[8266] in Commercialization & Privatization of the Internet
Re: FCC regulation of Internet service providers
daemon@ATHENA.MIT.EDU (Marvin Sirbu)
Fri Nov 12 13:58:54 1993
Date: Fri, 12 Nov 1993 13:56:29 -0500 (EST)
From: Marvin Sirbu <ms6b+@andrew.cmu.edu>
To: com-priv@psi.com
Cc: com-priv@psi.com
In-Reply-To: <Pine.3.87.9311121222.A2268-0100000@world.std.com>
> Also, are there any plans for putting in place a duly legislated and
> authorized regulatory authority to manage the playing field, or to bring
> the FCC into the act?
Since 1980 the FCC has greatly limited the regulation it imposes on
so-called "Enhanced Services Providers". Any company which leases
underlying transmission lines ("Basic Service") from a regulated common
carrier, and resells communications by the packet using routers or
packet switches, is an Enhanced Services Provider. The FCC has decided
that the provision of Enhanced Services is a competitive marketplace and
thus it may forbear from regulating that marketplace and allow market
forces to determine prices. In particular, the FCC chooses not to
enforce any of the non-discrimination provisions of the Communications
Act with respect to any Enhanced Services Providers.
What about "Enhanced Services" provided by a company which also provides
Baisc Services -- e.g Sprint. Here the FCC makes a further distinction
between "dominant" and "non-dominant" basic services providers. Sprint
is classified as "non-dominant" and thus its provision of enhanced
services is not subject to oversight by the FCC. AT&T is classified as
a "dominant" carrier. Were it to provide IP service, it would be
subject to a number of rules designed to make sure that buyers of basic
service --e.g. toll calls--weren't subsidizing its IP offerings.
However it is still not subject to any anti-discrimination provisions of
the communications act with respect to its enhanced services.
In the future, IP service, clearly an enhanced service, may give way to
ATM service, arguably a "basic service" For Sprint or MFS Datanet the
distinction hardly matters, with respect to overall pricing since, as
non-dominant carriers, the FCC does not regulate prices of either their
Enhanced Services offerings or their Basic Services offerings. However,
if it is classified as a Basic Service, then in providing it, Sprint
_would_ be subject to the anti-discrimination provisions of the Act.
For AT&T, the situation is only slightly different. I am assuming that
ATM will be classified as a "Basic Service". However, the regulation of
AT&T is being gradually relaxed, and so for _new_ services such as ATM,
AT&T has fairly free rein in how it prices. ( Since the prices of
ordinary telephony services are "capped" under the FCC's Price Cap
rules, AT&T is not supposed to be able to raise prices on ordinary rate
payers to subsidize its competitive ATM offerings. Accordingly, they
are left relatively free in setting prices for ATM services.) Again, if
classified as a Basic Service, it would have to be provided consistently
with the Communications Acts anti-discrimination provisions.
The Regional Bell Operating Companies are also classified as dominant
carriers, and they are accorded treatment similar to that I've described
above for AT&T. Non-dominant local companies like MFS or Teleport are
virtually unregulated in the same way that Sprint has little regulation.
Marvin Sirbu
CMU
