Neither Fish Nor Fowl: New Strategies for Selective Regulation of Information Services

Robert M. Frieden, Penn State University

Abstract

Neither Fish Nor Fowl: New Strategies for Selective Regulation of Information Services

Rob Frieden

Professor, Penn State University

102 Carnegie Building

University Park, Pennsylvania 16802

(814) 863-7996; rmf5@psu.edu

web site: http://www.personal.psu.edu/faculty/r/m/rmf5/

The Federal Communications Commission (“FCC”) has created a dichotomy between telecommunications and information services with an eye toward limiting traditional common carrier regulation to the former category. This regulatory dichotomy provides the basis for exempting most Internet-mediated services from traditional telephony regulation that requires carriers to provide nondiscriminatory network interconnection even with competitors. To support its deregulatory mission the FCC has found ways to subordinate the telecommunications components in a service that blends telecommunications transmission of bits with information services. For example, in reclassifying Digital Subscriber Link (“DSL”) Internet access from a telecommunications service to an information service the FCC combined the need for deregulatory parity with a new finding that the once stand alone telecommunications service characteristic of DSL had become inextricably integrated with information services with the latter predominating.

Notwithstanding the urge to deregulate, either on rational or doctrinal grounds, the Commission has had to confront the fact that competition alone will not ensure the achievement of all Congressionally mandated, or FCC identified public interest objectives. The FCC has found it necessary to qualify its telecommunications/telecommunications service regulatory dichotomy to ensure that the Commission could comply with a national security law, enhance the reliability of enhanced-911 emergency calling via VoIP services, require VoIP service providers to accommodate hearing impaired consumers, and mandate support of universal service funding programs by VoIP consumers who now must pay an 11.3% surcharge on their monthly subscription.

This article will examine whether and how the FCC can lawfully deregulate most next generation network services, while selectively depriving some apparently qualified ventures from fitting within an otherwise expansive deregulatory “safe harbor.” To achieve the selective regulation of certain information services the FCC has relied on Title I of the Communications Act of 1934, as amended, to justify extension of “ancillary jurisdiction” and the practical expansion of the FCC’s regulatory wingspan. In other instances the FCC has justified its regulatory intervention on grounds that the applicable law, e.g., the Communications Assistance for Law Enforcement Act (“CALEA”), defines telecommunications services differently than the Communications Act of 1934. In both instances the FCC has argued that reviewing courts should defer to the Commission’s expertise that extends beyond technical issues to include conceptualizing the difference between telecommunications and telecommunications services and between carriers’ offering versus providing services.

The article concludes that Title I provides a shaky foundation to support regulation particularly in the absence of separate legislation supporting jurisdiction. The article also concludes that the FCC cannot expect to qualify for judicial deference based primarily on the Commission’s creative interpretation of statutory definitions.