At 11:21 AM 05-05-97 -0700, David Holub wrote:
2) As ridiculous as it sounds I have heard it said that "Internet Traffic is not telecommunications, it is rather an "Enhanced Service". This is particularly absurd in the light of the Telecom Acts definition of "telecommunications", which, as quoted above, by its own broad terms, easily covers Internet traffic.
My reading of the 96 Act (together with the brilliant lawyer who explains all the legal telephony jargon to me) does not show any re-definition of a telecommunications carrier. There is almost no mention of Internet services, beyond a passing mention of access for schools and libraries. The 96 Act does nothing to change or amend the definitions and regulations of telephony carriers or Internet Service Providers. The Internet was scarcely thought of in the bruising battles over control of telephony turf. The interpretations of the incumbent local exchange carriers certainly consider Internet services as non-tariffed service, as almost all have set up separate non-tariffed subsidiaries for Internet service. However, many ILECs consider that their Internet services are subject to some regulation from the Modified Final Judgement on the breakup of the Bell System, such as inter-LATA transport of customer traffic. Hence these clumsy, LDIP (long distance Internet Provider) arrangements between ILEC Internet subsidiaries and wholesale backbone providers.
4) It is argued by the largest ISPs that they are not Telecommunications Carriers and therefore under no obligation to interconnect with other ISPs, who likewise are not Carriers under the Telecom Act. This argument lacks merit for two reasons. First the large ISPs making this argument are themselves wholly owned subsidiaries of self-acknowledged, FCC-licensed carriers. These ISPs are fully-integrated technically, financially, personnel-wise and infrastructure-wise, into their Telecom corporate parent. No regulatory agency in the country would accept the fiction that the ISP "business" of the carrier is somehow separate and distinct from the telecommunications business of that same carrier.
The PUCs of several states have accepted the argument that Internet services may be offered by unregulated subsidiaries of the regulated incumbent LECs. The issue of whether these unregulated subsidiaries are subject to the MFJ provisions has not been tested and probably never will be tested by the Federal courts of jurisdiction. The subsidiary status is solely to prevent unlawful transfer of regulated carrier goods and services to the unregulated subsidiary, whether Internet service, voicemail or dry-cleaning services. (Yeah, I made that last one up.) It is quite clear to me that Internet services are treated like any other unregulated business (such as dry cleaning) that the regulated ILECs choose to enter. There are very few areas that they are strictly prohibited from entering by the Federal MFJ. There are no business activities that I know of that are prohibited by the PUCs of the several states.
And, of course, from a marketing perspective, all these carriers are billing their Internet services as merely one element of their bundled, integrated service offerings. Second, the "you're not a carrier" argument can't apply to Whole Earth, because it is a licensed carrier - it has a Certificate of Public Convenience and Necessity (just like Pacific Bell/TCG, etc.) to provide facilities-based local and long-distance telecommunications services. Even if we didn't have this particular status it seems clear that the definition of Carrier within the Telecom Act (above) would include all ISPs.
There is no definition or redefinition of "carrier" in the 96 Act. The MFJ is still in force, barring ILECs from inter-LATA transport of telephony and whatever-else. The definition of "carrier" dates back to 1934 and doesn't shed any light on Internet services since such services were not well understood in 1934. The Federal government and Federal courts have done nothing to define a legal or regulatory status for Internet service providers. From what is writ in law and precedent we know nothing about what an Internet service might be. We must wait for the FCC to clarify the status of Enhanced Service Providers and their responsibility for access charges in their upcoming rule making to glean a hint of what an ISP might be. We may wait, if we choose, for some future Congress to clarify the status of Internet service providers, but I expect the point to be moot by the time Congress is able to articulate the obvious. I make these rebuttals with the understanding that they have little to do with the issue of UUNET and I mean no disrespect to you and your stand regarding those issues. My respects and good wishes go out to you in your continuing struggle, but I thought it a good idea to say a thing or two about the state of law and regulation with respect to the Internet. Thank you, David, and good luck to you, but don't expect the Feds to help much in the struggle of ISPs for world domination. My best wish is that those who are to be subsumed in the upcoming struggle will be enriched by stock swaps and buyouts, as the BBN and UUNET stockholders have been. --Kent