Telecommunications Law in the Internet Age

Sharon K. Black

• Publisher: Morgan Kaufmann
• Year: 2001
• Print ISBN: 9781558605466
• eBook ISBN: 9780080518688
• Topic: Law
• Subtopic: Science & Technology Law
• Index: Law

For companies in and around the telecommunications field, the past few years have been a time of extraordinary change-technologically and legally. The enacting of the Telecommunications Act of 1996 and the development of international trade agreements have fundamentally changed the environment in which your business operates, creating risks, responsibilities, and opportunities that were not there before. Until now, you'd have had a hard time finding a serious business book that offered any more than a cursory glance at this transformed world. But at last there's a resource you can depend on for in-depth analysis and sound advice. Written in easy-to-understand language, Telecommunications Law in the Internet Age systematically examines the complex interrelationships of new laws, new technologies, and new business practices, and equips you with the practical understanding you need to run your enterprise optimally within today's legal boundaries.* Offers authoritative coverage from a lawyer and telecommunications authority who has been working in the field for over three decades.* Examines telecommunications law in the U.S., at both the federal and state level.* Presents an unparalleled source of information on international trade regulations and their effects on the industry.* Covers the modern telecommunications issues with which most companies are grappling: wireless communication, e-commerce, satellite systems, privacy and encryption, Internet taxation, export controls, intellectual property, spamming, pornography, Internet telephony, extranets, and more.* Provides guidelines for preventing inadvertent violations of telecommunications law.* Offers guidance on fending off legal and illegal attacks by hackers, competitors, and foreign governments.* Helps you do more than understand and obey the law: helps you thrive within it.

CHAPTER 1

Introduction—The New Telecommunications Environment

“… to provide for a pro-competitive, de-regulatory national policy framework designed to accelerate rapidly private sector deployment of advanced telecommunications and information technologies and services to all Americans by opening all telecommunications markets to competition …”

The goal of the U.S. Telecommunications Act of 1996¹

TELECOMMUNICATIONS LAW HAS EXISTED SINCE SYSTEMS WERE FIRST developed to carry communications over distances. Early law and international agreements addressed the technical and legal issues associated with postal and semaphoring systems, telegraph, and radio communications systems, especially ship-to-ship and ship-to-shore communications. These issues included the (1) details of how one system interconnected with another system to complete the communications, (2) pricing of services, (3) security, (4) ownership, (5) access to the systems, (6) control of information, and (7) content of many communications, generally to exclude obscenity or to assist law enforcement and national defense agencies.

As the telephone, television, cable television (CATV), microwave systems, and satellites came into being, the law addressed the legal issues accompanying these new technologies. Governments allowed regulated monopolies to provide and control the communications systems and worked with international bodies, such as the International Telecommunications Union (ITU) in Geneva, Switzerland, to enable the exchange of international communications. Up to this point, however, countries and governments could still control communications much like goods passing across borders.

In the last 25 years, the telecommunications environment in the United States and around the world changed dramatically—creating what is called “the Internet Age” in communications. With it, a person with access to modern communication sytems can communicate nearly instantaneously with any other person in the world with access to modern voice, data, and/or video communications. While generally positive, this exchange of information impacts multiple areas of our lives and can no longer be controlled easily by governments or systems. This reality raises numerous new legal issues and expands the group of persons interested in telecommunications law from specialized attorneys and regulators to anyone using modern communications, especially the Internet. To assist you in more fully understanding these issues, the purpose of this chapter is to identify the technical and structural changes creating this expanded environment.

1.1 NEW TRANSPORT TECHNOLOGIES

Among the many important changes creating this expanded telecommunications environment are the technologies, such as digital, packet communications, wireless, global satellite systems, and the Internet, that have significantly increased the availability and transport capacity of the communications systems and drastically changed the economics of communications networks, which in turn lowered the cost of using the networks.

For the first time in history, the charge for most communications shifted from time and distance based to a more averaged or flat rate. This phenomenon is known as the death of distance. For example, with packet systems, each call is separated into smaller bundles or packets, addressed and sent over the cleanest, fastest, and least expensive path available. At the receiving end, the equipment collects and sequences the packets and presents them to the receiving party in a manner that is nearly indistinguishable in quality, but more efficient to transmit than other, more traditional methods. It also means that the cost of transporting each call must be averaged over all of the systems that carried portions of that call.

Similarly, with satellite systems, the cost of each call is primarily for the uplink and downlink. Thus, a call from California to New York or Paris costs basically the same as a call from California to Colorado. This trend in making distance much less of a factor in the cost of modern communications has spurred major changes in network design and pricing decisions throughout the telecommunications industry.

1.2 CONVERGED VOICE, DATA, VIDEO, AND GRAPHICS SYSTEMS

As a result of the new transport technologies, communications and computing in the United States began to converge to provide combined voice, data, video, and graphics systems to customers. In most countries of the world, communications services have always been combined under the Postal, Telephone, and Telegraph (PTT) department of each country’s government. In the United States, however, separate, monopolistic companies traditionally focused on only one segment of the industry. In an effort to spread the information sources and balance ownership of the communications delivery systems, the U.S. Congress, the Federal Communications Commission (FCC), and courts agreed that the Bell Companies and a few independent telephone companies should provide voice or telephone communications, while Western Union should provide telegraph services. Similarly, the networks ABC, CBS, and NBC were the main television broadcasters, and IBM initially dominated the data industry. Reflecting these divisions in the communications industry, most U.S. corporations had separate voice and data departments, and U.S. law differentiated between telecommunications and information services.

