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Supremes to Hear Brand X, Grokster on Same Day

Mark your calendars for March 29.

The Supreme Court Wednesday announced that it will hear both of the media industry’s big court cases on the same day.

One will decide whether cable operators must carry rival ISPs over their broadband networks. The other will determine whether file-sharing networks like Grokster and StreamCast Networks Inc. can be held liable for copyright violations when individuals use their software to illegally copy content.

In the cable access case, the Bush Administration late Tuesday asked the Supreme Court to uphold the FCC’s authority to decide whether access rules for cable Internet are necessary.

Justice Department attorneys told the justices that previous high court rulings already give the FCC wide power to interpret ambiguous passages of the 1996 Telecommunications Act. “As this court has recognized, Congress was well aware that the ambiguities it chose to produce in drafting the 1996 act” would be resolved by the FCC, Justice Department attorneys told the Supreme Court in opening briefs due Tuesday.

At issue is a 2002 FCC decision not to impose telephone-style access rules on cable modem service. If it had, that would have obligated cable operators to carry rival ISPs on their broadband networks.

Rather than classify cable Internet service as a “telecommunications service” bound by the same rules as Bell telephone monopolies, the FCC declared cable broadband was an “information service.”

The FCC says its classification gives the agency the right, but not the obligation to order open access for cable Internet.

Imposing a mandate now would discourage cable operators from rolling out broadband service, the FCC has argued, one of the priorities of the Michael Powell-led commission.

The fight over cable Internet access has pitted the cable industry against ISPs like Earthlink and media activists in a series of legal battles since 1998.

In the last round, a 2003 decision, the federal appeals court in San Francisco struck a blow against operators by ruling that cable Internet service is bound by the same access burdens as telephone companies. The FCC and the cable industry disagree, saying there’s no obligation to file a telephone-style mandate and the commission may wait and see if an access mandate is warranted by, say, blocking of content on rival web sites by cable operators.

Long-standing court doctrine requires judges to defer to “expert federal agencies” like the FCC when they implement statutes that don’t provide clear direction on all legal questions. That so-called Chevron doctrine, named for the plaintiff in the court decision establishing the doctrine, requires courts to defer to federal agencies if the law being administered is unclear and the agency’s interpretation is reasonable.

The main question before the justices is whether the FCC’s “hands-off for now” classification of cable Internet services is reasonable. The Justice attorneys complained that the San Francisco court wrongly “refused” to determine whether the FCC was due the traditional deference in the cable modem case.

The National Cable & Telecommunications Association also submitted its legal brief supporting the FCC Tuesday. The Telecommunications Industry Association, which represents Media activists and ISPs, must file briefs in support of the lower court ruling Feb. 22.

In the file-sharing case, the justices must decide whether to uphold a lower court’s decision ruling that Grokster and StreamCast are not liable for copyright infringement because they don't maintain centralized indexes of files available for sharing.

Grokster and StreamCast systems disburse indexes among users' privately owned computers. The lower court ruling in this case, also by the San Francisco federal appeals court, held that the disbursed indexing was enough to insulate the networks from legal challenges that brought down Napster, another peer-to-peer network.