Net@EDU Focus on IP Telephony: BASICS OF REGULATION AND CATEGORIZATION Casey Lide EDUCAUSE

1. Net@EDU Focus on IP Telephony: BASICS OF REGULATION AND CATEGORIZATION Casey Lide EDUCAUSE

2. Some history at the FCC April 10, 1998 FCC Order Common Carriage

3. “Telecommunications”: “the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent or received” - 47 USC sec153(43) (think conduit)

4. Information services (enhanced services) are: “services in which a provider offers a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications.”

5. Historical distinction (since 1970’s) at FCC: basic v. enhanced services “regulated” v. “non-regulated” Telecommunications Act of 1996: telecom. carrier v. “information service provider” (ISP)

6. Stated another way: Regulated communications are those that constitute: (1) “communications by wire”/by radio” (47 USC 153(33),(52)) (2) “telecommunications” (47 USC 153(43)), and (3) are offered to the public for a fee, making them “telecommunications services” under sec. 153(46) (and making the entity a “telecommunications carrier” under 153(44).

7. ISP: = not “telecommunications carrier” = “enhanced services provider” = “end user of basic telecom. services” = no access charge payments to LECs = no direct USF contributions, b/c ESP

8. April 10 Report to Congress on Universal Service: Required: Review of definitions of “telecommunications”, “telecommunications service”, “telecommunications carrier”. Review of “who is required to contribute to universal service ... and of any exemption of providers or exclusion of any service that includes telecommunications from such requirement.”

9. April 10 Report to Congress on Universal Service: “Phone-to-phone” IP telephony could be classified as a “telecommunications service”, and therefore providers of it could be regulated, subject to access charges, etc. The voice-to-IP conversion takes place after leaving the customer’s premises, and looks exactly the same to the end user as conventional telecommunications. “Computer-to-computer” IP telephony is distinguishable: “The conversion (from voice-to-IP) is an application the subscriber runs, using Internet access provided by its Internet service provider.”

10. “The Commission’s definitions of ‘phone-to-phone’ IP telephony and ‘computer-to-computer’ IP telephony beg the question: what is a phone and what is a computer?” -- Commr. Furchtgott-Roth, disst.

11. “We are left with the difficult task of categorizing service offerings that do not fit neatly in either category. … Sorting hybrid services into their appropriate regulatory bin is difficult, yet something we will be forced to do more and more… This reflects the challenge of adapting a balkanized regulatory structure to a world of technological convergence.” -- Commr. Michael Powell

12. Access charges: Enhanced services providers are exempt from access charge payments to LECs. (big reason for current cost savings in computer-mediated VoIP). Access charge reform: will get lower, and theoretically become de minimus/nothing. Access charges for ESPs/ISPs are not on the radar screen. Telecommunications carriers must pay access charges.

13. Bell South Policy: “Telecommunications” determination is “technologically neutral”. Depends on the end points (computer vs. phone). “Phone-to-phone” IP telephony is, as a regulatory matter, identical to “circuit switched telephony”; it is a telecommunications service. “Bell South intends to apply access charges to such traffic as it becomes aware of IP telephony providers’ activity within its region.” “ESP exemption from access charges is “transitional”.”

14. Review: “Telecommunications service” is: the offering of telecommunications - for a fee - directly to the public - or to such classes of users as to be effectively available directly to the public, regardless of the facilities used

15. Common Carriage: “Telecommunications carrier”: … includes only those carriers that provide telecommunications on a common carrier basis. Only those carriers who hold themselves out to service indifferently all potential users can be considered telecommunications carriers.” -- April 10 Order, at 155.

16. Common Carriage: A fact-specific determination: holding out services to the public (e.g., advertising)? tariff filings?

17. Common Carriage: Provider of “telecommunications service” = “common carrier”. No provision for regulating private networks, no matter how much they cross the line from enhanced services provision into “telecommunications services”. So: stay private, keep it an intranet, keep it a research project. Know that the broader the community you provide services to, the more likely you are to be regulated as a carrier (and raise RBOC ire). For this (non-commercial) community it is a function of who you serve as much as it is what services you offer. This may be a very a good thing.

18. BUT: Regulators can do what they want. The battleground will be the states -- and policies vary from state to state.