This pattern continued in the United States until the Telecommunications Act of 1996 acknowledged this technical convergence and reversed the historical concept of telecommunications as a natural monopoly to encourage a far more liberal division of ownership among companies. This has created tremendous opportunities for new companies in the telecommunications industry and completely changed the structure of the industry. The history of this transition and ownership patterns is so important to our understanding of the current U.S. telecommunications industry that it is described in more detail in Chapter 2.

1.3 LEGAL CHANGES

Along with these technical changes, several legal events occurred in the United States and worldwide in the 1980s and 1990s that dramatically changed the telecommunications industry, products and services offered, and options for customers. These events included the following: (1) the breakup of the Bell System in 1984, (2) the opening of the Internet in the mid-1990s, (3) changes in the laws in nearly two-thirds of the states in the United States in 1995 to open local telecommunications markets to competition, (4) the enactment and implementation of the Telecommunications Act of 1996 in the United States, and (5) the signing of the World Trade Organization agreement by 69 countries in February 1997.

1.3.1 Breakup of the Bell System

The breakup of the Bell System was an out-of-court settlement of an antitrust case against the Bell System. Nonetheless, it dramatically changed the structure of the U.S. telecommunications industry, dividing it into regulated local markets and competitive long-distance markets. This action set the stage for the current competitive environment in the industry.

1.3.2 The Internet

The Internet began as the ARPANET, providing military communications under the Advanced Research Project Agency (ARPA). In 1979, the packet and store-and-forward concepts tested on ARPANET were used to form the NSFNET to provide a research computer network among selected universities under projects funded by the National Science Foundation (NSF). In 1992, the World Wide Web technology was released, connecting over 1 million host sites. In 1993, the White House “went online,” and finally, on April 30, 1995, the NSFNET closed and the new Internet officially opened. This tremendous change in the concept and structure of communications reverberates still.

1.3.3 Changes in State Law

Also in the early 1990s, nearly a decade after the 1984 divestiture of the U.S. Bell System, state legislatures across the United States began studying the results of the divestiture and its implication for the future of telecommunications in their states. They noted that three things had occurred: (1) prices for long-distance service had dropped dramatically, (2) the providers of telecommunications services delivered new technology to customers much faster than before, and (3) customers had more options for service. The state governments speculated that since these results had occurred in the long-distance communications markets, they would also work in their local telephone markets if competition were introduced. Therefore, two-thirds of the state governments passed state laws opening their local markets. They specifically stated their goals in the various state laws so that if these results did not occur for some reason, they could reverse their decision for competition and return to a more regulated environment.

What is not always realized is that the majority of states introduced local competition in telecommunications before the U.S. federal law mandated it. This state action resulted in differences among the states that impacted nationwide products, causing some “churning” as states subsequently realigned their state laws to become more consistent with the federal Telecommunications Act of 1996.

1.3.4 The Telecommunications Act of 1996

The Telecommunications Act of 1996 is the most significant piece of telecommunications legislation in the United States in the 62 years since the passage of the Communications Act of 1934. It opened competition in the local telecommunications markets throughout the United States and mandated changes in the rights and responsibilities of all portions of the telecommunications industry, including: (1) equipment manufacturers, (2) existing and new service providers, (3) wired and wireless companies, and (4) all voice, data, video, and graphics technologies. The 1996 Act is of such tremendous importance to the telecommunications industry that two chapters, Chapters 3 and 4, of this book are dedicated to discussing it.

1.3.5 World Trade Organization Agreement of 1997

Also in the early 1990s, governments around the world began assessing the impact of the Internet and the other new technologies on their countries. Many go...

Table of contents

• Cover image
• Title page
• Table of Contents
• Inside Front Cover
• Copyright
• Dedication
• Preface
• Chapter 1: Introduction—The New Telecommunications Environment
• PART I: THE NEW COMPETITIVE TELECOMMUNICATIONS ENVIRONMENT
• PART II: EMBRACING THE EXPANDED GLOBAL TELECOMMUNICATIONS MARKET
• PART III: LEGAL ISSUES WITH ADVANCED TECHNOLOGIES
• APPENDIX A: Key Documents and Decisions Concerning Local Number Portability
• APPENDIX B: Key Documents and Decisions Concerning Universal Service
• APPENDIX C: Key Documents and Decisions Concerning Access and Reciprocal Compensation
• APPENDIX D: Legal Instruments Embodying the Results of the Uruguay Round
• APPENDIX E: Membership of the World Trade Organization
• APPENDIX F: Commitments and Most Favored Nation Exemptions
• APPENDIX G: Chapters within Title 19 of the U.S. Code Customs Duties
• APPENDIX H: State Privacy Laws
• APPENDIX I: Resources to Detect and Delete Cookies
• APPENDIX J: State Laws Concerning Encryption, Key Escrow, and Digital Signatures
• Index