Using the same logic as apparently used by a U.S. district court, and upheld by a court of appeals, mobile phone service might not be "telecommunications," and therefore might not be governed by common carrier regulation.
It is not clear whether that applies only to a "legacy free" mobile service or especially applies to any mobile service using IP in the core of the network and then converts to other protocols at the edge, with the processing at the edge.
You might think the United States resolved--decades ago--the question of whether VoIP is an information service--and therefore unregulated--or a telecommunications service, and therefore regulated. Maybe not.
The argument is “in the weeds” of policy, and is not as straightforward as you might think. At issue are fundamental views about whether “what” gets done is controlling, possibly “where” or “by whom” or “how” something gets done is paramount.
Under the Telecommunications Act of 1996, a “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,” as noted in 47 U.S.C. § 153(53).
That is the “what gets done” being paramount.
An “information service,” on the other hand, is “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, . . . but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.
That is a version of the “what gets done” view. New court decisions by a district court and appeals court suggest that “where” something gets done, or by whom, also matters.
Clear as mud, you might agree. But all that matters because “telecom” services are regulated differently than information services. In U.S. law, information services are covered by Title I, while telecom is a utility regulated under Title II of the Communications Act of 1934, which was amended by the Telecom Act of 1996. More weeds.
U.S. telecom law has tended to be viewed through the “what gets done” lens.
“If it walks like a duck, it’s a duck.” That adage actually describes the general line of thinking that federal level regulators have followed whenever technology transitions happen in the “telecommunications” (common carrier) industry.
But a new issue is raised by a Minnesota district court, and affirmed by an appeals court: if protocol conversion is an attribute of a “data service,” and if such protocol conversion happens in customer premises equipment, then a regulated telecom service is a non-regulated data service.
That arguably is a new line of reasoning, compared to the “what is being done?” view. What some might see as the key import of the case--federal preemption--might arguably not be the long term importance of the case. The district court and appeals court have ruled that Charter’s VoIP service is an instance of “information services,” not “telecommunications.”
“The touchstone of the information services inquiry is whether Spectrum Voice acts on the consumer’s information—here a phone call—in such a way as to ‘transform’ that information,” the appeals court says. That is significant.
The court essentially argues that “what is done” (data processing) controls, not the “intent” of the actions (voice communications). Perhaps significantly, the district court relies on an understanding of the difference between “network” and “customer premises equipment” in its logic.
Essentially, since the CPE voice gateway is doing protocol conversion at the edge, the bits transformed are not acted upon “in the network.” The court reasons that this makes a voice session analogous to any other internet operation where edge to edge communications, but not network control, are involved. Weeds, weeds, weeds.
But there are big implications.
If performing the conversion from TDM to IP inside a customer’s home is sufficient to convert a telecommunications service into an information service, as the district court has reasoned, then any other service provider could, in principle, greatly reduce its regulatory burden simply by moving converter boxes (where protocol conversions happen) inside customers’ homes.
And if legacy-free communications to mobile phones, for example, were to use the same logic, then mobile voice is not communications either, and for the same reasons. Protocol conversion happens at the edge device, not in the network.
At least conceptually, the courts’ logic suggests that mobile phones might also be akin to cable telephony CPE. And therefore likewise not “telecommunications” services.
A simple change of physical location would transform what used to be telecommunications services to information services. Experts say the FCC never has specifically ruled on protocol conversions, or where those protocol conversions occur.
In general, federal regulators looking at new technology in the telecom industry have followed a rule that essentially assumes that the purpose of a platform and its use by customers dictates its nature. In other words, if phone calls start and terminate on edge devices “as calls,” then no matter what happens in the network, those operations are “phone calls” for purposes of regulation.
Were that not the case, every major introduction of new technology (digital central office switches, packet switches, each new generation of mobile networks) would be cause to reexamine regulatory formats.
Three decades ago, for example, big questions were raised about whether voice over Internet Protocol should be regulated the same way as time division multiplex telecom services, or whether VoIP was a data service that should be unregulated. By the mid-2000s, the rule became settled: interconnected VoIP services (phone calls to phone devices) are “telecommunications,” not information services.
To make a long story short, regulators have settled on the notion that when VoIP is used and sold as a telecommunications service (interconnected voice service), that is how it will be treated. When messaging or other forms of IP voice are used as a peer-to-peer app, such uses have continued to be seen as unregulated information services.
But another period of potential rulemaking seems to be arising again. A district court and appeals court has ruled that VoIP is an information service essentially challenging the prior notion that VoIP is a telecommunications service.
“The district court ruled that Charter’s VoIP service is an ‘information service’ under the Telecommunications Act and that state regulation of Charter’s VoIP services was therefore preempted. Because we agree with the district court, we affirm,” the appeals court has ruled.
One might think we have settled the issue of how to regulate VoIP, but the Minnesota Public Utilities Commission and Charter Communications disagree. The MPUC wanted to regulate “Charter Advanced,” the business unit that offers the VoIP service, as a “telecommunications service.” That is rather something many had assumed was settled decades ago.
Charter argues that its service “Spectrum Voice” is an “information service” under the Telecommunications Act of 1996. That then leads to the notion that Spectrum Voice cannot be regulated by the PUC.
The court actions are a shock. They conflict with federal policy and therefore will have to be resolved, again, by a higher court. One has to assume that the principle of federal preemption will be invoked again.
In the past, new technology has raised issues about state level versus federal level regulations, among them the argument that “50 different sets of laws” will inhibit the supply of advanced new technology. The result, in such cases, has tended to be federal preemption of state-level rules.
The appeals court decision almost has to be appealed to the Supreme Court, as the recent decisions once again raise issues, not only about jurisdiction (who gets to decide?) but on the fundamental issue of whether voice is an information service, for purposes of regulation, or a telecommunications service.
I thought that issue--whether VoIP is an information service or telecom service--was settled some decades ago. Perhaps the Supreme Court will agree that, indeed, the issue has been settled. It might also happen that the U.S. Congress steps in, as is its right, to settle the issue legislatively.
There are several sets of issues: who has jurisdiction over VoIP and telecom services, and in what areas? Also, there is the fundamental issue of whether interconnected voice is a “telecom” service, with telecom regulatory rules, or an information service, with data services rules.
One attribute of information services are that protocol conversions happen. Cable companies argue they do this inside customer homes. Telcos tend to do so at central offices and other locations outside the home (IP in the middle, or network, but TDM to the home).
Many believe the current and possible ultimate decisions will have implications for network neutrality rules, as the Federal Communications Commission rules specifically state that the FCC’s rules preempt state rules on net neutrality. That is the jurisdiction issue.
What seems even more fundamental, though, is the issue of whether interconnected voice actually is an information service. That is a decision with profound implications. Since all voice services--interconnected or peer-to-peer--now use IP platforms, there now is at least an opening for a major reexamination of utility regulation for voice services generally.
There are huge institutional barriers to reconceiving voice services as “data services,” for purposes of regulation. For that reason alone, it seems unlikely we will see another major reexamination of how VoIP should be regulated (aside from jurisdictional issues).
But it is stunning to see such court decisions three decades after courts and regulators essentially settled the issue.
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