Brand X May Boost Some Firms’ Sales; Others See Less Impact

Intel and Nortel say broadband spending may get a boost from Mon.’s Brand X Supreme Court ruling (CD June 28 p1), while other firms see little change from deregulating broadband providers. Intel, part of a lobbying group that backs deregulation of cable and telecom broadband services, says the ruling may stimulate demand for equipment to go online, including PCs. Nortel stood by comments yesterday that Brand X will spur spending.

The FCC’s treatment of broadband as an information and not a telecom service, freeing that industry from common-carrier rules, will be an indirect benefit to chipmakers, Intel Communications Policy Dir. Peter Pitsch said. “Sound broadband policy is going to make high quality, affordable broadband available to all Americans,” he said. “If that happens, people are going to want to buy computers with state of the art microprocessors, and that’s why we're in this. We largely stand in the shoe of the consumer.”

By contrast, some companies that make telecom gear and sell broadband-related services expect unchanged demand from Brand X. Motorola expects no shift, said Paul Alfieri, a spokesman for its broadband unit. “The Brand X decision is more about consumer’s choice for service,” he said. “Motorola is going to provide the appropriate technology to whomever the consumers are buying the service from.”

ISPs and VoIP firms, which analysts say have the most to lose over the high court ruling, will monitor FCC rulemakings. EarthLink, which already has said the FCC should impose certain mandates on Bells, will be watching and waiting, said Vp Dave Baker. Vonage Senior Vp- corporate Communications Brooke Schulz said “we'll see” about whether the firm comments on rulemakings. The case is “neutral” to “positive” for the VoIP firm, she said, and “as far as a risk to unaffiliated carriers, we don’t anticipate that to be an immediate threat.”

“It’s not immediately obvious why it would increase equipment spending if cable never had ISP access to begin with,” said Paul Gallant, a former FCC staffer now with Stanford Washington Research Group. The founder of Brand X Internet Services concurred. “We're really not any worse off today than we were yesterday,” said Pres. Jim Pickrell, whose firm filed the suit in the 9th U.S. Appeals Court, San Francisco. “The door has been slammed in our face.” - Jonathan Make