The FCC Chairman has proposed reclassifying ISPs as common carriers under Title II. Wait, what does that mean? Jonathan explains.
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Welcome to tech Stuff, a production from I Heart Radio. Hey there, and welcome to tech Stuff. I'm your host, Jonathan Strickland. I'm an executive producer with iHeart Radio and a love of all things tech. It's time for a text Stuff classic episode. This episode originally published on February nine, two thousand fifteen. It is titled what is a Common Carrier. When we did this episode, it was when there were discussions among politicians and the Federal Communications Commission in the United States the FCC, about classifying internet service as a common carrier, and so we made this episode in order to kind of talk about what that means and what would imply should internet service be classified that way. Things changed dramatically in the following presidential administration after and now we're seeing them change again. So still relevant. So let's listen to this classic episode What is a Common Carrier? So I thought I would explain what common carriers are in general, how have they apply to the Internet or don't apply up till now anyway, and how this might change things in the future, and also just to clear up some misconceptions about the whole thing. So first, in the United States, the term common carrier is a legal definition that means an individual, a company, or a public utility like municipal buses, which is in the regular business of transporting people and or freight. And that's distinguished from a private carrier, which only transports occasionally or as a one time only event. So it originally referred to a physical conveyance of carrying people or cargo from one place to another. In fact, in the United States, this was first put into law in the Inner State Commerce Act of eight seven, which regulated the railroads. Other countries have had similar policies dating back hundreds of years. Some of them are formally put down into law, some are just simple traditions that have held over over the course of time. But over time the definition here in the United States has expended to cover services that carry more than uh these physical things. They can carry intangible things like voice communication. Now one of the most important facets of common carriers is that they are not allowed to discriminate against passengers or cargo. They're legally bound to carry all of them as long as there's enough capacity. Uh. They also have to have the fee to carry the passenger or freight to be paid. I mean that that has to happen too, so they don't do it for free. Uh and as long as there are no reasonable grounds to deny entry. So in other words, let's have an example. Let's say there's a city bus with plenty of seats available. That bus would not be allowed under common carriage laws to refuse service to a person who has bus fair unless the bus driver had reasonable grounds to deny entry. So let's say that the person who wants to get on the bus is waving around a huge club and singing Beach Boys songs at the top of his lungs. That you probably wouldn't think that guy is safe to let onto your bus. You might be able to argue those are reasonable grounds to deny entry. However, assuming that that person waiting for the bus has shows no reason why you would deny him or her entry, you have to let that person on by the rules of common carriage. Another important element is that common carriers are expected to charge what is called a reasonable price, sometimes a just and reasonable price for their services. So this really means a common carrier can't charge one person more than another person for no good reason. Now, there aren't good reasons to charge different amounts in specific examples. So let's say you are a freight company, for example, and you're hired to transport hazardous materials. That could justify a higher transportation fee for that particular job because it comes with greater risk than what it would normally be for you know, regular cargo. So there are exceptions. But otherwise you couldn't say I'm going to charge everyone in this town one price to ride on my train, but everyone in this other town has to pay this other price only because I hate that town, so that town has everyone there has to pay me more as I don't want them on my train. Otherwise that would not be allowed, so let's move ahead. In nineteen ten, seven Act was modified so that it also covered telegraph and the burgeoning telephone companies. One of the issues customers faced in those early days was a lack of assurance that their telegraph messages would actually get through to their intended destinations. So some companies were charging extra fees to in sure that the message would be repeated all the way down to the end of the line. Now courts decided that that was an unfair practice. That a customer has a reasonable expectation that a service provider will actually provide the service that was paid for and should the customers shouldn't be charged extra just to be certain of it. Moreover, it should be on service providers to prove they are doing their job, rather than the burden being on customers to prove that the providers are falling short. Because the providers are privy to all the information, so they should be the ones who had the responsibility to prove that they're doing what they say they're doing. And another issue was the fact that the telephone system in the United States was effectively a monopoly. Bell Telephone, which became a T and T in eight five, got a headstart on other companies and laid on infrastructure that only worked with the phones made by Western Electric. So you have this partnership between Bell Telephone and Western Electric, which effectively meant they were the only players in town. If you were an independent uh telephone service company, your phones would not work on the Bell Telephone infrastructure, so that edged out competitors, and in nineteen