There’s talk in Washington about a major new telecommunications bill, to update the Telecom Act of 1996. A discussion draft of the bill is floating around.
The bill defines three types of services: Internet service (called “Broadband Internet Transmission Service” or BITS for short); VoIP; and broadband television. It lays down specific regulations for each type of service, and delegates regulatory power to the FCC.
In bills like this, much of the action is in the definitions. How you’re regulated depends on which of the definitions you satisfy, if any. The definitions essentially define the markets in which companies can compete.
Here’s how the Internet service market is defined:
The term “BITS” or “broadband Internet transmission service” –
(A) means a packet-switched service that is offered to the public, or [effectively offered to the public], with or without a fee, and that, regardless of the facilities used –
(i) is transmitted in a packed-based protocol, including TCP/IP or a successor protocol; and
(ii) provides to subscribers the capability to send and receive packetized information; …
The term “BITS provider” means any person who provides or offers to provide BITS, either directly or through an affiliate.
The term “packet-switched service” means a service that routes or forwards packets, frames, cells, or other data units based on the identification, address, or other routing information contained in the packets, frames, cells, or other data units.
The definition of BITS includes ordinary Internet Service Providers, as we would expect. But that’s not all. It seems to include public chat servers, which deliver discrete messages to specified destination users. It seems to include overlay networks like Tor, which provide anonymous communication over the Internet using a packet-based protocol. As Susan Crawford observes, it seems to cover nodes in ad hoc mesh networks. It even seems to include anybody running an open WiFi access point.
What happens to you if you’re a BITS provider? You have to register with the FCC and hope your registration is approved; you have to comply with consumer protection requirements (“including service appointments and responses to service interruptions and outages”); and you have to comply with privacy regulation which, ironically, require you to keep track of who your users are so you can send them annual notices telling them that you are not storing personal information about them.
I doubt the bill’s drafters meant to include chat or Tor as BITS providers. The definition can probably be rewritten to exclude cases like these.
A more interesting question is whether they meant to include open access points. It’s hard to justify applying heavyweight regulation to the individuals or small businesses who run access points. And it seems likely that many would ignore the regulations anyway, just as most consumers seem ignore the existing rules that require an FCC license to use the neighborhood-range walkie-talkies sold at Wal-Mart.
The root of the problem is the assumption that Internet connectivity will be provided only by large institutions that can amortize regulatory compliance costs over a large subscriber base. If this bill passes, that will be a self-fulfilling prophecy – only large institutions will be able to offer Internet service.