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The US Supreme Court ruled on Monday that cable system operators do not have to open their networks to competing broadband internet service providers.

The “Brand X” ruling, which overturns an earlier decision, represents a significant victory for the US cable television industry and the Federal Communications Commission.

Cable operators, backed by the FCC, had argued that high-speed cable internet provision represented an information service rather than a telephony service, and was therefore not subject to the rules that require telecommunications companies to open their networks to competitors.

In a 6-3 vote, the Supreme Court agreed, reversing an earlier appeals court ruling and sending the case back to the lower court.

The justices said the FCC had provided a “reasoned explanation” for its separate treatment of telephone and cable networks, as part of a longstanding government policy to deregulate communications markets.

The majority of the high court also noted that the FCC was moving to loosen high-speed internet access requirements on telecommunications companies that provide broadband internet access using digital subscriber line technology, or DSL. “The commissioners' decision appears to be the first step in an effort to reshape the way the commission regulates information service providers,” the majority ruling stated.

“That may be why it has tentatively concluded that DSL services provided by facilities-based telephone companies should also be classified solely as an information service.”

The case, which has been watched closely by industry groups who say it could help to shape the future of broadband internet access, grew out of a 2002 FCC decision that cable broadband was an “information service” and not subject to open-access requirements under the 1996 Telecommunications Act.

That decision was challenged in the courts by Brand X Internet Services, a small internet service provider based in Santa Monica, California.

The appeals court sided with Brand X.

The ruling is likely to hit independent internet service providers hardest. “Unfortunately, today's ruling is both anti-consumer and anti-competition,” said Representative Ed Markey of Massachusetts, a leading Democrat spokesman on communications issues.

Copyright The Financial Times Limited 2019. All rights reserved.

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