Facts of the Case

During the early days of computer telecommunications, the Internet was traditionally accessed through a “dial-up” connection. This type of connection was provided for via the local telephone lines. The consumer’s Internet Service Provider (ISP) would than link the calls to the Internet network.

The Communications Act if 1934 was amended by the Telecommunications Act of 1996, “which regulated telecommunications services. Providers of telecommunication services were subject to taxes to sell access to their network to the public” (1). The Telecommunications Act also specified information services as, “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing” (2).

In the Telecommunications Act of 1996 it characterizes two entities of relevance. “Information service” providers those “-offering…a capability for [processing] information via telecommunications-,”(3) are Subject to mandatory regulation by the FCC or The Federal Communications Commissions as a common carrier which is “in the regular business of transporting people and/or freight. This is distinguished from a private carrier which only transports occasionally or as a one-time-only event”(4).

Brand X , a small Internet Service Provider (ISP), sued, and argued that cable companies should be classified as a telecommunications service because they are a “conduit” for simple data communication. National Cable and Telecommunications Association argued that the fact that they offer more than just telecommunications services, they should be classified as an information service, and accordingly do not fall under the regulations imposed upon telecommunication services.


(1) http://www.nytimes.com/2005/06/28/technology/28broadband.html?_r=2&oref=slogin
(2) Telecommunications Act of 1996, Pub. L. 104-104, 110 Stat. 56 (codified in scattered sections of 47 U.S.C. §§ 151-170) http://law.onecle.com/uscode/47/151.html
(3) 47 U.S.C. § 153 http://www.dps.state.ny.us/fcc/FCC_10_27_03_b.pdf
(4) http://legal-dictionary.thefreedictionary.com/common+carrier