Supreme Court settles Internet dispute, allows FCC to control some infrastructure rates

Wednesday, January 16th 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ In a victory for the cable industry, the Supreme Court said Wednesday that a federal agency can control rates that cable companies pay for high-speed Internet lines. The ruling could affect the availability and cost of online services.

Cable television companies pay utilities to attach wires for high-speed Internet service to the utilities' poles.

A federal appeals panel ruled last year that the Federal Communications Commission did not have the authority to regulate pole rental rates for Internet service. The Supreme Court reversed that decision.

Justices also said cellular telephone companies are entitled to pay government-limited rates for attaching their equipment to utility poles.

Justice Clarence Thomas, joined by Justice David H. Souter, dissented in part of the ruling. Thomas said the FCC should be required to explain its rationale for regulating rates.

``Such a determination would require the commission to decide at long last whether high-speed Internet access provided through cable wires constitutes cable service or telecommunications service or falls into neither category,'' Thomas wrote.

The case is one of three the court is considering this year involving a 1996 congressional overhaul of the nation's telecommunications laws.

Justice Anthony M. Kennedy, writing for the majority, said electric utilities wrongly argued in this case that ``if a cable company attempts to innovate at all and provide anything other than pure television, it loses the protection of the Pole Attachments Act and subjects itself to monopoly pricing.''

Kennedy said Congress in 1996 intended to promote expanded Internet service, not discourage it.

With government regulation of the rates, the cable industry paid about $5 a pole annually to string and operate its wires, according to the National Cable and Telecommunications Association. After the 11th U.S. Circuit Court of Appeals ruling, one utility began charging $38 a pole, the association had said.

Justice Sandra Day O'Connor did not participate in the decision. She has stock in companies that could be affected by the court's ruling, including telephone companies AT&T and MCI, and several computer or Internet firms.

The cases are National Cable Television Association v. Gulf Power Co., 00-832, and Federal Communications Commission v. Gulf Power Co., 00-843.