BCC: IP: NTIA joins the FNC in opposing the ACTA petition.

[D Farber <800518a3 () radiomail net>]

Dear Interesting People,
David,


     NTIA joins the FNC in opposing the ACTA petition.


Tice


Begin forwarded message:








                                   May 8, 1996




The Honorable Reed Hundt Chairman Federal Communication Commission Room 
814 1919 M Street, N.W. Washington D.C. 20554


                                   Re: RM 8775


Dear Chairman Hundt:


     This letter addresses the petition for rulemaking filed before the 
Commission by America's Carriers Telecommunication Association (ACTA) in 
March 1996.  ACTA asks the Commission to:  (1) order Internet software 
providers to "immediately stop their unauthorized provisioning of 
telecommunications software"; 2)  confirm the Commission's authority over 
interstate and international telecommunications services offered over the 
Internet; and 3) institute rules to govern the use of the Internet for 
providing telecommunications services.


     On behalf of the Administration, NTIA strongly urges the Commission 
to deny the ACTA Petition.  The Petition not only mischaracterizes the 
existing law, but also reflects a fundamental misunderstanding of the way 
in which the Internet operates and of the services now making use of the 
Internet.


     ACTA requests that the Commission stop firms such as the Respondents 
from selling software that enables "a computer with Internet access to be 
used as a long distance telephone, carrying voice transmissions, at 
virtually no charge for the call" [ACTA Petition at i]. ACTA asserts that 
such firms are common carrier providers of telecommunications services 
that should not be allowed to operate without first obtaining a 
certificate from the Commission [ACTA Petition at 6-7].


     That argument is wrong.  The Respondents provide their customers with 
goods, not services.  Although the software that those firms sell does 
enable individuals to originate voice communications, all of the actions 
needed to initiate such communications are performed by the software 
users, rather than the vendors.  At no time do the Respondents engage in 
the "transmission" of information, which, according to the 
Telecommunications Act of 1996, is the sine qua non of both a 
telecommunications service and a telecommunications carrier. [See 
Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat.  56, 3(a) 
amending Section 153 of the Communications Act of 1934 to add new 
definitions of "telecommunications,"  "telecommunications service," and  
"telecommunications carrier."] In that critical sense, the Respondents are 
no more providing telecommunications services than are the vendors of the 
telephone handsets, fax machines, and other customer premises equipment 
that make communications possible.
     ACTA also asks the Commission for a declaratory ruling "confirming 
its authority over interstate and international telecommunications 
services using the Internet." [ACTA Petition at 6.  While ACTA claims the 
Commission has jurisdiction to regulate the Internet pursuant to Section 1 
of the Communications Act, citing United States v. Southwestern Cable Co., 
392 U.S. 157 (1968), ACTA also acknowledges that such jurisdiction is 
limited to actions ancillary to the effective performance of its specific 
responsibilities under other parts of the Act.  Id. at 5,7-8.  ACTA 
suggests that unregulated growth of the Internet presents "unfair 
competition" to Title II regulated interexchange carriers that "could, if 
left unchecked, eventually create serious economic hardship on all 
existing participants in the long distance marketplace" and could be 
"detrimental to the health of the nation's telecommunications industry and 
the maintenance of the nation's telecommunications infrastructure."  Id. 
at 4, 5. Voice telephony via the Internet, however, is still a limited and 
cumbersome capability:  both parties to the call need computers and must 
have compatible software.  Moreover, there is no assurance that a call 
placed will be completed or not interrupted.  While the technology 
involved may improve rapidly, presently there is no credible evidence to 
justify Commission regulation of the Internet.] In fact, as the Federal 
Networking Council pointed out in comments filed on May 4, there are no 
telecommunications services currently being offered via the Internet.  The 
services that now involve the Internet are more likely to be "enhanced," 
or information services over which the Commission has disclaimed 
jurisdiction under the Communications Act.  The Commission decision in the 
1980's not to regulate enhanced services was a wise one that has conferred 
substantial benefits on American consumers.  The Telecommunications Act of 
1996 in no way requires a change in that decision.


     The Internet now connects more than 10 million computers, tens of 
millions of users, and is growing at a rate of 10-15 percent a month. This 
growth has created opportunities for entrepreneurs to develop new services 
and applications such as videoconferencing, multicasting, electronic 
payments, networked virtual reality, and intelligent agents. Perhaps more 
importantly, it creates a growing number of opportunities for consumers to 
identify new communication and information needs and to meet those needs.  
The Commission should not risk stifling the growth and use of this vibrant 
technology in order to prevent some undemonstrated harm to long distance 
service providers.  If Internet-based services eventually develop to an 
extent that raises concerns about harm to consumers or the public 
interest, the Commission would have ample time to more fully address the 
issue.  Now is not that time.


     NTIA, therefore, urges the Commission to reject the ACTA petition 
without delay.



                                   Larry Irving








                                   Assistant Secretary for
                                   Communications and Information


cc:  The Honorable James H. Quello
     The Honorable Rachelle B. Chong
     The Honorable Susan Ness