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released December 24, 1997
X. NOTICE OF INQUIRY ON IMPLICATIONS
OF INFORMATION SERVICE AND INTERNET USAGE
311. In Section VIII.B, above,
we tentatively concluded that information service providers should
not be subject to interstate access charges as currently constituted.
However, the development of the Internet and other information
services raise many critical questions that go beyond the interstate
access charge system that is the subject of this proceeding. Ultimately,
these questions concern no less than the future of the public
switched telephone network in a world of digitalization and growing
importance of data technologies. Our existing rules have been
designed for traditional circuit-switched voice networks, and
thus may hinder the development of emerging packet-switched data
networks. To avoid this result, we must identify what FCC policies
would best facilitate the development of the high-bandwidth data
networks of the future, while preserving efficient incentives
for investment and innovation in the underlying voice network.
In particular, better empirical data are needed before we can
make informed judgments in this area.
312. We ask whether, after
we complete reform of access charges as contemplated in this proceeding,
we should consider any additional actions relating to interstate
information services and the Internet. We therefore initiate this
Notice of Inquiry, with a separate pleading cycle, to address
these issues. Based on the record in response to this Notice of
Inquiry, and the decisions we make in the Access Reform Report
and Order, we will determine whether to make proposals in this
area in a subsequent Notice of Proposed Rulemaking.
313. Many of the concerns now
being raised about switch congestion caused by Internet usage
arise because virtually all residential users today connect to
the Internet -- a packet-switched data network -- through incumbent
LEC switching facilities designed for circuit-switched voice calls.
The end-to-end dedicated channels created by circuit switches
are unnecessary and even inefficient when used to connect an end
user to an ISP. We seek comment on how our rules can most effectively
create incentives for the deployment of services and facilities
to allow more efficient transport of data traffic to and from
end users. We invite parties to identify means of addressing the
congestion concerns raised by incumbent LECs, for example by deploying
hardware to route data traffic around incumbent LEC switches,
or by installing new high-bandwidth access technologies such as
asymmetric digital subscriber line (ADSL) or wireless solutions.
314. We seek comment on what
regulatory barriers -- at either the state or federal level --
might prevent provision of alternate network access arrangements
for information service providers, or might create artificial
disincentives against use of such arrangements when they become
available. Should we consider using our forbearance or preemption
authority to avoid results that would hamper the deployment of
new technologies? We also seek comment on how the matters before
us in our Local Competition and Universal Service proceedings
affect information service providers and raise issues that we
need to address in this proceeding.
315. We seek comment on the
effects of the current system on network usage, incumbent LEC
cost-recovery, and the development of the information services
marketplace. We are disinclined to take actions that would stifle,
rather than enhance, the development of the Internet, or similar
packet-switched networks. We encourage commenters to provide data
on the characteristics of information service usage and its effects
on the network. We are also particularly interested in data on
the incumbent LECs' costs directly related to ESPs' use of the
PSTN, on incumbent LECs' revenues attributable to ESP traffic
(including second phone line revenue), and in a comparison of
what PSTN services ESPs desire, as opposed to what they currently
have access to. We seek comment on administrative and technical
issues that may arise either under continued operation of the
current system or as modified by this proceeding. In particular,
we seek comment on jurisdictional, metering, and billing questions,
given the difficulty of applying jurisdictional divisions or time-sensitive
rates to packet-switched networks such as the Internet.
316. The current division in
our rules between basic and enhanced services may not accurately
capture the types of companies that provide information services
today, and the manner in which these companies use incumbent LEC
facilities. There are many kinds of information services, with
different usage patterns and effects on the network. For example,
arguments about network congestion caused by long hold-time calls
would not seem to apply to information services such as telemessaging
or credit card validation. We seek comment on whether we should
distinguish between different categories of information or enhanced
services. In addition, several companies now provide software
that allows a voice conversation to be conducted over the Internet.
Such "Internet telephony" allows what appears to be
a basic service -- voice transmission -- to take place over a
packet-switched interactive data network that we have traditionally
considered to be an enhanced service. We seek comment on how new
services such as Internet telephony, as well as real-time streaming
audio and video services over the Internet, should affect our
analysis.
317. We seek comment as to
whether the issues raised in this Notice of Inquiry should be
addressed in any existing proceeding, or a new proceeding. As
discussed in Section VIII, above, the Network Reliability and
Interoperability Council (NRIC) is also currently evaluating the
effects of Internet usage on the voice network. We do not intend
for this proceeding to in any way supersede the NRIC's efforts,
and we believe that the NRIC's recommendations will complement
the record we develop here. Ultimately, a full and open debate
about the relationship of information services to the public switched
network will benefit all parties. We also strongly encourage interested
parties among incumbent LECs and ESPs to work together to identify
which technological solutions hold the greatest promise in carrying
Internet traffic most efficiently and with the least adverse price
impact on consumers.
318. As discussed in Section VIII, above, we have established an electronic mailbox at <isp@fcc.gov> for submission of informal comments on the treatment of Internet and other information services, and we have made additional information available through our World Wide Web site at <http://www.fcc.gov/isp.html>.
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