (1997) (“We disagree with ITAA’s

contention that, because systems integrators provide both

basic telecommunications services as well as enhanced

services for a single price, systems integrators are engaged

exclusively in the provision of enhanced information

services.”); see also In the Matter of Policy and Rules

Concerning the Interstate, Interexchange Marketplace,

Report and Order, CC Docket Nos. 96-61, 98-183, 940

'* “Basic services” are “telecommunications services.” See n. 19 infra.

(March 30, 2001) (reaffirming that carriers that provide

packages of telecommunications and enhanced services at a

single price must make transmission capacity available

separately).

Thus, under the plain language of the statute and the facts

as presented by petitioner NCTA, the pole attachments here at

issue are used to provide “telecommunications service.” Pole

attachments for those services are therefore regulated under

section 224(e) of the Act.

2. Twenty Years Of Commission Precedent Holds

That Information Services Offered To The

Public Are Always Delivered Using A Telecom-

munications Service.

The conclusion from the plain language of the Act that the

offering of Internet access services to the public for a fee

necessarily includes the offering of a telecommunications

service is supported by twenty years of Commission

precedent.

Since its decision in Computer II], the Commission has

consistently held that every information service that is offered

to the public is delivered by a common carrier transmission

service (i.e., a “telecommunications service”). See 47 U.S.C.

§ 153(44)(“A telecommunications carrier shall be treated as a

common carrier under this Act only to the extent that it is

providing telecommunications services. . . .”).

In Computer II, the Commission established a regulatory

regime that created a distinction between so-called

“enhanced” computer processing services and “basic”

transmission services. Under the basic/enhanced distinction

of Computer II, the Commission chose to regulate “basic

service” as a common carrier offering, but decided as a

general matter to exempt from common carrier regulation

“enhanced services” provided using those basic services.

Computer II, 77 F.C.C.2d at 418-19, 423. After the passage of

the Telecommunications Act of 1996, the Commission

reaffirmed its Computer II holding and restated its Computer

II order in the language of the amended Act, replacing the

term “basic service” with “telecommunications service” and

the term “enhanced service” with “information service.” !?

The Commission described the distinction and the

relationship between enhanced services and basic services

this way in Computer IT:

[AJn essential thrust of this proceeding has been to

provide a mechanism whereby non-discriminatory

access can be had to basic transmission services by all

enhanced service providers. Because enhanced services

are dependent upon the common carrier offering of

basic service, a basic service is the building block upon

which enhanced services are offered.

The Commission reported the following to Congress:

Reading the statute closely, with attention to the legislative history,

we conclude that Congress intended these new terms to build upon

frameworks established prior to the passage of the 1996 Act.

Specifically, we find that Congress intended the categories of

“telecommunications service’ and “information service” to

parallel the definitions of “basic service” and “enhanced service”

developed in our Computer Il proceeding, and the definitions of

“telecommunications” and “information service” developed in the

Modification of Final Judgment breaking up the Bell system.

Universal Service Report To Congress, 13 F.C.C.R. at 11511 (emphasis

added). In a proceeding begun prior to that report, the Commission sought

comment on its general conclusion that “basic service” and

“telecommunications service” are the same. In the Matter of C omputer [11

Further Remand Proceedings: Bell Operating C ompany Provision of

Enhanced Services, 13 F.C.C.R. 6040, 6066-67 (1998). The Commission

has recently asked parties to refresh the record in that proceeding. See

Update and Refresh Record on Computer Ill Requirements, 66 Fed. Reg.

15064 (2001).

Id. at 475 (emphasis added). Under this framework, which the

Commission has determined Congress adopted in the

Telecommunications Act of 1996,” it is possible for a

telecommunications service to exist without an information

service, but it is logically, technically, and legally impossible

for an information service that is offered to the public for a

fee to exist without an underlying telecommunications

service. Quite simply, the only way that an information

service can reach the public is over a telecommunications

service. Moreover, the Commission has made it clear that the

fact that a telecommunications service is used to provide an

information service does not in any way change the statutory

classification of the telecommunications service:

Bell Atlantic seems to reason that because enhanced

services are not common carrier services under Title II,

the basic services that underlie enhanced services are

somehow also not subject to Title Il. We do not agree.

Enhanced services by definition are services “offered

over common carrier transmission facilities.” Since the

Computer II regime, we have consistently held that the

addition of the specified types of enhancements (as

defined in our rules) to a basic service neither changes

the nature of the underlying basic service when offered

by a common carrier nor alters the carrier’s tariffing

obligations, whether federal or state, with respect to that

service.

Filing and Review of Open Network Architecture Plans, 4

F.C.C.R. 1, 141 (1988) (brackets in original) (emphasis

added).

More recently, the Commission reiterated the principle that

the fact that a telecommunications service is used to deliver

an information service (specifically, Internet access) in no

” See note 19, supra.

: 25

way changes the nature of the underlying telecommunications

service:

[C]arriers which offer basic interstate telecommunica-

tions functionality to end users (such as ISP subscribers)

are “telecommunications carriers” covered by the

relevant provisions of section 251 and 254 of the Act

“regardless of the underlying technology those service

providers employ, and regardless of the applications

that ride on top of their services.” In other words, even

though the access provided to the ISP by the local

exchange carrier facilitates the delivery of an

information service because of the “applications that ride

on top” of the telecommunications service, that same

access necessarily facilitates the origination of the

underlying telephone toll service used to transport the

ISP’s Internet access service.

In the Matter of Deployment of Wireline Services Offering

Advanced Telecommunications Capability, Order on Remand,

15 F.C.C.R. 385, 402-03 (1999) (italics in original).

The authorities cited above make it clear that the fact that

an ISP uses telecommunications services obtained from a

separate carrier does not change the statutory classification of

the telecommunications service. That this is the case is

underscored by the fact that the Commission did not even

discuss in its Order the possibility that a telecommunications

carrier whose customers include ISPs or ISP subscribers

would somehow lose its pole attachment rights or pay

anything other than the section 224(e) rate for attachments so

employed.

It is similarly clear that the statutory classification of a

telecommunications service used to provide an information

service does not change when a telecommunications carrier

uses its own transmission facilities to provide that

information service. The Commission addressed precisely

this issue in 1995:

Thus, having applied Commission Rules and found that

Frame Relay Service is a basic service, we conclude

that, pursuant to the Computer II decision, all facilities-

based common carriers providing enhanced services in

conjunction with basic frame relay service must file

tariffs for the underlying frame relay service and acquire

that tariffed service in the same manner as resale

carriers.

In the Matter of Independent Data Communications

Manufacturers’ Association, Inc., Petition for Declaratory

Ruling That AT&T's Frame Relay Service Is A Basic Service,

Memorandum Opinion and Order, 10 F.C.C.R. 13171, 13725

(1995) (emphasis added) (hereinafter “Frame Relay Order’),