Regulatory history. The first two key pieces of telecommunication legislation were the Radio Act of 1912 and the Radio Act of 1927, which marked Congress's debut into telecommunications regulation and established federal government ownership of the radio spectrum. Under the laws, the government gave away spectrum access in return for promises from the licensees that their programming would serve the public interest.
The Communication Act of 1934 modernized regulation begun under the first acts and replaced the existing regulatory body with the FCC. The Telecommunications Act of 1996 again modernized regulation, in particular by recognizing technological convergence - the idea, for example, that the rule that only phone service is delivered through phone lines no longer applied. It also broke up AT&T and helped created the baby bells.
FCC. The Federal Communications Commission (FCC) is an independent United States government agency charged with regulating interstate and international communications by radio, television, wire, satellite and cable. The FCC consists of five bureaus, the Common Carrier Bureau (jurisdiction over telephone services), Wireless Telecommunications Bureau (cell phones), Cable Services Bureau (cable television), Mass Media Bureau (commercial television), and International Bureau.
As the various technologies have begun to be delivered through more than one delivery mechanism, the jurisdictional distinctions among the bureaus have begun to fall apart. One of the purposes in enacting the 1996 Act was to clarify those confusions. Another source of litigation arises from the fact that the FCC's jurisdiction is over "interstate and international communications," which means that it does not have jurisdiction over intrastate transmissions. Intrastate transmissions are regulated by the individual states, but, of course, determining whether a transmission is interstate or intrastate can be quite difficult, which explains the litigation.
Licensing. Under federal law, any party interested in transmitting interstate or international communications must obtain a license from the FCC. The process begins by filing an application for authority with the FCC. The FCC gives public notice of the application and invites anyone affected by the application to object to the filing and participate in the hearing.
The hearing is much like a trial, in the sense that certain rules of evidence are followed, parties are given a chance to present their arguments, and a written record is created. Appeals from FCC decisions are to the Federal appellate courts.
Rulemaking. Besides issuing licenses, the FCC's other role is to issue rules that the regulated businesses must follow. The rulemaking process begins with the FCC issuing a public notice that it intends to issue a particular rule and invites comment on it. Interested parties then provide written comments. The FCC considers the comments and acts accordingly. The process is much less formal than the licensing process.
Spectrum management. The FCC is charged with responsibility for managing the radio spectrum not used by the federal government in a way that best serves the public interests. The FCC first decides how much of the spectrum a particular technology needs and which part of the overall spectrum will be dedicated to that technology. Once those decisions have been made, the FCC puts that portion of the spectrum out for competitive bid.
Allocation of spectrum space for a new technology typically begins with the filing of a petition asking the FCC to issue a rule reserving the space for the new technology. The FCC then invites comments from affected parties, which would include those who would be losing space to the new allocation and those with spectrum space near the new allocation who might be concerned about interference with their signals. The rulemaking process in this situation can be quite lengthy, especially if opposition is fierce and politically well-connected. With technology changing so rabidly, the hope is that the process won't take longer than the new technology's usefulness.
Regulatory future. Under the telecommunication laws, the radio spectrum is owned and managed by the federal government, which is different from every other natural resource. Some have argued that market forces should determine spectrum access, just as they do with other natural resources. Those who oppose letting market forces loose on the radio spectrum counter that the spectrum is a finite resource and that only the wealthiest bidders would gain access. Even today, they argue, with rules in place to give smaller operators an opportunity to gain access, many smaller bidders are forced to pool their resources to compete for space.
Enhanced services. Telecommunications services are either basic or enhanced. Basic services are those that are provided from point to point, without the provider doing anything other than making the transmission possible. Enhanced services are those in which the provider adds value to the transmission by acting on the data in some way. Examples of enhanced services are voice mail provided by the telephone company or storing of email provided by an Internet service provider.
The FCC regulates basic services but not enhanced services. Thus, providers of enhanced services can charge whatever they want and are not regulated.
Common carriers. Basic services can be provided through either a common carrier or a private carrier. Common carriers sell to the general public, while private carriers have individual, customized arrangements with their customers. The FCC regulates common carriers but not private carriers.
Federal laws impose a universal service charge on all common carriers of roughly 5% of their end-user revenues. The collected funds are used to "preserve and advance universal coverage." Although Internet service providers don't meet the definition of common carrier, the FCC has determined that have to pay the fee because their competitors are common carriers.
Acronyms. There are several acronyms that keep popping up in telecommunications discussions that might be useful to know.
CLEC. Competitive local exchange carriers are not regulated as heavily as ILECs, but they are under an obligation to give their competitors access to their bandwidth under certain conditions.
CPNI. Customer proprietary network information is information about the customer that the carrier is able to collect because of its relationship to its customer, which includes not just name, address, and credit card information, but also who the person called or which websites he or she visited. The laws restrict what the provider can do with the information.
ILEC. The baby bells are incumbent local exchange carriers, and they are heavily regulated.
ITFS. Instructional television fixed service is a band of 20 channels with a short range that are to be used by school systems, colleges, and universities to send wireless content to students and the community.
LMDS. Local multi-point distribution service is a broadband wireless telecommunications system that provides two-way digital voice, data, Internet, and video sevices.
MMDS. Multi-channel multi-point distribution service is a wireless telecommunications system that uses an omni-directional antenna to broadcast signals to reception equipment at the subscriber's location.