{{Short description|Trio of inquiries as to telephony services}} In the United States, the '''FCC ''Computer'' inquiries''' were a trio of interrelated rulemaking processes and resulting regulations by the Federal Communications Commission (FCC) focused on the convergence of regulated telephony with unregulated computing services. T''he Computer'' inquiries created rules and requirements designed to prevent cross-subsidization, discrimination, and anti-competitive behavior from the Bell Operating Companies (BOCs) entering the enhanced services market.<ref name="Cannon1">{{cite web|last=Cannon|first=Robert|title=Where Internet Service Providers and Telephone Companies Compete: A Guide to the Computer Inquires, Enhanced Service Providers and Information Service Providers|ssrn=274660|work=2001}}</ref>
==Background== In 1966, the FCC was interested in the difference between computers that facilitate communications and computers with which people communicate. The FCC had to make a decision on whether both of these types of computers should be regulated as a basic phone service.<ref name="CannonCI">{{cite web|last=Canon|first=Robert|title=Legacy of the Federal Communications Commission's Computer Inquiries|url=http://law.indiana.edu/fclj/pubs/v55/no2/cannon.pdf|access-date=8 May 2012|archive-url=https://web.archive.org/web/20120508061800/http://law.indiana.edu/fclj/pubs/v55/no2/cannon.pdf|archive-date=2012-05-08|url-status=dead}}</ref> "The task before the FCC was the nature and extent of the regulatory jurisdiction to be applied to data processing services; and whether, under what circumstances, and subject to what conditions or safeguards, common carriers should be permitted to engage in data processing."<ref name="tenative">Reg. and Policy Problems Presented by the Interdependence of Computer and Communications Services, Tentative Decision, 28 FCC2d 291, 18 Rad. Reg.2d (P & F) 1713 (1970).</ref> The FCC launched the inquiries to resolve these questions.<ref name="NOI">In re Regulatory & Policy Problems Presented by the Interdependence of Computer and Communication Services & Facilities, Notice of Inquiry, 7 FCC 2d 11, para. 25 (1966)</ref>
==''Computer I''== In the 1960s, the FCC faced a problem with existing regulated communication networks such as AT&T who offered basic communication service.<ref name=cybertelcom-ci1>{{cite web|title=Computer I (1966)|url=http://www.cybertelecom.org/ci/ci.htm|accessdate=26 May 2012}}</ref> Companies found a way to achieve data processing by adding computers to the ends of these existing networks and layering protocols on top of the network.<ref name="CannonCI" /> These enhancements, if left unregulated, threatened the growth of these services.<ref name="CannonCI" /> In 1970, the FCC made its first attempt at dividing the computer world into two categories: computers that ran communication networks and computers at the end of telephone lines that people interacted.<ref name="CannonCI" /> "The division was technological, focused on computer processing, attempting to divide the difference between circuit or message switching and data processing."<ref name="secondfinal">Second Computer Inquiry, Final Decision, 77 FCC2d 384, para. 19, 47 Rad. Reg.2d (P & F) 669 (1980)</ref> This division by the Commission was either called ''pure communications'' or ''pure data processing''.<ref>Delbert D. Smith, The Interdependence of Computer and Communications Services and Facilities: A Question of Federal Regulation, 1117 U. Pa. L. Rev. 829 (1969). p 203</ref>
If a message is sent from one location to another and it does not change, the FCC defined it as pure communications.<ref name="CannonCI" /> On the other hand, if changes or processing happen at the end of the phone line, the FCC defined it as pure data processing.<ref name="CannonCI" /> In pure data processing, the computer processes the information and determines if it is a circuit or message-switching.<ref name="tenative" /> Also, the computer processes the information by using storing, retrieving, sorting, merging or calculating data functions based on how the computer is programmed.<ref name="tenative" /> Some computer processing, however, uses both pure communication and pure data processing. The FCC was not too sure how to handle these situations and created a third category known as hybrid processing.