Federal Communications Commission

“ Traditionally, transmission capacity has been offered for discrete services, such as telephone service. With the incorporation of digital technology into the telephone network and the inclusion of computer processing capabilities into both terminal equipment located in the customer's premises and the equipment making up a firm's "network," this is no longer the case. Telecommunications service is no longer just "plain old telephone service" to the user. A subscriber may use telephone service to transmit voice or data. ”

“ We disagree with the first argument that an artificial distinction is made between voice and data services, or that we are imposing such a separation. The incorporation of voice and data transmission capabilities into the network is inherent in the basic service category. ”

“ While one may be a common carrier even though the nature of the service offered is of use to only a segment of the population, NARUC I, 525 F.2d at 641, "... a carrier will not be a common carrier where its practice is to make individualized decisions, in particular cases, whether and on what terms to deal." ”

“ To the extent services must be so structured there is a corresponding inability to fully tailor services to consumer needs. This has the result of artificially restricting the supply of services provided over the telecommunications network. In the final analysis both individual consumers and society in general bear unnecessary costs where such limitations exist. This becomes even more troublesome as new markets for enhanced services open and new services open up. ”

“ Finally, the nature of enhanced services and their market underscores the reasonableness of our decision. As indicated, we do not believe these are communications common carrier services within the meaning of Title II. We acknowledge, of course, the existence of a communications component. And we recognize that some enhanced services may do some of the same things that regulated communications services did in the past. On the other side, however, is the substantial data processing component in all these services. We never have imposed a scheme of regulation over data processing. ”

“ The former recognizes the fact that the potential for new and innovative services is merely a factor of the technical parameters of the computer equipment and the associated applications programs employed; the latter is a consequence of our Resale decision which subjected resale entities providing communications services to Title II regulation, but not vendors of data processing services. The interaction of the implicit requirement to avoid crossing the regulatory boundary and the competitive nature of the enhanced service market is crucial. ”

“ Because the universe of terminals that can communicate with one another is larger where such capabilities are offered, arguments can be made that these functions should be allowed as part of a communications service. We have weighed the relative merits of permitting code and protocol conversion as part of a basic service and affirm our determination in the Tentative Decision, at para. 69, that these capabilities are more appropriately associated with the provision of enhanced services. ”

“ Even this definition of common carriage cannot be readily applied to vendors of enhanced services. Inherent in the offering of enhanced services is the ability of service providers to custom tailor their offerings to the particularized needs of their individual customers. Thus, such services can vary from customer to customer as "individualized decisions" are made as to how best to accommodate the processing needs of their various subscribers. ”

“ As a result, the computer industry and the communications industry are becoming more and more interwoven. We believe, and the record shows, that this trend will become even more pronounced in the future. As it does, an increasing number of enhanced services will be developed to meet the need of the marketplace. ”

“ We expect the competitive environment within which data processing services are now being offered to result in substantial public benefit by making available to the public, at reasonable charges, a wider range of existing and new data processing services. We believe that these expectations will continue to be realized in the free give-and-take of the market place without the need for and possible burden of rules, regulations and licensing requirements. ”

“ Regulation also would disserve the interest of consumers and the goals of the Communications Act. Expansion of regulation to cover or threaten to cover services and vendors that have not been regulated can not be sustained in the absence of an overriding statutory purpose. Even the continuation of regulatory policies when the justification for them no longer exists can not be sustained. ”

“ More and more the thrust is for carriers to provide bandwidth or data rate capacity adequate to accommodate a subscriber's communications needs, regardless of whether subscribers use it for voice, data, video, facsimile, or other forms of transmission. ”

“ One result may be an indirect forcing of currently unregulated entities to acquire common carrier status in order to obtain the same degree of flexibility afforded a resale common carrier." Id. We perceive that the impetus for this to happen will increase as the computer processing applications and technologies continue to evolve and grow. In addition to increasing the scope of Commission regulation, the specter of potential regulation may impose artificial barriers to entry. Here also, this effect may grow in significance as technology advances. ”

“ Finally, this structure creates the proper economic incentives for vendors to segregate their services such that consumers need pay only for those services necessary for their own information processing requirements. ”

“ Accordingly, it is consistent with the Tentative Decision to refer to services that would fall within the voice and BNV categories as "basic" transmission services. Likewise, the ENV category was intended to encompass those computer offerings which are more than basic services, and it included both voice and data applications. The "non-voice" designation was given to the category to include human-to-computer services and make clear that such services were not "voice" services because of any voice synthesis or speech recognition capabilities. ”

“ Because the communications/data processing boundary was being examined in this proceeding, the regulation of resale entities under Title II was contingent on the regulatory framework established here. See n. 42, supra. Accordingly, the prospect that some currently regulated resale entities might no longer be regulated under Title II has been recognized for some time.
77 F.C.C.2d 384, 434 129. In our judgment, regulation of enhanced communications services would limit the kinds of services an unregulated vendor could offer, restricting this fast-moving, competitive market. ”

“ At the same time, we recognize certain inadequacies of any definition of common carriage which is dependent entirely on the intentions of a service provider. Instead, as the Court's opinion in NARUC I acknowledges, an element which must also be considered is any agency determination to impose a legal compulsion to serve indifferently. ”

“ See para. 107 supra. Such proceedings also could consume a very significant proportion of the resources of this agency. The requirement to devote significant resources to try to make individual service distinctions would necessarily reduce the resources available
77 F.C.C.2d 384, 435 for regulating basic services and ensuring non-discriminatory access to common carrier telecommunications facilities. ”