There is a strange imbalance in local telephony. Consider the chart above. If a local common carrier provides local telephone service it must pay E 911, Universal Services and FCC Interconnect Fees. In reality the customer pays these as line items on their bill. Now the CATV company provide the identical services but has no obligation for these charges. Yet the CATV company sets up a separate common carrier shell to get bill-and-keep interconnection, namely no cost, with the local telco. Thus the CATV company will always be less if its costs are comparable. This puts the wireline common carrier at a disadvantage.
Now the FCC has ruled as follows:
"FCC 04-27 MEMORANDUM OPINION AND ORDER Adopted: February 12, 2004 Released: February 19, 2004
3. The Act defines “telecommunications” as “the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.” “Telecommunications service” is defined as “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.” “Information service” is defined as “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, 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."
Thus both are really providing the same service. Yet why the difference. One of the rulings was the Pulver Free World Dialup, FWD, decision which states:
"22. We find that even if some form of an end-to-end analysis were deemed applicable to FWD, FWD would be considered an interstate information service in accordance with our “mixed use” doctrine. Where separating interstate traffic from intrastate traffic is impossible or impractical, the Commission has declared such traffic to be interstate in nature. Based on the record in this proceeding, it is evident that it is impossible or impractical to attempt to separate FWD into interstate and intrastate components. This “impossibility” results from the global portability feature of an FWD member’s unique identification number, enabling that member to initiate and receive on-line communications from anywhere in the world where it can access the Internet via a broadband connection. Moreover, FWD’s technology does not enable Pulver to determine the actual physical location of an underlying IP address. Finally, it is evident that more than a de minimus amount of FWD’s offering is interstate. Therefore, we would analogize the FWD offering to those previously deemed exclusively interstate by the Commission where it has applied its “mixed use” rule."
Thus the FWD decision allowed the door to open for the VOIP types of services. Convlved reasoning, yes, but it is the FCC.
Now the next decision was the Vonage Decision. It consists as follows:
"FCC 06-94 REPORT AND ORDER AND NOTICE OF PROPOSED RULEMAKING; Adopted: June 21, 2006 Released: June 27, 2006
14. On November 9, 2004, the Commission adopted the Vonage Order, in which it preempted an order of the Minnesota Public Utilities Commission (Minnesota Commission) that applied Minnesota’s traditional “telephone company” regulations to Vonage’s DigitalVoice service – an interconnected VoIP service under the definition subsequently adopted by the Commission. Without classifying Vonage’s service as either an “information service” or a “telecommunications service” under the Act, the Commission held that DigitalVoice cannot be separated into interstate and intrastate communications for compliance with Minnesota’s requirements without negating valid federal policies and rules. The Vonage Order made “clear that this Commission, not the state commissions, has the responsibility and obligation to decide whether certain regulations apply to DigitalVoice and other IP-enabled services having the same capabilities.” The Commission further indicated that it intended to “resolve important regulatory matters with respect to IP-enabled services generally, including services such as DigitalVoice, concerning issues such as the Universal Service Fund” in the IP-Enabled Services proceeding.
15. Since the Vonage Order, the Commission twice has adopted regulations for certain provider of IP-enabled services. On May 19, 2005, the Commission adopted its first Report and Order – the VoIP 911 Order – in the IP-Enabled Services proceeding. In that order, the Commission defined a particular category of IP-enabled services – “interconnected VoIP services” – as services that (1) enable real-time, two-way voice communications; (2) require a broadband connection from the user’s location; (3) require IP-compatible customer premises equipment; and (4) permit users to receive calls from and terminate calls to the PSTN. Declining to determine the statutory classification of interconnected VoIP services at that time, the Commission asserted its ancillary jurisdiction under Title I of the Act to require interconnected VoIP service providers to supply 911 emergency calling capabilities to their customers. On August 5, 2005, the Commission adopted another order in which it determined that providers of interconnected VoIP services, as defined in the VoIP 911 Order, are subject to the Communications Assistance for Law Enforcement Act (CALEA). The Commission’s decision that CALEA obligations apply to interconnected VoIP services was consistent with the approach taken in the VoIP 911 Order, in that the decision rested in part on the fact that interconnected VoIP services allow customers to originate calls to and receive calls from the PSTN."
This opened the E 911 requirement but in a slow roll manner. It also opened up the CALEA requirement as well. There should be some resolution in equity between these carriers. We see that many rural telephone companies which had survived on interconnection fees as subsidies for rural telephony are being driven out of existence by this simple arbitrage of the CATV company. We have specifically seen companies such as Comcast ruthlessly use this Trojan Horse attack to drive customers to their system, We believe that the Fairpoint collapse was a result of this type of arbitrage. We would like to see the FCC resolve this on some basis of equality. Clearly the Universal Service Fee is a tax and should frankly be eliminated as should the FCC Line Charges. The E 911 should be the same for all.