<ref name="tenative" /> Hybrid cases were considered a gray area, and the FCC planned to resolve these gray services on a case-by-case basis.<ref name="final">Reg. and Policy Problems Presented by the Interdependence of Computer and Communications Services, Final Decision, 28 FCC2d 267, 21 Rad. Reg.2d (P & F) 1561 (1971) p. 31-38</ref> The FCC determined if there is more communications, then it was communications; if it was more data processing, then it was data processing.<ref name="NOI" /> Hybrid cases became the undoing of the ''Computer'' ''I'' regulations, as they did not clearly define pure and data communications.<ref name="CannonCI" />
=== Regulations === The differing treatment of pure communications and pure data processing led to different policy results.<ref name="CannonCI" /> Existing market structure influenced the policy. As the pure data processing market had lower barriers to entry and monopolization risk, the FCC ruled that no additional regulation or safeguards were required.<ref name="CannonCI" /><ref name="cybertelcom">Cybertelecom 2002. Notes: ONA <http://www.cybertelecom.org/notes/ona.htm></ref> The pure communications market, on the other hand, was managed by an incumbent monopoly.<ref name="CannonCI" /> The FCC had four concerns about the incumbent telephone companies: "the sale of data processing services by carriers should not hurt the provision of common carrier services, the costs of such data processing services should not be passed on to telephone rate payers, revenues derived from common carrier services should not be used to cross subsidize data processing services, and the furnishing of such data processing services by carriers should not hurt the competitive computer market."<ref name="final" />
Concerned about shared communication facilities, the FCC developed the "maximum separation" safeguards.<ref name="CannonCI" /> If a carrier wanted to enter the unregulated data processing market, they could only do so through a fully separate subsidiary.<ref name="tenative" /> The separate subsidiary needed to have a separate data processing corporation, accounting books, offices, personnel, equipment, and facilities.<ref name="tenative" /> The carrier also could not use the subsidiary to promote their data processing services, use network computers for non-network purposes, or use network computers during peak hours to provision data processing services.<ref name="final" />
==''Computer II''== {{Main|Second Computer Inquiry}} In 1976, prompted by the number of hybrid cases that used both pure communications and pure data processing, the FCC launched a second inquiry.<ref name="secondtenative">Second Computer Inquiry, Tentative Decision and Further Notice of Inquiry and Rulemaking, 72 FCC2d 358, paras. 6-7, 17, 45 Rad. Reg.2d (P & F) 1485 (1979)</ref> After ''Computer I'' took effect, new technological developments in the telecommunications and computer industries exposed flaws in its definitional structure approach to evaluating the "hybrid category".<ref name="amendment">Amendment of Sections 64.702 of the Comm'n's Rules and Regs. (Third Computer Inquiry), Report and Order, CC Docket No 85-229, 104 F.C.C.2d 958, 60 Rad. Reg.2d (P & F) 603 (1986)</ref> Dumb terminals had become smart, the cost of CPUs dropped, logical networks overlaid physical networks, and microcomputers made their appearance.<ref name="secondfinal"/> The Commission's situation was "more complicated" and eventually led to the birth of the basic versus enhanced services dichotomy.<ref name="secondfinal" /> This established a division between "common carrier transmission services from those computer services which depend on common carrier services in the transmission of information."<ref name="secondfinal" />
===Basic–enhanced services dichotomy=== If a carrier offers a pure transmission over a path that is transparent in terms of its interaction with customer supplied information, the FCC considered it to offer a "basic" service.<ref name="secondfinal" /><ref name="CCvFCC">Computer and Comm. Indus. Ass'n v. FCC, 693 F.2d 198 (D.C. Cir. 1982).</ref> Basic service includes processing the movement of information and computer processing, which includes protocol conversion, security, and memory storage.<ref name="amendment" /> The category includes everything from "voice telephone calls" to a phone company's lease of private lines.<ref name=digitalcrossroad>{{cite book|title=Digital Crossroads American Telecommunications Policy in the Internet Age|year=2007|publisher=MIT Press|location=Cambridge, Massachusetts|isbn=978-0-262-14091-1|pages=[https://archive.org/details/digitalcrossroad00jona/page/151 151–154]|author1=Nuecherlein, Jonathan|author2=Weiser, Philip|url-access=registration|url=https://archive.org/details/digitalcrossroad00jona/page/151}}</ref>
