B
Baphomet
Guest
New York Times
F.C.C. Begins Rewriting Rules on Delivery of the Internet
February 13, 2004
By STEPHEN LABATON
WASHINGTON, Feb. 12 - Homes could start being connected to
the Internet through electrical outlets, and consumers and
business may find it easier to make cheaper telephone calls
online under new rules that the Federal Communications
Commission began preparing on Thursday.
Taken together, the new rules could profoundly affect the
architecture of the Internet and the services it provides.
They also have enormous implications for consumers, the
telephone and energy industries, and equipment
manufacturers.
Michael K. Powell, the F.C.C. chairman, and his two
Republican colleagues on the five-member commission said
the twin moves, and a separate 4-to-1 vote Thursday to
allow a small company providing computer-to-computer phone
connections to operate under different rules from ordinary
phone companies, would ultimately transform the
telecommunications industry and the Internet.
"This is a reflection of the commission's commitment to
bring tomorrow's technology to consumers today," Mr. Powell
said. He added that the rules governing the new phone
services sought to make them as widely available as e-mail,
and possibly much less expensive than traditional phones,
given their lower regulatory costs.
At the same time, once the rules allowing delivery of the
Internet through power lines are completed, companies could
provide consumers with the ability to plug their modems
directly into wall sockets just as they do with a toaster,
desk lamp or refrigerator.
Under the new rules, expected to be completed in coming
months, electric utilities could offer an alternative to
the cable and phone companies and provide an enormous
possible benefit to rural communities which are served by
the power grid but not by broadband providers. A number of
utility companies have been running trials offering
high-speed Internet service through their transmission
lines.
While the technology has been developed, it is not clear if
such a service would be profitable or able to compete in
markets dominated by cable and telephone companies. But
F.C.C. officials noted that the vast majority of the
nation's households did not yet have high-speed Internet
service, leaving the market wide open to rivals.
In the phone proceedings on Thursday, a majority of the
commissioners suggested that new Internet phone services
should have significantly fewer regulatory burdens than
traditional telephone carriers.
The commissioners also voted 4 to 1 to approve the
application of a small Internet company, Pulver.com, ruling
that its service of providing computer-to-computer phone
service, called Free World Dialup, should not make it
subject to the same regulations and access charges as the
phone carriers.
Industry experts say that neither the phone service nor the
broadband delivery systems offered by electric utilities
would make sizable inroads for at least the next two years.
But in moving forward with the new regulations, they said
the F.C.C. was reducing regulatory uncertainty and
encouraging major companies and investors to put lots of
money into the new technologies to enable them to move to
market more quickly.
A number of companies, including giants like Time Warner
and AT&T, have recently announced plans to get into the
business of delivering "voice over Internet" telephone
services through cable television and phone connections.
Kathleen Q. Abernathy, a Republican commissioner, said the
nation "stands at the threshold of a profound
transformation of the telecommunications marketplace" as
more companies move from traditional circuit-switching
phone technology to Internet-based delivery systems.
But a Democratic appointee, Michael J. Copps, raised
objections to the Pulver petition and questioned the
underlying themes of deregulation in the two rule-making
proceedings. He said they had set the agency on a course
that could effectively rewrite the Telecommunications Act
of 1996 and make it easier for the leading phone companies
to escape needed regulation.
Mr. Copps also criticized the majority of the commission
for rejecting a request by law enforcement agencies that
the F.C.C. first work out the legal and technical problems
in monitoring phone calls over the Internet before moving
ahead.
"I believe it is reckless to proceed and I cannot support
this decision at this time," he said of the Pulver
application. "The majority apparently prefers to act now
and fix law enforcement issues later - along with universal
service, public safety, disability access and a host of
other policies we are only beginning to address.''
Mr. Powell replied pointedly to Mr. Copps's criticism,
arguing that it was time for the commission to offer a new
deregulatory climate that the old phone companies may seek
to take advantage of along with their competitors. "The
Telecommunications Act is nine years old,'' he said, "and
it is being rewritten by technology."
The decision to begin writing rules for Internet-based
phone services was hailed by major manufacturers of
Internet and telephone equipment and by some of the largest
phone carriers, which are preparing to offer Internet-based
phone services of their own.
" Verizon strongly agrees that the F.C.C. should move
forward quickly to apply a light touch in regulating true
voice-over-the-Internet services and should not burden this
new technology with the same economic regulations that
apply to the traditional phone network," the company, which
is based in New York, said in a statement on Thursday
afternoon.
Another big regional Bell company, SBC Communications of
San Antonio, said it was "excited about the opportunities
this will give us to deliver new services to customers in
this dynamic, swift-moving industry."
Still, thorny regulatory issues remain. Foremost among them
is the web of fees that the new service providers will have
to pay to traditional phone carriers for making the
connection between their customers and the Internet
telephone customers. Interconnection and access charges in
the telephone industry have long been the source of fierce
adversarial lobbying by the local and long-distance
carriers; the new technology raises complex and arcane
issues that will ultimately have a vast role in the
profitability of the new services.
In recent months, lawyers representing both the large and
small phone companies have been holding unpublicized
meetings and negotiations in an effort to come up with a
new fee system. The effort, if successful, could relieve
the commission of the burden of developing a new way of
paying to support the essential features of the telephone
system.
The F.C.C. has heard complaints from officials at law
enforcement agencies who say they have encountered
technical and legal difficulties monitoring terrorist and
criminal suspects who make use of the new services.
Commission officials said they planned to begin considering
rules soon that would preserve the ability of the law
enforcement agencies both to carry out surveillance orders
and to have the companies pay the often expensive costs of
making their systems available to monitoring.