Now the FCC has ruled as follows:
"FCC 04-27 MEMORANDUM OPINION AND ORDER Adopted: February 12, 2004 Released: February 19, 2004
3. The Act defines “telecommunications” as “the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.” “Telecommunications service” is defined as “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.” “Information service” is defined as “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, 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."
Thus both are really providing the same service. Yet why the difference. One of the rulings was the Pulver Free World Dialup, FWD, decision which states:
"22. We find that even if some form of an end-to-end analysis were deemed applicable to FWD, FWD would be considered an interstate information service in accordance with our “mixed use” doctrine. Where separating interstate traffic from intrastate traffic is impossible or impractical, the Commission has declared such traffic to be interstate in nature. Based on the record in this proceeding, it is evident that it is impossible or impractical to attempt to separate FWD into interstate and intrastate components. This “impossibility” results from the global portability feature of an FWD member’s unique identification number, enabling that member to initiate and receive on-line communications from anywhere in the world where it can access the Internet via a broadband connection. Moreover, FWD’s technology does not enable Pulver to determine the actual physical location of an underlying IP address. Finally, it is evident that more than a de minimus amount of FWD’s offering is interstate. Therefore, we would analogize the FWD offering to those previously deemed exclusively interstate by the Commission where it has applied its “mixed use” rule."
Thus the FWD decision allowed the door to open for the VOIP types of services. Convlved reasoning, yes, but it is the FCC.
Now the next decision was the Vonage Decision. It consists as follows:
"FCC 06-94 REPORT AND ORDER AND NOTICE OF PROPOSED RULEMAKING; Adopted: June 21, 2006 Released: June 27, 2006
14. On November 9, 2004, the Commission adopted the Vonage Order, in which it preempted an order of the Minnesota Public Utilities Commission (Minnesota Commission) that applied Minnesota’s traditional “telephone company” regulations to Vonage’s DigitalVoice service – an interconnected VoIP service under the definition subsequently adopted by the Commission. Without classifying Vonage’s service as either an “information service” or a “telecommunications service” under the Act, the Commission held that DigitalVoice cannot be separated into interstate and intrastate communications for compliance with Minnesota’s requirements without negating valid federal policies and rules. The Vonage Order made “clear that this Commission, not the state commissions, has the responsibility and obligation to decide whether certain regulations apply to DigitalVoice and other IP-enabled services having the same capabilities.” The Commission further indicated that it intended to “resolve important regulatory matters with respect to IP-enabled services generally, including services such as DigitalVoice, concerning issues such as the Universal Service Fund” in the IP-Enabled Services proceeding.
15. Since the Vonage Order, the Commission twice has adopted regulations for certain provider of IP-enabled services. On May 19, 2005, the Commission adopted its first Report and Order – the VoIP 911 Order – in the IP-Enabled Services proceeding. In that order, the Commission defined a particular category of IP-enabled services – “interconnected VoIP services” – as services that (1) enable real-time, two-way voice communications; (2) require a broadband connection from the user’s location; (3) require IP-compatible customer premises equipment; and (4) permit users to receive calls from and terminate calls to the PSTN. Declining to determine the statutory classification of interconnected VoIP services at that time, the Commission asserted its ancillary jurisdiction under Title I of the Act to require interconnected VoIP service providers to supply 911 emergency calling capabilities to their customers. On August 5, 2005, the Commission adopted another order in which it determined that providers of interconnected VoIP services, as defined in the VoIP 911 Order, are subject to the Communications Assistance for Law Enforcement Act (CALEA). The Commission’s decision that CALEA obligations apply to interconnected VoIP services was consistent with the approach taken in the VoIP 911 Order, in that the decision rested in part on the fact that interconnected VoIP services allow customers to originate calls to and receive calls from the PSTN."
This opened the E 911 requirement but in a slow roll manner. It also opened up the CALEA requirement as well. There should be some resolution in equity between these carriers. We see that many rural telephone companies which had survived on interconnection fees as subsidies for rural telephony are being driven out of existence by this simple arbitrage of the CATV company. We have specifically seen companies such as Comcast ruthlessly use this Trojan Horse attack to drive customers to their system, We believe that the Fairpoint collapse was a result of this type of arbitrage. We would like to see the FCC resolve this on some basis of equality. Clearly the Universal Service Fee is a tax and should frankly be eliminated as should the FCC Line Charges. The E 911 should be the same for all.
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