• United States

A telecom-regulation pipe dream

Nov 21, 20053 mins
NetworkingRegulationTelecommunications Industry

There is a new version out of the draft telecom reform bill that I wrote about a while back, and from its rough start, it’s heading in a worse direction.

The committee staff seems to be drinking the same Kool-Aid mixed by the big telecom carriers that the FCC has swallowed. The Kool-Aid causes drinkers to hallucinate that big telecoms’ plans for closed, vertically integrated, everybody-has-to-pay-the-carrier-for-everything silos are better for customers and the country than the open Internet has proved to be. To see what big telecom is thinking, read SBC Chairman Edward Whitacre Jr.’s interview with BusinessWeek magazine about how Google and other Internet services use “for free” the Internet connections SBC’s customers already pay for.

The House bill and the FCC use good-sounding words about network neutrality but then eviscerate the same words with pro-carrier caveats.

I expect that it would be possible to design a telecom regulatory regime that would actually be good for the users and the country but I doubt we will see any such thing out of Washington. That is, unless Google’s lobbyists learn a lot – and quickly – by watching the well-connected RBOC lobbyists.

Just what might good telecom regulation include? What would I do if it were up to me? First, as the House bill does, I’d preempt all local and state controls, but I would go further and also eliminate all local franchise fees. Then I’d split the problem into two spaces: facilities owners and service providers. I would not differentiate between the types of facilities, or pipes, as the House bill does. In the IP age, pipes are pipes, not video pipes or phone pipes.

Under my regulations a pipe owner could keep the facility to itself and offer its own phone, Internet or video service – there would be no forced open access to facilities. Or it could allow Internet access, on whatever equal terms it chose, to anyone who wanted to provide an Internet-based service. It could not, however, concurrently offer Internet access and any other Internet-based service. Pipe owners also would have reasonable access to conduits and poles.

“Internet service” is just that – unimpeded and unrestricted access to the Internet and Internet-based offerings. An ISP would be prohibited from interfering in any way with traffic to or from a customer except at the express request of that customer, or from favoring one service provider over another. For example, a customer could order an ISP-provided and -run firewall if it so desired. ISPs, but not providers of Internet-based services, would have to obey court-ordered requests for wiretapping from law enforcement. End-to-end encryption might make the wiretaps less useful than they might be, but so it goes.

I assume that video and VoIP services will become just Internet-based offerings without any need to establish special rules for them. E911-like location services would have to be enabled by ISPs for all service providers using the ISP, including VoIP providers.

Obviously, these rules would not make Whitacre very happy, because he could not squeeze extra money from Internet-based services just to have him leave them alone. But leave them alone he must.

Disclaimer: Harvard has schools that train people to actually create regulations. Clearly, I did not ask them for help in the above, so it’s my own opinion.