F.C.C. Begins Rewriting Rules on Delivery of the Internet
February 13, 2004
By STEPHEN LABATON
WASHINGTON, Feb. 12 - Homes could start being connected to
the Internet through electrical outlets, and consumers and
business may find it easier to make cheaper telephone calls
online under new rules that the Federal Communications
Commission began preparing on Thursday.
Taken together, the new rules could profoundly affect the
architecture of the Internet and the services it provides.
They also have enormous implications for consumers, the
telephone and energy industries, and equipment
manufacturers.
Michael K. Powell, the F.C.C. chairman, and his two
Republican colleagues on the five-member commission said
the twin moves, and a separate 4-to-1 vote Thursday to
allow a small company providing computer-to-computer phone
connections to operate under different rules from ordinary
phone companies, would ultimately transform the
telecommunications industry and the Internet.
"This is a reflection of the commission's commitment to
bring tomorrow's technology to consumers today," Mr. Powell
said. He added that the rules governing the new phone
services sought to make them as widely available as e-mail,
and possibly much less expensive than traditional phones,
given their lower regulatory costs.
At the same time, once the rules allowing delivery of the
Internet through power lines are completed, companies could
provide consumers with the ability to plug their modems
directly into wall sockets just as they do with a toaster,
desk lamp or refrigerator.
Under the new rules, expected to be completed in coming
months, electric utilities could offer an alternative to
the cable and phone companies and provide an enormous
possible benefit to rural communities which are served by
the power grid but not by broadband providers. A number of
utility companies have been running trials offering
high-speed Internet service through their transmission
lines.
While the technology has been developed, it is not clear if
such a service would be profitable or able to compete in
markets dominated by cable and telephone companies. But
F.C.C. officials noted that the vast majority of the
nation's households did not yet have high-speed Internet
service, leaving the market wide open to rivals.
In the phone proceedings on Thursday, a majority of the
commissioners suggested that new Internet phone services
should have significantly fewer regulatory burdens than
traditional telephone carriers.
The commissioners also voted 4 to 1 to approve the
application of a small Internet company, Pulver.com, ruling
that its service of providing computer-to-computer phone
service, called Free World Dialup, should not make it
subject to the same regulations and access charges as the
phone carriers.
Industry experts say that neither the phone service nor the
broadband delivery systems offered by electric utilities
would make sizable inroads for at least the next two years.
But in moving forward with the new regulations, they said
the F.C.C. was reducing regulatory uncertainty and
encouraging major companies and investors to put lots of
money into the new technologies to enable them to move to
market more quickly.
A number of companies, including giants like Time Warner
and AT&T, have recently announced plans to get into the
business of delivering "voice over Internet" telephone
services through cable television and phone connections.
Kathleen Q. Abernathy, a Republican commissioner, said the
nation "stands at the threshold of a profound
transformation of the telecommunications marketplace" as
more companies move from traditional circuit-switching
phone technology to Internet-based delivery systems.
But a Democratic appointee, Michael J. Copps, raised
objections to the Pulver petition and questioned the
underlying themes of deregulation in the two rule-making
proceedings. He said they had set the agency on a course
that could effectively rewrite the Telecommunications Act
of 1996 and make it easier for the leading phone companies
to escape needed regulation.
Mr. Copps also criticized the majority of the commission
for rejecting a request by law enforcement agencies that
the F.C.C. first work out the legal and technical problems
in monitoring phone calls over the Internet before moving
ahead.
"I believe it is reckless to proceed and I cannot support
this decision at this time," he said of the Pulver
application. "The majority apparently prefers to act now
and fix law enforcement issues later - along with universal
service, public safety, disability access and a host of
other policies we are only beginning to address.''
Mr. Powell replied pointedly to Mr. Copps's criticism,
arguing that it was time for the commission to offer a new
deregulatory climate that the old phone companies may seek
to take advantage of along with their competitors. "The
Telecommunications Act is nine years old,'' he said, "and
it is being rewritten by technology."
The decision to begin writing rules for Internet-based
phone services was hailed by major manufacturers of
Internet and telephone equipment and by some of the largest
phone carriers, which are preparing to offer Internet-based
phone services of their own.
" Verizon strongly agrees that the F.C.C. should move
forward quickly to apply a light touch in regulating true
voice-over-the-Internet services and should not burden this
new technology with the same economic regulations that
apply to the traditional phone network," the company, which
is based in New York, said in a statement on Thursday
afternoon.
Another big regional Bell company, SBC Communications of
San Antonio, said it was "excited about the opportunities
this will give us to deliver new services to customers in
this dynamic, swift-moving industry."
Still, thorny regulatory issues remain. Foremost among them
is the web of fees that the new service providers will have
to pay to traditional phone carriers for making the
connection between their customers and the Internet
telephone customers. Interconnection and access charges in
the telephone industry have long been the source of fierce
adversarial lobbying by the local and long-distance
carriers; the new technology raises complex and arcane
issues that will ultimately have a vast role in the
profitability of the new services.
In recent months, lawyers representing both the large and
small phone companies have been holding unpublicized
meetings and negotiations in an effort to come up with a
new fee system. The effort, if successful, could relieve
the commission of the burden of developing a new way of
paying to support the essential features of the telephone
system.
The F.C.C. has heard complaints from officials at law
enforcement agencies who say they have encountered
technical and legal difficulties monitoring terrorist and
criminal suspects who make use of the new services.
Commission officials said they planned to begin considering
rules soon that would preserve the ability of the law
enforcement agencies both to carry out surveillance orders
and to have the companies pay the often expensive costs of
making their systems available to monitoring.