Press Release
Free Press responds to Supreme Court rulings in <I>Brand X</I> and <I>Grokster</I> cases
Contact: Timothy Karr, 201-533-8838
WASHINGTON -- The Supreme Court today ruled on two critical cases, NCTA v. Brand X and MGM v. Grokster, both of which could have a profound impact on future of the Internet. Free Press joined amici curiae briefs in both cases.
Ben Scott, policy director of Free Press, issued the following statement:
The Supreme Court handed down two rulings today that will have a tremendous impact on the future of the Internet. The Brand X decision will badly weaken the foundation of the Internet as an open marketplace for new ideas, competitive services, and the free flow of information. The Grokster case upholds the protection of technologies from secondary liability in copyright infringement, even as it rules against the peer-to-peer company.
The 6-to-3 decision in the Brand X case will likely change the face of the Internet as we know it. The Court ruled that the FCC's interpretation of the Communications Act was lawful, upholding the agency's long-contested decision to exempt cable modem service from the common carrier regulations that apply to its major competitor, the telephone companies.
The response of the telephone giants that control the DSL market will no doubt be to rush to the FCC and the Congress to demand their own exemption from open access regulations. If they are successful, the Brand X case will stand as the trigger that reversed a century of communications policy and undermined the bedrock principle of democratic media -- nondiscriminatory access for all.
Every major technology in the history of this nation designed to facilitate the transport of goods, services and information has operated as a common carrier network. The railroads, the highway system, the telegraph, the telephone, and the Internet all have followed this principle. Now we are told that this tremendously successful system will be overturned because the FCC was within its rights in an arcane definitional ruling.
The FCC's decision was awash in lobbying dollars from the affected industries that had little media scrutiny at the time and absolutely zero public involvement. The FCC's distinction between "information service" and "telecommunications service" to describe precisely the same bit-streams of ones and zeros boggles the imagination.
Justice Scalia, who rarely collects accolades from the public interest community, got it right this time in his dissenting opinion. "After all is said and done," he wrote, "after all the regulatory cant has been translated, and the smoke of agency expertise blown away, it remains perfectly clear that someone who sells cable-modem service is 'offering' telecommunications."
The Brand X decision is not only absurd on its face, it is an insult to the American ideals of competitive markets, equal opportunity, and the free flow of information. This short-sighted decision to eliminate common carrier requirements on broadband networks essentially grants the incumbent cable giants the prerogative to stifle all competitive access to their wires. If the telephone companies receive similar exemptions -- as is expected -- the cozy duopoly of cable and DSL that controls more than 95 percent of the broadband market will be entrenched for a generation. There will be no competitive broadband carriers. There will be no independent ISPs. The thriving new market for Voice Over Internet Protocol (VOIP) may be badly destabilized. The owners of the wires will likely determine what content is and is not appropriate to travel over their networks.
Without guarantees of nondiscriminatory access, Internet services provided by anyone other than the incumbent wireline giants will be under threat. Not just the so-called last-mile connections into consumer households will be affected. The decision also impacts the "middle-mile" networks that connect our major cities. The booming market for wireless broadband depends upon these middle-mile pipes for backhaul connection to the wider Internet.
The hundreds of communities across the country that have built their own Community Internet services must also be interconnected. Common carriage rules guaranteed that competitive broadband providers serving rural areas and low-income urban neighborhoods would not become isolated islands. After Brand X, this guarantee will be replaced by the whims of the cable and telco cartels.
The response from the public and its representatives in Congress must be firm, swift and resolute. The open proceedings at the FCC dealing with nondiscrimination on wireline networks should become a focal point of attention for advocates of telecom policy in the public interest. Congress must seek to reverse the FCC's misguided judgment, re-establishing rules that protect open access to communications networks. Far from granting the phone companies the same exemptions, Congress should write an unambiguous statute guarding communications network from monopoly domination.
Finally, the hundreds of towns and cities across the country that have chosen to build their own Community Internet and municipal broadband projects should rise together in strong denunciation of the demise of common carriage. These new enterprises represent the true spirit of innovation, local ingenuity and competitive enterprise. These local networks offer the promise of bridging the digital divide and pursuing affordable broadband access for all Americans. We must not allow them to be held hostage by wireline monopolies emboldened to crush competition with disastrous public policy.
In the Grokster case, the monumental question of whether peer-to-peer network technologies themselves, rather the ways they are used, could be deemed an illegal inducement to commit copyright violation was punted into the future. The Court issued a narrow ruling against Grokster on the grounds that the company blatantly advertised the opportunity to use a peer-to-peer technology to break the law and profited from that specific venture.
The law has always made a careful distinction between regulating technologies and regulating the users of those technologies. This is no time to turn our backs on history. The critical point in this case is the Justices affirmation that technologies cannot be held liable for how consumers use them. Innovation must be permitted to thrive.
