Harold Feld has an interesting response to Bob Quinn’s recent Pickett’s Charge blog post. While Harold makes a number of points, I want to focus on one in particular. Under the heading of “Argument #2,” he raises questions about what other services might be pulled into the kind of classification analysis that his Fantasy Baseball version of the FCC is engaged in.
For purposes of fantasy competition only, let’s assume that Harold is right and just “Because all Information Services are Delivered Via Telecommunications, Classifying Broadband Access as a Telecommunications Service Would [Not] Require Classifying Facebook and Akamai as Telecommunications Services.” Perhaps Harold is right that the FCC’s channeling of Justice Scalia will not result in reclassification of all information services as mixed information and telecommunications services. Under Scalia’s reasoning, there might be services where the “telecommunications component” does not seem like a separately identifiable part of the offer (to a discerning regulator).
At the same time, the FCC probably cannot fire a magic bullet that affects the classification only of Internet access services. There are three kinds of services that I’m particularly interested in here. The first is the category that we at AT&T think of as “emerging devices.” Things like e-readers, navigation devices, wireless picture frames (the list could go on and on). Users of these services and devices do not purchase wireless data services from traditional wireless providers. Instead, their service provider bundles end-to-end wholesale data transport services (including the user’s “last mile”) with their own server infrastructure to provide each particular service.
Under the FCC’s prior understanding, where information and telecommunications services were mutually exclusive categories, most people would have assumed that such services fell in the information bucket. Now we will all have to consider whether they contain distinct information telecommunications components. Do consumers view these services as including a “transmission component?” Should such services expect to be collateral damage under the proposed approach?
The second category is that of content providers that bundle slightly less extensive transmission with their content and sell the bundle to consumers. Netflix is probably the most prominent example. There is pretty clearly a transmission component to their delivery of video content, though not “end-to-end” transmission (which has never been a prerequisite for regulation under Title II). Does that transmission component, in Scalia’s words, “still possess sufficient identity to be described as [a separate object] of the offer?”
The third category is comprised of services that the FCC has studiously avoided classifying for almost as long as I’ve been in this league – i.e., voice over IP services.
While there may be some VoIP applications that ride completely on top of transmission components obtained separately from third parties, there are many that include bundled transmission capabilities. Most importantly, all VoIP services that interconnect with the public switched telephone network (PSTN) — such as Vonage, Skype-in, and Skype-out — include such capabilities. VoIP providers typically obtain these transmission inputs at wholesale from competitive local exchange carriers, or CLECs. On these, I fear I have a pretty good idea of how things will turn out.
Like Harold, I look forward to the start of the regular season. But, in the meantime, let’s enjoy the fantasy league; where getting things wrong doesn’t affect anyone’s business plan, investment and jobs.