If a carrier offers a service over common carrier transmission facilities that employs computer processing applications that act on the format, content, code, protocol or similar aspects of the subscriber's transmitted information; provides the subscriber additional, different, or restructured information; or involves subscriber interaction with stored information, the FCC considers it an enhanced service.<ref name="digitalcrossroad" /> The Commission found that e-mail, voice mail, the World Wide Web, newsgroups, fax store-and-forward, interactive voice response, gateway, audiotext information services, and protocol processing are enhanced services.<ref name=digitaltornado>{{cite web|last=Werbach|first=Kevin|title=Digital Tornado: The Internet and Telecommunications Policy |url=http://transition.fcc.gov/Bureaus/OPP/working_papers/oppwp29.pdf |archive-url=https://web.archive.org/web/20111019212412/http://transition.fcc.gov/Bureaus/OPP/working_papers/oppwp29.pdf |archive-date=19 October 2011 |accessdate=8 May 2012}}</ref>
The FCC did not want to fall into the same trap as the first inquiry with having a hybrid category and ensure every service is either basic or enhanced. "The Commission made the classification dependent upon the nature of the activity involved."<ref name="secondfinal" /> The nature of the activity involved would determine if it fell into the communications or data processing service.<ref name="secondtenative" /> This changed the process from an examination of the technology to an examination of the service provisioned.<ref name="secondtenative" />
To eliminate the hybrid cases in the basic–enhanced dichotomy, the FCC designed a "bright-line test".<ref name="secondfinal" /> The FCC bright-line test defined enhanced services as anything with more than the transmission capacity of a basic service.<ref name="funding">Establishment of a Funding Mechanism for Interstate Operator Servs. for the Deaf, Memorandum Opinion and Order, 11 F.C.C.R. 6808, 2 Comm. Reg. (P & F) 744 (1996)</ref> A three prong test was also established to test enhanced services.<ref name="funding" /> The three prong test "employs computer processing applications that: act on the format, content, code, protocol or similar aspects of a subscriber's transmitted information; provide the subscriber additional, different, or restructured information; or involve subscriber interaction with stored information."
===Adjunct services=== If a regulated service uses a traditional telephone service and it does not change the fundamental character of the telephone service, the FCC categorized it as an adjunct service.<ref name="USWest">US West Comm., Inc., Petition for Computer III Waiver, Order, 11 F.C.C.R. 1195, 1 para. 2-5 Comm. Reg. (P & F) 1261 (1995)</ref> An example of this would be directory assistance. Providing a phone number is characterized as a basic service, which, regardless of the telephone technology, does not transform it into an enhanced service.<ref name="funding" />
==''Computer III''== In 1985, the FCC launched another rulemaking process in a third ''Computer'' inquiry prior to the deployment of the Internet to the consumer.<ref name="CannonCI" /> ''Computer II'' established the basic and enhanced service dichotomy ''and Computer III'' changed how these services were implemented while keeping policy objectives the same.<ref name="CannonCI" /> ''Computer III'' ensures the separate subsidiary requirements of ''Computer II'' do not have additional costs to the public, e.g., decreased service and innovation by Bell Operating Companies using existing regulated operations to benefit unregulated enhanced services.<ref name="amendment" /> The FCC found that the cost of structural separation outweighed its benefits.<ref name="remandproceeding">{{cite web|last=US Federal Communications Commission|title=Computer III Remand Proceeding: Bell Operating Company Provision of Enhanced Services, CC Docket No. 95-20, CC Docket No. 98-10, Report and Order|url=https://prodnet.www.neca.org/sslappsource/GTR/StreamMediaGtr.asp?fcc9936.pdf|accessdate=8 May 2012}}</ref> The FCC created two non-structural safeguards: the Comparatively Efficient Interconnection (CEI) and the Open Network Architecture (ONA).<ref name="CannonCI" /> BOCs were not required to form separate subsidiaries if they moved from a structural safeguard to non-structural safeguard.<ref name="remandproceeding" />
