October 9, 2003  ·  Lessig

On Monday, the 9th Circuit decided that the FCC was wrong in classifying a “cable modem service” as an “information service,” and thus exempting it from any common-carrier-like obligations. This is a very important decision in the ongoing battles about preserving end-to-end neutrality on the Net.

But meanwhile, there’s a very tricky game being played with the Internet Tax Freedom Act which might make the whole 9th Circuit issue moot. Someone has slipped a nice little change into that statute that potentially could exempt any broadband service from any common carrier obligations. The legislative history is being puffed up to say this won’t be the effect. But the language of the change has many concerned (and no doubt some filled with glee) that this fundamental policy issue will be decided by a slip of the hand in a totally unrelated bill. As one critic writes,

If Congress adopts the bill in its current form and it becomes law, it will be cited as “evidence” that it was Congress’ intent to treat the transmission services used to provide Internet access differently than those transmission services not used for Internet access, and more precisely that Congress intends the underlying transmission service to be treated the same as the Internet access service. (not subject to Title II in the DSL and cable modem proceedings) Moreover, it will be used to argue that Congress supports the FCC’s revisionist “telecommunications is subsumed into information services” approach that serves as the basis of the FCC’s cable modem and wireline DSL proceedings.

The bills are HR 49 and S 150.

  • Danny Sepulveda

    S.150 passed the Commerce Committee by voice vote. It deals strictly with the treatment of broadband access for tax purposes and does not intend to speak on the regulatory issues related to common carrier obligations. If it had, then the Committee would have split on the issue the way it did on Tauzin-Dingell proposals and the Breaux-Nickels proposal from last year. It did not. The Committee is now working to ensure the language in S.150 is as clear as possible on this matter. Thanks.

  • http://www.alliancecm.org Bunnie Riedel

    Larry is nearly right.
    And Dan is obviously either on Wyden’s payroll or Allen’s or the entire telecom/cable industry’s payroll.

    S. 150, as examined by the Governor’s Association, the National League of Cities, the Conference of Mayors, the Inter-State Tax Coalition, The National Association of Telecommunications Officers and Advisors and the National Association of Regulatory Officers and Commissioners and the Alliance for Community Media…among others…has determined that S. 150 is so broad it could even affect state and local municipal govs ability to collect property taxes! Carol Grunberg, Wyden (OR) author of the language has been very stubborn about just adding clarifying language…well what’s so wrong with that? If the bill says all that she and Dan say it does, what’s wrong with a bit more clarfication? NADA.

    Gee, does Carol have a promising career in telecom?
    Or is Wyden getting enough from his telecom friends? Shame on a public interest Dem if that is the case.

    Anyhoo…states and local governments will immediately get a $9 Billion cut…and you and I, as property tax payers will make up the dif. So much for the end of corporate welfare as we know it. Hey! Comcast needs the bucks!

    Here, ultimately is the point…do you get cable modem through a cable line? Yeah. Do you get video through a cable line? Yeah. Will you someday get telephony through your cable line? Yeah. The cable cord that runs up your street, runs down your driveway (maybe even to your neighbors house like mine does?), through your backyard?

    Then how is it that “cable modem” is not a “cable service?” Even though ALL the cable ops swore it was to the FCC in 1999 and 2000?

    So should they pay the local municipality “fair rent” on that profit? Well I say so!! A man puts up a hot-dog stand on my front yard, I might want a “fair rent,” a “franchise” which includes percentage of his profit.

    Cable modem is cable service. In the same way it looks like a duck, it squaks like a duck, it walks like a duck and it IS a duck!

    Go to our website at http://www.alliancecm.org and use our Legislative Action Center to send a letter to your Senator…tell him/her “NO!” on S. 150.. No on Corporate Welfare for Telecom and Cable!

    Bunnie Riedel
    Executive Director
    Alliance for Community Media

  • http://www.batteryfast.com tom

    […] On the substantive side, a few legislators got to ask the cable people serious questions. Points for substance go to Garrison (D-Marietta), Stewart (R-Athens), Okey (D-Carrollton), Barrett (D-Amherst), and Foley and Williams (D-Cleveland). […]