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DSL providers hope to mimic cable's win

The U.S. Supreme Court blessed a hands-off approach to cable modems. Now the former Bell companies want the same treatment.

Cable companies won a major victory on Monday when the U.S. Supreme Court blessed a deregulatory approach that immunized them from onerous federal regulations.

Now the political spat likely to play out over the next few years will center on whether telephone companies' rival DSL (digital subscriber line) technology should enjoy the same immunity.

Tom Tauke, Verizon Communications' vice president for public affairs, said his company would press for the federal government "to treat all competing broadband services alike."

"The Supreme Court recognized that cable modems are an information service, and this should allow broadband to continue to grow in an unregulated environment," said Jeff Campbell, director of technology and communications policy at Cisco Systems. "We now look forward to the FCC giving DSL similar treatment."

In Monday's majority opinion written by Justice Clarence Thomas, the court said that companies offering high-speed Internet access over cable lines do not have any legal obligation to provide rivals like Brand X or EarthLink with access to their wires. That will create an additional incentive for cable operators to invest more in their infrastructure, according to many economists.

Two avenues of attack are available for Verizon, SBC Communications and other former Bell companies that dislike their second-class status: the Federal Communications Commission and Congress.

The FCC currently is mulling whether DSL should be regulated as a "telecommunications service"--and thus subject to the weighty stack of regulations designed for the analog telephone system of the early 1900s--or as an "information service" that is relatively free from government control.

Certain types of DSL should be treated with a light touch, the agency has tentatively concluded. But any definitive ruling will have to wait until a successor to FCC Commissioner Michael Powell is confirmed by the Senate, a move that would again hand the Republicans a 3-2 majority.

Also, Congress is beginning preliminary discussions about revisiting the 1996 Telecommunications Act, which would provide a natural vehicle for a formal declaration of DSL's status.

"We hope to have a bill moved on this by the end of the year," said a spokesman for the House Energy and Commerce Committee. "The aim of the bill is to achieve a more fair, balanced regulatory treatment of similar telecommunications services that happen to travel over different wires."

Sen. John Ensign, R-Nev., signaled that the DSL question would be part of broader telecommunications legislation: "It is time that these laws reflect the sweeping changes technology has brought to this critical sector of our economy. Revising the communications laws will remove barriers to innovation."

Any attempt to extend the same regulatory immunity to DSL is sure to draw squawks of protest from liberal advocacy groups and their allies, which quickly slammed the Supreme Court's 6-3 opinion as "anticonsumer."

"Today's ruling is both anticonsumer and anticompetition," said Rep. Ed Markey of Massachusetts, a senior Democrat on a telecommunications subcommittee. Using language that seems to place him at odds with the Bells, Markey pledged to "ensure that national broadband policy reflects the open architecture model of the Internet and remains a medium friendly to innovation, entrepreneurial activity and consumer-centric communications."

CNET's Anne Broache contributed to this report.