Telecommunications By Any Other Name….

I’d like to put aside, permanently, the debate about the correct classification of cable service, which has been argued in the courts for years.  In fact,  the underlying question—what is digital communications—has been endlessly and unproductively analyzed in legal and regulatory areas since the 1970s.   The classification question during the disco era,  is it basic or is it enhanced service?, is still with us in the iPad age in the form of,  is it telecommunication or  information?

To me, the bigger issue is why making the right choice from the FCC’s categorization menu—telecommunications, information services, advanced services, advanced services with telecommunications (DSL),  advanced services minus telecommunications (cable modem), etc. —has become the only way to impose non-trivial obligations on carrier and service providers.

The more important designation is that of common carrier, which is a very old legal concept, applied to businesses (originally in transportation) and requiring them to offer reasonable prices to the public and universal, non-discriminatory service.

In FCC cosmology, a telecommunications (or Title II) designation implies common carrier, whereas everything else does not.

Is it possible to conceive of an information service that has common carrier requirements? Definitely.

Common carrier obligations derive from  English common law ideas dating back to the middle ages.  “Common’  in this context means  customary.

Not intending to get too far afield, it is interesting to read how craftsmen who had a common calling (barrel maker, candle maker,..) therefore had obligations to serve the public fairly, typically in areas where there were few plying the trade.

Later, these accepted customs and principles—we can call them non-discrimination or neutrality—made their way into statutory laws, most significantly those associated with transportation enterprises such as inns or ferries.

You certainly didn’t want the sole hotel in your hamlet to charge an outrageous room rate, just because they can. Transportation services that were “essential’ and for the public were under common law rule of common carriage.

Skipping ahead and looking westward, these ideas were embedded in US law. Even during our mythical free-market, low taxation 19 th century , the concept of public good was enshrined in important court rulings- Munn vs Illinois may be an eye-opener for some.

Enough ancient history. So where does this leave us now in 2010?

In the recent Comcast case, an appeals court decided the FCC lacked authority to impose net neutrality (or the common law principle of non-discrimination) on a cable broadband provider.

Shaping the ruling was a legal conclusion  established a few years earlier: cable broadband providers were not really providing … telecommunications.

How it came to be that cable modem service is not telecommunications is another of many interesting tales from the FCC book of Amazing Stories. Motivated readers may want to review the path that led to the Supreme Court’s 2005 ruling in NCTA vs. Brand X.

Cable provider clearly not offering voice telecommunications

To quickly summarize:  the FCC (under then Chairman Michael Powell) declared that cable modem is purely an information service. And  since,  as everyone knows information and telecommunications are mutually exclusive,  the cable providers are not offering telecommunications to their subscribers.   Only the regulatory high priests could concoct this strange   either-or concept, which was based on its selective reading of the Communications Act of 1996, lack of familiarity with an OSI stack, and a nostalgic view of our free market past.

In any case, the Supreme Court agreed and gave the FCC a lot of discretion, in my humble opinion, in deciding what was common carriage and wasn’t.

In other words, cable modem service is about as unregulated as you can get in the FCC regulatory universe.

Surprisingly, I find myself agreeing with Justice Scalia’s dissenting opinion in NCTA vs. Brand X:

“After all is said and done, after all the regulatory cant has been translated, and the smoke of agency expertise blown away, it remains perfectly clear that someone who sells cable-modem service is “offering” telecommunications. For that simple reason set forth in the statute.”

In other words, to say that Comcast’s triple play is not providing telecommunications and is not explicitly holding itself out as a common carrier is absurd.

My solution:Congress needs to revisit the Communication Act of 1996, eliminate the telecommunications-information dichotomy, and establish some threshold when a communications service becomes essential for the public and can be classified as a common carrier.

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