===Comparatively Efficient Interconnection=== The Comparatively Efficient Interconnection was a temporary solution to allow BOCs to enter the enhanced service market on a non-structural basis.<ref name="CannonCI" /> It allowed an enhanced service provider (ESP) to integrate with the BOC, removing the need for a separate subsidiary.<ref name="remandproceeding" /> The FCC permitted the company to post their CEI plans on the company website.<ref>Computer III Further Remand Proceedings: Bell Operating Co. Provision of Enhanced Servs., Order on Reconsideration, 14 F.C.C.R. 21628, para. 6 Comm. Reg. (P & F) 1344 (1999)</ref> The CEI plan must include "information on interface functionality, unbundling of basic services, resale, technical characteristics, installation, maintenance and repair, end-user access, CEI availability, minimization of transport costs, and recipients of CEI."<ref>Computer III Further Remand Proceedings: Bell Operating Co. Provision of Enhanced Servs., Further Notice of Proposed Rulemaking, 13 F.C.C.R. 6040, para. 4, 15 Comm. Reg. (P & F) 2017 (1998)</ref> The CEI plans were used to make sure that if a BOC provided favorable terms to an affiliated ESP, they would provide the same terms to unaffiliated ESPs.<ref name="CannonCI" /> This was intended to provide ESPs equal access to the basic services that the BOCs use to provide their own enhanced service.<ref name="CannonCI" />
===Open Network Architecture=== The second safeguard that the FCC introduced, which became known as the Open Network Architecture, required BOCs to break their networks into "basic building blocks" and make those available to ESPs for building new enhanced services.<ref name="remandproceeding" /> The BOCs' basic service offerings were broken apart to help the ESP market.<ref name="CannonCI" /> The offerings were divided into Basic Service Elements, Basic Serving Arrangements, Complimentary Network Services, and Ancillary Network Services.<ref name="computer3remand">Computer III Further Remand Proceedings: Bell Operating Company Provision of Enhanced Services; 1998 Biennial Regulatory Review B Review of Computer III and ONA Safeguards and Requirements, Further Notice of Proposed Rulemaking, CC Docket No. 98-10, 13 FCC Rcd 6040 (Jan 30, 1998) Further Notice of Proposed Rulemaking (Jan 30, 1998)</ref> Even if a BOC did not want to enter the ESP market, they were required to file ONA plans with the FCC.<ref>Bell Operating Cos. Joint Petition for Waiver of Computer II Rules, Order, 10 F.C.C.R. 13758, para. 26, 1 Comm. Reg. (P & F) 690 (1995).</ref> Only after filing would BCCs be permitted to provide integrated ESP services without a CEI plan.<ref>BOC's Joint Petition, supra note 87, para. 3.</ref>
===Safeguards=== The ''Computer III'' inquiry provided other safeguards: annual ONA reporting, network information disclosure, cross-subsidization prohibitions, accounting safeguards, and customer proprietary network information.<ref name="cybertelcom" />
====Annual ONA reporting==== In 1989, the FCC created a reporting structure requiring the BOCs to file quarterly, semi-annual, and annual reports for their ONA.<ref name="cybertelcom" /> As of February 2011, to better serve the public interest, the FCC temporarily waived reporting requirements to eliminate added expenses to the BOCs.<ref name="ONA Elimination">{{cite web|last=Gilliett|first=Sharon|title=FCC 11-1392|url=http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-11-1392A1.pdf|accessdate=25 May 2012}}{{Dead link|date=March 2024 |bot=InternetArchiveBot |fix-attempted=yes }}</ref><ref name="ONA Elimination2">{{cite web|last=Cooper|first=Seth L|title=FCC's Elimination of CEI and ONA Rules Long Overdue|date=14 February 2011 |url=https://freestatefoundation.blogspot.com/2011/02/fcc-elimination-of-cei-and-ona-rules.html|accessdate=25 May 2012}}</ref>
