Is the Internet information, or is it telecommunications? Perhaps a strange question, but the answer is filled with such portent that the U.S. Supreme Court is deciding the answer. And the fallout has wide implications for cable system operators, Internet service providers, and even the telecom industry.
Brand-X Internet, a California-based ISP, wants cable Internet services, such as those provided by Comcast
Interestingly, the telecoms support the cable operators.
As broadband services such as DSL proliferate, the "baby Bell" companies like SBC Communications
Consumer groups, understandably, want open access. They argue that the cable companies -- and the telcos -- simply want to limit competition and thus charge more for their services. The network owners contend that telephone lines are a standalone product -- that they provide telecommunication services only -- while cable lines carry a bundled service and need a separate definition.
Part of the problem arises from the fact that cable operators have been granted a government-sanctioned monopoly. Though they will have competition from various wireless services, such as satellite or electric utilities like Cinergy
Or, more precisely, different regulations. Cable operators are content to live by the FCC's regulatory definition of their services as informational. The 9th Circuit Court of Appeals, however, said that a Washington state court ruling predates the FCC decision and that regulation is subservient to the law anyway. That's how this matter ended up before the Supreme Court: Cable operators appealed the decision.
The ultimate decision, expected by June, will have important consequences. But those consequences may become irrelevant if satellites, power lines, or other means of transmission become more prevalent. It may be in those alternatives that investors seek out the best opportunities to receive their information services.
Fool contributor Rich Duprey remembers dialing up the Internet on a 14.4k modem and thinking it was way cool. He does not own any of the stocks mentioned in the article.
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