January 28, 2004

Redefinition of telecommunications and informational services

In a recent article, Konrad Trope, an attorney argues why we need to reevaluate the definitions for “informational” versus “telecommunications” services. He points out the inconsistency between the decision made by the Ninth Circuit Court of Appeals and a federal district court judge in Minnesota. I do not see the inconsistency.

This is excerpted from his article:

The federal courts are split on the issue. The Ninth Circuit Court of Appeals, on Oct. 6, 2003, classified cable operators as providing "telecommunications" services as defined in the Communications Act, when Internet access is involved. Thus, cable operators would be subject to FCC regulations that affect telecommunications companies.

Then on October 16, a federal district court judge in Minnesota ruled to the contrary and declared that Vonage, a VoIP service provider, is an information service provider. The court noted "Congress's mandate that the Internet remain unfettered by regulation."

I submit that there is no inconsistency. There is a difference between providing infrastructure service and an application service. Infrastructure service is capital intensive with a high barrier for entry. So there can be only a handful of such providers and it is usually very difficult for subscribers to change their service provider. This is not the case for applications. Usually the application is strictly end-to-end, requiring only network connectivity from the infrastructure provider. Even when a service provider is used, it is easy and undisruptive to change the service provider. This is the rationale for supporting regulation for infrastructure providers but keeping the application service providers’ regulation free. Earlier, I had argued that even telecom regulatory regime follows this line of thinking.

There are two regulatory news items that are of related interest. Recently, Telecom Regulatory Authority of India issued regulation on Quality Of Service for VOIP based International Long Distance Service, stipulating MOS level, end-to-end delay, limit on jitter and packet loss. Their focus is on the service providers who offer PSTN interconnectivity. I guess that is the rationale for their requirements on DTMF tones and data/fax modem support.

In a meeting yesterday California regulators and some of the VoIP service providers toned down their respective stance on regulating this industry. The regulators are willing to consider a lighter touch as long as 911 service and Universal Fund issues are addressed; the service providers are willing to go along as long as competitive environment is fostered. But Jon Arnold of Frost&Sullivan believes that facilities-based carriers have better chance of survival than “pure play” service providers because “aside from having deep pockets, they will counter with a more reliable offering that travels over their own managed networks rather than the "best efforts" public Internet.”

Posted by aswath at January 28, 2004 01:36 PM
Related Posts Widget for Blogs by LinkWithin
If you do not have an OpenID, then please use www.enthinnai.com/unauopenid/anyblog.

 

Comments



Copyright © 2003-2014 Moca Educational Products.