====Network information disclosure==== Regulations require public notice by the carrier if changes are made to the network that would cause it to be unavailable with another service provider or affect a provider's performance.<ref name="network information">{{cite web|last=Lampert |first=Donna N |title=Telecommunications, the Internet, and Covergence: Regulation and ISPs, ASPs, and ESPs |url=http://www.l-olaw.com/Articles_and_White_Papers/Telecom_Internet_and_Convergence.pdf |work=January 2000 |publisher=Lampert & O'Connor, P.C. |accessdate=25 May 2012 }}{{dead link|date=December 2016 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> If network changes are made the carrier must provide references to technical specifications, protocols, and standards regarding the transmission, signal, routing, and facility assignment as well any new technology or equipment that may affect the connection to the consumer.<ref name="network information" /> This requirement is called network information disclosure and is codified at 47 CFR 51.325–51.335.<ref name="CFR">47 C.F.R. § 64.702(d)(2) (2001).</ref>
====Cross-subsidization prohibitions==== The FCC prohibited cross-subsidization: a carrier may not use services not subject to competition to subsidize a service that is subject to competition.<ref name="CFR" /> For example, a carrier may not fund Internet services using noncompetitive local telephone revenue.<ref name="CFR" />
====Accounting safeguards==== The FCC created a series of accounting safeguards that can be found in Subpart I of Part 64 of CFR Title 47.<ref name="Title 47">{{cite web |last=Federal Communications Commission |title=Title 47: Telecommunications |url=http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=8175f2018e4b3484c5c364f87d69d973&rgn=div6&view=text&node=47:3.0.1.1.11.9&idno=47 |work=February 6, 2002 |access-date=25 May 2012 |url-status=dead |archive-url=https://web.archive.org/web/20120529053544/http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr |archive-date=29 May 2012 }}</ref> Annual independent audits are performed to ensure certain carriers are not improperly cross subsidizing their services.<ref name="Title 47" /> The final reports of these independent audits are publicly available and can be obtained by contacting the Accounting Safeguards Division of the FCC's Common Carrier Bureau.<ref name="Title 47" /> The FCC provides information about common carrier accounts in the ARMIS database available on their website.<ref>Common Carrier Filing Requirements - Information for Firms Providing Telecommunications Services <http://www.fcc.gov/guides/common-carrier-filing-requirements-information-firms-providing-telecommunications-services#ARMIS></ref>
====Customer proprietary network information==== The FCC needed to create restrictions on BOCs gathering sensitive information from their subscribers. This safeguard to protect subscriber's information has become known as customer proprietary network information (CPNI).<ref name=CPNI>{{cite web|title=Customer Proprietary Network Information (CPNI)|url=http://www.cybertelecom.org/ci/cpni.htm|accessdate=25 May 2012}}</ref> The FCC requires carriers to provide any customer proprietary network information available to the public on the same terms and conditions of the affiliated ESP if requested.<ref>Ameritech's CEI Plan, ¶ 41; GTE ONA, Bell Atlantic's CEI Plan;ONA Review, ¶ 25, 398-447.</ref>
In 1996, Congress passed a privacy of customer information provision in section 222 of the Telecommunications Act.<ref name="USC222">47 U.S.C. § 222.</ref> Under the statute, CPNI is defined as "information that relates to the quantity, technical configuration, type, destination, location, and amount of use of a telecommunications service subscribed to by any customer of a telecommunications carrier, and that is made available to the carrier by the customer solely by virtue of the carrier-customer relationship; and information contained in the bills pertaining to telephone exchange service or telephone toll service received by a customer of a carrier, except that such term does not include subscriber list information."
==See also== *Net neutrality
==References== {{Reflist}}
{{Federal Communications Commission}}
Category:Federal Communications Commission