thirteen, Bell Telephone in the US Justice Department worked out a deal to limit Bell from scooping up independent competing companies and from preventing other competitors from using Bell's long distance lines they were allowed to use Bells network. This was in response to an antitrust lawsuit that was being brought against Bell Telephone, and in order to head it off, Bell Telephone said, you know what, we're going to change these policies we've had so that you don't sue us. And it worked and the value of the service was considered to be too important to allow unregulated control of it. So that's where we started seeing some regulation enter into the telephone industry. Now, there's a series of tech Stuff podcasts about the history of A T and T in which Lauren Voege, Obama and I explored how A T and T came about and how it was split up more than once due to concerns like these. If you are interested in that, you should go check out those episodes. Now, getting back to the telephone industry as a whole, in nineteen thirty four, Congress pass the Communications Act, which created the Federal Communications Commission, which oversaw radio transmissions as well as telecommunications. So this is what established the Title two that the FCC refers to today when it comes to I s p s. They talked about reclassifying I s p s under Title two. This is the Act that classified telephone systems as common carriers. It's been amended several times over the following decades, including extensive alterations that were made during the Telecommunications Act of nineteen nine six. So let's move on to transmitting computer data over networks. In nineteen seventies and nineteen eighties, before most people knew about a network of networks. You know, our bonnet was a thing. Internet was becoming a thing, but most people didn't know about it. The common way to connect to a computer was to use a modem for direct machine to machine connection over the telephone system. So you would have a dial up modem and you would use it to dial a phone number. The computer on the other end would essentially answer the phone, and then you would have computer to computer communication. But it wasn't an Internet, right, It wasn't a network of networks. It was the machine to machine communication. Regular computer data was considered a transmission service and fell under titled two, which meant that any any transmission service cannot be prioritized, it can't be discriminated against. It all has to be treated equally. But there were specific services companies provided in which you could connect to a computer to get a get particular information like a weather report or stock information or sports scores, things like that. These were considered to be enhanced services, so this was classified under Title one of the Communications Act, which is unregulated. So the transmission was regulated, but these specific services were unregulated. The enhanced services didn't fall under common carriage terms. Companies could charge a fee for customers to use them that would be on top of any phone bill for use of the transmission lines themselves. Okay, so let's say a phone company offers up its own enhanced service and some other company offers a competing enhanced service. The transmission of data falls under common carriage, which means that phone company could not prevent customers from accessing the competitors enhanced service. That would be unfair. So this is the beginning of the concept of net neutrality. The Telecommunications Act redefined enhanced services as information services and also ratify the differences between transmission services information services, putting into policy what the FCC had sort of made up as it went along, so the transmission of services met the terms of common carriage. The telephone company treated all dial up services the same, all had equal access under the system, the actual services, the apps that people were accessing, those were enhanced or information services. We'll be back with more about common carriers after these brief messages. That's not confusing enough, Let's move into the early era of broadband. This is when we start seeing dial up modems fade away and DSL began to arrive. Now, the FCC continued to apply that distinctions made during the telephone era. The phone companies would have to carry DSL signals as common carriage. They couldn't discriminate against them. The apps are services running on the DSL connections were unregulated information services. And then we get to two thousand two. Now, this is when cable TV companies began offering transmission services of Internet data at high speeds, at least relative to dial up speeds at any rate. And this is where things get muddy. See the FCC classified cable broadband service under Title one, not titled two. That means both the transmission of data over cable and the information services provided would be unregulated. There will be no reason for regulation there because it's all under Title one. So why not treat cable transmission of data the same way as the telephone system largely comes down to politics. At this time, Republicans had a majority in government and they favored deregulation. And the reasons for favoring deregulation was that they thought it was going to promote risk taking and competition and innovation. The in reality, that's not necessarily the case. I mean, if you look at the Bell telephone system story, that kind of shows what happens with deregulation, and it required the government to actually come in and intervene in order to avoid a monopoly that could completely take advantage of customers. Well, in two thousand five, the f c C said that DSL would also be reclassified under Title one, So this makes the the whole situation even more complicated. Telephone systems are still titled too, but DSL and cable are now Title one and are unregulated. Now this meant that cable and DSL companies wouldn't have to ask permission to incorporate fast lanes for the Internet, so