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Misunderstanding the fundamentals of telecom reform


By Scott Bradner, Network World, 09/26/05


In mid-September the House Energy and Commerce Committee took its first shot at trying to set the ground rules for telecom reform. The committee was apparently trying to produce a more balanced starting point than the strongly pro-carrier bill proposed by Sen. John Ensign (R-Nev.). (See my earlier column, Making Verizon giddy)


Three Republicans and two Democrats spearheaded the effort, which succeeds in being a bit less of an incumbent local exchange carrier rescue plan than Ensign's proposal. But the bipartisan plan does get some of the basics wrong, so it is too soon to tell whether something helpful will result.


The new document is a staff discussion draft and, I hope, will undergo significant modification before it is formally introduced. This draft proposes federal regulation of broadband data and video providers and of VoIP providers that would preempt any state or local regulations. But the definitions in the draft are somewhat funny. It says, "broadband Internet transmission service" (BITS) is a service that offers "the transmission of information in a packet-based protocol, including TCP/IP protocol or a successor protocol, regardless of facilities used." Likewise, a "broadband video service" is one that offers a "two-way, interactive service," with or without fee, to the public "regardless of the facilities used" and "integrates, on a real-time and subscriber customizable basis, a video programming package" and "integrates the capability to access Internet content of the subscriber's choosing. The draft also defines a "VoIP service" to be a "packet-switched voice communications service . . . effectively available directly to the public, regardless of the facilities used; and enables a subscriber to send or receive voice communications . . . over a broadband transmission service to or from any subscriber with a telephone number . . . or other identification method as designated by the commission."


The draft would require all BITS, broadband video and VoIP service providers to register with the government before they could offer service (there is a grace period for providers already in business).


What's wrong with this picture? Note that none of the definitions require a facilities-based service provider. All of these services can be offered over any infrastructure that supports IP. In theory, service providers anywhere in the world could provide them all, as long as there is sufficient bandwidth in the communications path. The draft does not seem to understand this basic feature of the Internet.


Also, the U.S. has never required registration of Internet-based service providers, and such a move would have a big, and negative, impact on service innovation. Based on the current wording, Apple would have to register in order to provide iChat service.


The draft does have good words about BITS providers not getting in the way of subscribers' use of the Internet. It also warns not to "block, impair, or interfere with the offering of, access to, or use of" Internet content or services and specifically permits governments to offer these services to the public as long as they follow the same rules as commercial providers.


If the House staff ever figures out how the Internet works and redoes the draft to separate regulation of physical plant from regulating - where actually required - services that use that physical plant, we might get somewhere.


Disclaimer: Harvard has schools that debate the need or non-need for regulations, but I did not ask them about this article. So the above separation plea is my own.


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