The lesson from both Brand X and Grokster is that Congress has an obligation to the people to protect the viability of an open Internet and to resist the temptations of the powerful to control how we access and use our common communications systems.
Ben Scott, policy director of Free Press, issued the following statement:
The Supreme Court handed down two rulings today that will have a tremendous impact on the future of the Internet. The Brand X decision will badly weaken the foundation of the Internet as an open marketplace for new ideas, competitive services, and the free flow of information. The Grokster case upholds the protection of technologies from secondary liability in copyright infringement, even as it rules against the peer-to-peer company.
The 6-to-3 decision in the Brand X case will likely change the face of the Internet as we know it. The Court ruled that the FCC's interpretation of the Communications Act was lawful, upholding the agency's long-contested decision to exempt cable modem service from the common carrier regulations that apply to its major competitor, the telephone companies.
The response of the telephone giants that control the DSL market will no doubt be to rush to the FCC and the Congress to demand their own exemption from open access regulations. If they are successful, the Brand X case will stand as the trigger that reversed a century of communications policy and undermined the bedrock principle of democratic media -- nondiscriminatory access for all.
Every major technology in the history of this nation designed to facilitate the transport of goods, services and information has operated as a common carrier network. The railroads, the highway system, the telegraph, the telephone, and the Internet all have followed this principle. Now we are told that this tremendously successful system will be overturned because the FCC was within its rights in an arcane definitional ruling.
The FCC's decision was awash in lobbying dollars from the affected industries that had little media scrutiny at the time and absolutely zero public involvement. The FCC's distinction between "information service" and "telecommunications service" to describe precisely the same bit-streams of ones and zeros boggles the imagination.
Justice Scalia, who rarely collects accolades from the public interest community, got it right this time in his dissenting opinion. "After all is said and done," he wrote, "after all the regulatory cant has been translated, and the smoke of agency expertise blown away, it remains perfectly clear that someone who sells cable-modem service is 'offering' telecommunications."
The Brand X decision is not only absurd on its face, it is an insult to the American ideals of competitive markets, equal opportunity, and the free flow of information. This short-sighted decision to eliminate common carrier requirements on broadband networks essentially grants the incumbent cable giants the prerogative to stifle all competitive access to their wires. If the telephone companies receive similar exemptions -- as is expected -- the cozy duopoly of cable and DSL that controls more than 95 percent of the broadband market will be entrenched for a generation. There will be no competitive broadband carriers. There will be no independent ISPs. The thriving new market for Voice Over Internet Protocol (VOIP) may be badly destabilized. The owners of the wires will likely determine what content is and is not appropriate to travel over their networks.
Without guarantees of nondiscriminatory access, Internet services provided by anyone other than the incumbent wireline giants will be under threat. Not just the so-called last-mile connections into consumer households will be affected. The decision also impacts the "middle-mile" networks that connect our major cities. The booming market for wireless broadband depends upon these middle-mile pipes for backhaul connection to the wider Internet.
The hundreds of communities across the country that have built their own Community Internet services must also be interconnected. Common carriage rules guaranteed that competitive broadband providers serving rural areas and low-income urban neighborhoods would not become isolated islands. After Brand X, this guarantee will be replaced by the whims of the cable and telco cartels.
The response from the public and its representatives in Congress must be firm, swift and resolute. The open proceedings at the FCC dealing with nondiscrimination on wireline networks should become a focal point of attention for advocates of telecom policy in the public interest. Congress must seek to reverse the FCC's misguided judgment, re-establishing rules that protect open access to communications networks. Far from granting the phone companies the same exemptions, Congress should write an unambiguous statute guarding communications network from monopoly domination.
Finally, the hundreds of towns and cities across the country that have chosen to build their own Community Internet and municipal broadband projects should rise together in strong denunciation of the demise of common carriage. These new enterprises represent the true spirit of innovation, local ingenuity and competitive enterprise. These local networks offer the promise of bridging the digital divide and pursuing affordable broadband access for all Americans. We must not allow them to be held hostage by wireline monopolies emboldened to crush competition with disastrous public policy.
In the Grokster case, the monumental question of whether peer-to-peer network technologies themselves, rather the ways they are used, could be deemed an illegal inducement to commit copyright violation was punted into the future. The Court issued a narrow ruling against Grokster on the grounds that the company blatantly advertised the opportunity to use a peer-to-peer technology to break the law and profited from that specific venture.
The law has always made a careful distinction between regulating technologies and regulating the users of those technologies. This is no time to turn our backs on history. The critical point in this case is the Justices affirmation that technologies cannot be held liable for how consumers use them. Innovation must be permitted to thrive.
The lesson from both Brand X and Grokster is that Congress has an obligation to the people to protect the viability of an open Internet and to resist the temptations of the powerful to control how we access and use our common communications systems.