they could give preferential treatment to some customers over others for a fee. And because Title one is unregulated, there also was no fear of the FCC butting in should a cable or DSL company block data they didn't want to carry, such as data from a competitor or from torrent sites. So, you know, we talked earlier about the common carriers. You know, one of the defining factors is that they cannot refuse service as long as a person is able to pay the fee. If it's a Title one, it's not a common carrier, and so it can deny service. So if you own the transmission lines and you have a content provider like YouTube, and you think, I've got my own content provider program where people users can upload video, and I don't want to. I don't want to compete against YouTube because YouTube is gonna is gonna make my tool obsolete. I'm just not gonna allow YouTube to go across my transmission lines. Technically, you could do that under Title one, because there's no you're not a common carrier. You're not You're not obligated to carry all legal information. Beyond that, there was no requirement for cable companies to provide services for a quote just and reasonable fee end quote. They could charge whatever they wanted. So in two thousand and eight things came to a head. The FCC find Comcast because Comcast had blocked peer to peer traffic through bit torrent. Now, first we have to keep in mind there's nothing inherently illegal or immoral or unethical about bit torrent. There's nothing wrong with the technology. It's a method of data transmission that works well for large files. Peer to peer is great if you're trying to move a huge amount of information in a relatively short amount of time. Now, some of those files were pired in material. They were illegal files, and there were plenty of huge files that were legal. They should have been able to transmit freely. But because bit torrent was being seen as the pirate tool, Comcast blocked it. So the FCC gets involved, and the FEC says to Comcast, hey, you can't do that. You can't just block this stuff just because you don't like some of the activity that's going on over there. And Comcast responds with I'm sure we can. We're not common carriers were classified under Title one, not Title two. And the FCC says uh, And it goes to court and the courts end up agreeing ultimately with Comcast. The FCC doesn't have the authority to regulate cable companies because they're classified as Title one not Titled two. So that's why there's now this move to reclass VI I s p s under Title two instead of Title one. So the argument for reclassification is that it will require I sps to play fairly with content providers and with customers. The companies will have to adhere to the rules of Title two and will come under the regulation of the f c C. So a company like Comcast, which isn't just a transmission service provider but is also a content provider, can't favor its own services at the expense of others. However, even in this proposal, FCC Chairman Wheeler has suggested that the FCC would forbear or waive certain elements of Title Too not directly associated with net neutrality, which includes the requirement to share networks and on rate regulations. So while cable companies wouldn't be able to block legal content or prioritize traffic for sites for a price, they could totally continue to charge customers whatever they like for their services. So some people object to reclassifying I s p s as Titled too. Like the cable companies, they really object to it now. They say that if the cable companies are real or I s p s or reclassified as title to the Internet, will become heavily regulated uh and innovation will be stifled. But the flip side of this is that it will be a fair playing ground. So if we had access to lots of competitors in the I s P space for service, I wouldn't be really concerned about deregulation because we could always switch providers if we didn't like the service, if we felt they were being unfair, we could look to a competitor, and in fact, that competition could drive everyone to being as fair as possible so that they didn't run off their customers. But the truth of the matter is that many people, including myself, have very limited choices when it comes to I s p s. In some cases, there's no choice at all. You have one option. You either go with this company or you don't have internet. That's a problem with dealing with an effective and pie. The consumer loses out. And the cable industry claims that this regulation is going to discourage those companies from investing in infrastructure because it will hurt revenue to have regulation. They said that if the government determines how much money we're able to make, then there's no reason for us to try and innovate and build out our infrastructures. On the other hand, it encourages new players in the space like Google Fiber, which is investing huge amounts to bring broadband speeds to households in certain markets. So if the cable companies wish to keep their customers, they'll have to compete with the newcomers, which means that it does encourage investment in infrastructure, it just means lower profits. That's really what these big companies are afraid of. So they either continue to compete by building out this infrastructure or they get out of the game entirely, which I don't think is a likely outcome now. As for excessive regulation, I don't diticipate that being a huge problem. I think we're more likely to see the FCC watching to make sure cable companies follow the rules under title two should that reclassification actually happen. That wraps up that classic episode about common carriers. Hope you found that informative and interesting. If you have suggestions for topics that we should cover on future episodes of Tech Stuff, please reach out to me on Twitter. The handle for the show is tech Stuff hs W and I'll talk to you again really soon. Text Stuff is an I heart Radio production. 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