The cable industry and the FCC are asking the Supreme Court to prevent utility companies from "jacking up" industry costs as local cable systems roll out broadband services.
The case also could have a major impact on cable's fight against open-access rules that would give competing Internet providers access to their broadband networks.
The nation's highest court has been asked to overturn a decision by the federal appeals court in Atlanta that could greatly increase the rates utilities are allowed to charge when cable companies attach their lines to power poles.
In April, the Atlanta court said that FCC price caps do not apply when cable companies add high-speed Internet services to traditional cable services. The issue is critical to cable systems across the country because they are rapidly expanding their infrastructure in order to lure Internet subscribers.
Since the Atlanta court's ruling, several utility companies have announced dramatic rate increases-from as low as $5 a month per pole to almost $40-although they are barred from collecting the higher fees until the Supreme Court appeal is decided.
Overturning the ruling "is critical to the development and availability of high-speed Internet services," the NCTA said in its petition to the Supreme Court.
Utility-company officials counter that the new rates would be in line with what other companies pay for pole attachment.
The Atlanta court said cable-modem service is an "information service" not under the jurisdiction of the FCC. As a consequence, the federal government's complex formula for capping pole costs does not apply when cable companies "co-mingle" traditional TV service with broadband.
But the FCC and the NCTA said that conclusion would contradict Congress, which ordered the FCC to foster the development of advanced services, such as cable broadband, as part of the 1996 Telecommunications Act.
"It strains credulity to suggest that Congress intended to limit the commission's authority and thereby penalize cable entities that choose to expand their services," the NCTA said.
The Supreme Court's decision to take the case also could shape the debate over Internet-service providers' access to cable carriage. That could happen if the justices decide which regulatory scheme cable-Internet services fall under. If the court's decision goes that far, it would resolve conflicting rulings from the Atlanta bench and federal courts in San Francisco and Richmond about cable-Internet service under government control.
The FCC, which is currently reviewing the issue as part of its open-access rulemaking, wants to decide and is asking the court not to go that far.
It is unclear whether the Supreme Court will decide whether to take up the FCC/NCTA appeal for this year's term. The opposing side, led by Pensacola, Fla.-based Gulf Power, must submit its written rebuttal to the court by Dec. 27, and it's unclear whether that will leave enough time for justices to review and add the case to its next term, which lasts from June to October 2001.