Transcript Regulation of the Internet: The Hows and Whys of

Regulation of the Internet:
The How’s and Why’s of
Telecommunications Reform
John Windhausen
President, Telepoly Consulting
Wendy Wigen
Policy Analyst, EDUCAUSE
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What is Driving the Effort to Re-Write
the Telecom Act?
What is being proposed?
What does the higher education community support?
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What is Driving the Effort to Re-Write
the Telecom Act?
1. Telephone Companies Seek Broadband
Deregulation (Parity with Cable)
2. Small Telcos concerned that VOIP will erode
universal service revenue.
3. Bell Companies Seek to Preempt Cities from
Regulating Internet Video
What do all three issues have in common? They
are all fueled by growth of the Internet.
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Chapter 1: Background
Purpose of the Communications Act of 1934:
…to make available… to all the people of the United
States… a rapid, efficient, Nation-wide, and world-wide
wire and radio communication service with adequate
facilities at reasonable charges.
Authority:
Gave very broad authority to the FCC.
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Structure of the
1934 Communications Act
LAW
Title I
General FCC
Authority
Title II
Title III
Common
Carrier
Spectrum
Licensing
VOICE
PHONE CALLS
BROADCAST
TV AND RADIO
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Results under the
Communications Act of 1934
Bell Companies (AT&T) build telephone
networks serving 80% of the U.S. population.
The Rural Utility Service provides grants and
loans to small “mom and pop” phone
companies to cover the remaining 20% of the
population, resulting in 1400 independent
telephone companies.
U.S. Telephone penetration at 94%, one of the
best in the world.
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1980’s: New Services Bring
Stress to the 1934 Act Structure
Data Communications over Telephone Company
Facilities  FCC’s Computer I, II and III Decisions
create a basket of Unregulated “Information
Services.”
Cellular service developed slowly. The FCC initially
awards only two licenses per market.
Cable TV systems deployed gradually, as cities
demand parks, production studios, money in paper
bags, etc.
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Congressional Action Spurs
Deployment of Cable and
Wireless Technologies.
1984 Cable Act preempted local authority
over rate regulation, established federal rules
(and FCC authority) over cable prices and
programming.
1992 Spectrum Auction Act made new
spectrum available for 3-5 PCS licenses to
compete with cellular.
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Mid-1990’s Communications Policy
Title I
R
E
G
U
L
A
T
E
D
General
FCC
Authority
Title II
Title III
Common
Carrier
Spectrum
Licensing
VOICE
PHONE CALLS
And later
DATA
WIRED
And later
WIRELESS
BROADCAST
TV AND RADIO
Title VI
CABLE
TELEVISION
And later
WIRELESS VOICE
(Private radio,
Cellular, PCS)
SATELLITE
Unregulated: Enhanced Services
Data processing, AOL, ISPs
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Telecom Act of 1996
Imposed Unbundling Obligations on the Bell
Companies in return for allowing them into
long distance.
Opens the local phone market to competition.
Requires the FCC to promote advanced
services. (section 706)
Banned Internet Porn.
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Results of the 1996 Act:
Local telecom competition has stalled at about
15% of the market.
Over investment in low-speed broadband
facilities.
Low-speed broadband now available to over
90% of US Homes.
But only 30% subscribe, putting US 16th among
Developed Countries.
Cable and Telcos now compete for Broadband
service, but operate under different rules.
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Chapter 2: And Along Comes
the Internet….
We could have killed it but we wisely chose not to….
FCC 1999
We haven’t regulated it because we didn’t know how
to… Senator Cantwell 2004
First, do no harm… Michael Powell, former Chairman of the
FCC
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Internet Regulation
Telecommunications
Service:
Provides basic
transmission service to
the general public for a fee
Highly regulated
• Behavior (anti-trust,
consumer protection…)
• Revenue (USF, 911…)
Information/
Enhanced Service
(including Internet
Services):
Provides enhanced
communication service
that involves data
storage/processing i.e.
Internet access, voice
mail….
Data is manipulated or
acted upon
Unregulated
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But what if…
Broadband transmission is bundled
with IP Service,
Voice over IP competes with
Traditional Voice,
and Video over IP compete with
cable???
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3 Questions:
Should DSL and cable modem transmission
services be regulated as telecom or info
services if they are used solely to provide
access to broadband info services?
Should VOIP be regulated as a telecom service
or info service?
Should Video over IP be regulated as a
telecom service or a cable service?
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Answer #1: Information Services.
Comm. Act
R
E
G
U
L
A
T
E
D
Title II
Title VI
Common
Carrier
High-Speed
Network Facilities
Dial-up
DSL and Other
Telco Broadband
CABLE
TELEVISION
Cable Modems
Unregulated: Information Services
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Answer #2: VOIP is ?
“VoIP breaks the mold. It is voice as a data
service. Considered another way, the 1996
(Telecommunications) Act assumes that data
applications operate on top of a regulated voice
network. VoIP, by contrast, delivers voice on top of
an Internet protocol data channel, which can run
on any type of digital network.”
….Kevin Werbach
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What if a lot of people switch to
VoIP?
What happens to:
1. Law Enforcement Access (CALEA)
2. Emergency 911 Service (Public Safety)
3. Access for the disabled (Disabilities Act)
4. Support for the Universal Service Fund
5. State revenue…. 15%
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Answer #3: Telecom Services?
Comm. Act
R
E
G
U
L
A
T
E
D
Title II
Title VI
Common
Carrier
High-Speed
Network Facilities
Dial-up
CABLE
TELEVISION
VOIP
Unregulated: Information Services
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Answer #3: ?
What if a lot of people switch to
Video over IP?
What happens to public service requirements?
What about franchising rules: $$$ and control .
If the Bell Companies receive a national franchise to
provide video, why should the cable companies
continue to subject to municipal control?
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Answer #3: Info Services?
Comm. Act
R
E
G
U
L
A
T
E
D
Title II
Title VI
Common
Carrier
High-Speed
Network Facilities
Dial-up
CABLE
TELEVISION
Video
Over IP
Unregulated: Information Services
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Convergence and Competition
1. Deregulate and let the market sort it
out…. Use anti-trust law to deal with unfair
competition. (mature industry i.e. railroads,
airlines)
2. Status quo: The law is sufficient as is, it just
needs to be enforced and clarified.
3. Issue-by-Issue: Separate bills on each topic.
4. Write a new law based on how IP systems
work.
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Chapter 3:
What is the higher education
community doing?
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Higher Education View of
The Internet
The Internet should remain an open and
innovative network.
Broadband connectivity is available and
affordable to as many persons in this country
who want it.
Broadband offers speeds that allow, not just
advanced entertainment, but advanced:
Education
Medical services
Government Services
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The United States not only continues to
compete but to lead in information
technology.
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Higher Education’s Perspective
The United States should adopt as a national
goal:
A fast, affordable, ubiquitous broadband Internet
An Internet that is open to all persons, lawful
content and applications
A policy that promotes fair and open competition
A policy that guarantees the right of communities
to build and operate their own networks
A policy that supports and funds continued
academic research into Internet technologies and
applications
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More Information
EDUCAUSE Policy Website
http://www.educause.edu/policy
[email protected]
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