Academic journal article Rutgers Computer & Technology Law Journal

Dialing for Dollars: Should the FCC Regulate Internet Telephony?

Academic journal article Rutgers Computer & Technology Law Journal

Dialing for Dollars: Should the FCC Regulate Internet Telephony?

Article excerpt


On March 4, 1996 America's Carriers Telecommunication Association ("ACTA"),(1) a trade group representing primarily medium and small long distance telephone companies, filed a controversial Petition for Declaratory Ruling, Special Relief and Institution of a Rulemaking with the Federal Communications Commission ("FCC").(2) ACTA alleged that providers of Internet telephony software operate as uncertified and unregulated common carriers(3) in contravention of FCC Rules and Regulations. The trade association suggested the need for regulatory parity: the assertion of jurisdiction and the imposition of common carrier regulation by the FCC over Internet telephony software companies because conventional, telephone service providers face such government oversight.(4) ACTA also charged that increasing use of Internet resources for telephony "could result in a significant reduction of the Internet's ability to handle the customary types of Internet traffic."(5)

Much of the extensive opposition to the ACTA Petition predictably focused on the relief ACTA sought: expanding FCC jurisdiction and regulation to unregulated software enterprises that make it possible to use "the Internet to provide telecommunications services . . . ."(6) Netscape Communications Corporation and other stakeholders in the current controversy have asserted that the FCC cannot subject Internet telephony software providers to common carrier regulation.(7) The basis of this assertion is that their products constitute enhanced services(8) and information services.(9) Others(10) argued that Internet telephony software providers are exempt from the common carrier classification because the definitions of access software(11) access software providers(12) and interactive computer service(13) expressly qualifies such entities for exclusion.(14)

The ACTA Petition also raises several broader issues largely ignored by the commenting parties:

* What steps, if any, the FCC should undertake to eliminate regulatory asymmetry, i.e., different and inconsistent regulatory treatment of competing enterprises and services,(15) where to do so it must assert jurisdiction and regulate a previously unregulated industry, as opposed to fostering regulatory symmetry, typically resulting in fewer or eliminated regulations;

* When should the FCC maintain regulatory asymmetry, despite some legal and economic arguments favoring a single, consistent regulatory regime;

* To what extent does Internet telephony support or frustrate long-standing efforts to foster universal service;(16) and

* How should the FCC balance the long-standing objective of achieving universal access to Plain Old Telephone Service ("POTS") with its new and broader mandate to "encourage the provision of new technologies and services to the public"(17) including a "high-speed, switched, broadband telecommunications capability that enables users to originate and receive Pretty Advanced New Services ("PANS"), including high-quality voice, data, graphics, and video telecommunications using any technology."(18)

This Article will examine the consequences of continued regulation of incumbent common carriers in an environment where certain newcomers can operate free of regulation. Incumbent common carriers argue that a level competitive playing field necessitates either their deregulation, or the regulation of newcomers, such as internet telephony software providers. However, ongoing asymmetrical regulation has compelling justifications, including serving objectives articulated in the Telecommunications Act, promoting competition and innovation, stimulating downward pressure on rates, and promoting universal service.

This Article concludes that while Internet telephony itself may fall within the new, broader definition of telecommunications service,(19) the enabling software required for such use does not. The FCC can avoid key policy and regulatory issues raised by ACTA, based on a narrow interpretation of the Communications Act, as amended. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.