Last week, we ran a feature on how Canada's line-sharing rules allowed an ISP co-op to spring into existence. We won't be seeing any Wireless Nomads in the US anytime soon, however, as the US Court of Appeals for the Third Circuit has issued a decision (PDF) upholding the Federal Communications Commission's 2002 and 2005 decisions deregulating cable and DSL Internet services.

The FCC's orders classified cable and DSL as information services, and therefore subject to deregulation. The companies that own the lines (usually a dominant local telecom like AT&T or Verizon, or cable company like Comcast) were no longer required to lease them to competitors at nondiscriminatory rates. The ruling had the effect of reducing the amount of competition between DSL providers, as the telecoms were free to set their line-leasing rates as high as they wanted, making it difficult for other DSL providers to offer reasonably-priced services.

It was the FCC's contention that the regulations imposed "significant costs" on the companies and hindered investment in new technologies, infrastructure, and service. ISPs which found themselves effectively frozen out of the broadband market by the ruling—like AOL—argued that the FCC's orders had the effect of slashing competition, therefore reducing consumer choice when it comes to broadband providers.

In its opinion, the Appeals Court ruled that the analysis done by the FCC was "both reasonable and consistent" and that the Commission's decision was in full compliance with the Communications Act.

FCC Chairman Kevin Martin praised the Court's decision. "I am pleased that the Court affirmed the FCC's decision to remove outdated, decades-old regulations from today’s broadband services," said Martin in a statement. "By removing such regulations, the Commission encouraged broadband investment and fostered competition. As a result of the Commission's deregulatory policies, broadband adoption has increased and consumers have benefited in the form of lower prices and improved broadband service."

Adoption may be up—although the FCC's own broadband data is not terribly useful—but the US still suffers from a dearth of meaningful broadband competition. Martin's vision of broadband competition between modes of broadband delivery rather than between providers has left much of the US faced with broadband duopolies or monopolies.

The FCC's regulatory scheme is a big part of why the FCC has such high hopes for the upcoming 700MHz spectrum auction and next spring's launch of Sprint's WiMAX network. If wireless broadband becomes widely available and works as advertised, then the competitive broadband situation in the US will improve past its current dismal state. Even then, when compared to the plethora of inexpensive broadband providers users in other countries have to choose from, US consumers will still be lacking for options. Forcing telecoms and cable companies to share their lines have paid off in other countries, but it's not going to happen in the US.