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========================================================================= ________________ _______________ _______________ /_______________/\ /_______________\ /\______________\ \\\\\\\\\\\\\\\\\ \ ||||||||||||||||| / //////////////// \\\\\\\\\\\\\\\\\/ ||||||||||||||||| / //////////////// \\\\\\_______/\ ||||||_______\ / //////_____\ \\\\\\\\\\\\\ \ |||||||||||||| / ///////////// \\\\\\\\\\\\\/____ |||||||||||||| / ///////////// \\\\\___________/\ ||||| / //// \\\\\\\\\\\\\\\\ \ ||||| / //// \\\\\\\\\\\\\\\\/ ||||| \//// ========================================================================= EFFector Online Volume 6 No. 7 Dec. 10, 1993 editors@eff.org A Publication of the Electronic Frontier Foundation ISSN 1062-9424 In This Open Platform Special Issue: EFF Statement on Markey Infrastructure Bill EFF Analysis of Brooks-Dingell Antitrust Reform Bill NTIA Announces Universal Service Hearing Late Breaking News - Digital Telephony Threat Returns What You Can Do --==--==--==-<>-==--==--==-- Subject: EFF Statement on Markey Infrastructure Bill EFF Position Statement on and Summary of Bill HR-3636 National Communications Competition and Information Infrastructure Act of 1993 Introduced by Reps. Markey, Fields and Boucher On Monday, November 22, 1993, House Telecommunications and Finance Subcommittee Chairman Edward Markey (D-Mass.), Minority Chairman Jack Fields (R-Tex.), and other cosponsors introduced the "National Communications Competition and Information Infrastructure Act of 1993." The legislation, which incorporates EFF's Open Platform philosophy, is built on four concepts: open platform services, the entry of telephone companies into video cable service, universal service, and competition in the local telephone market. Of all pending telecommunications legislation, Markey's bill is the only one with a vision of an open, accessible network which supports a true diversity of information sources. The legislation proposes a major restructuring of the Communications Act of 1934 in order to account for changes in technology, market structure, and people's increasingly advanced information access needs. EFF recommends strong support for the bill. For the bill to realize its goals however, the following key changes are necessary: * Require Open Platform Services to be tariffed at reasonable, affordable rates; * Strengthen non-discriminatory video dialtone access rules and eliminate current five year sunset provision; * Add information infrastructure access to the definition of universal service, and ensure public interest participation in redefinition of universal service obligations; * Ensure that all telecommunication providers pay a fair share of universal service costs. These are EFF's primary concerns about the bill. We hope to broaden our position and understanding of the bill based on the views of other interested groups. This is a summary of the main points of the legislation along with EFF positions and comments. OPEN PLATFORM Open platform service is designed to give residential subscribers access to voice, data, and video digital telephone service on a switched, end-to-end basis. With Open Platform service widely available, individuals and organizations would have ready access to a variety of important applications on the information highway, including distance learning, telemedicine, telecommuting, the Internet, and many more. The bill directs the Federal Communications Commission to investigate the policy changes needed to provide open platform service at affordable rates, but fails to require telecommunications carriers to tariff the service. ACTION NEEDED: The Open Platform concept should be enthusiastically supported, but the bill as written fails to ensure that Open Platform service will be widely available at affordable rates. Those who care about affordable, equitable access to new information media should demand that local telephone companies be required to tariff Open Platform services within a specific timeframe. ENTRY OF TELEPHONE COMPANIES INTO VIDEO PROGRAMMING The bill promotes the entry of telephone companies into video cable service and seeks to benefit consumers by spurring competition in the cable television industry. The bill would rescind the ban on telephone company ownership and delivery of video programming that was enacted in the Cable Act of 1984. Telephone companies would be allowed to provide video programming, through a separate subsidiary, to subscribers in its telephone service area. Telephone companies would be required to provide video services through a "video platform," that would be open, in part, to all video programming providers. The bill adopts a set of regulations originally proposed by the Federal Communications Commission (FCC) called "Video Dialtone." Under video dialtone rules, telephone companies would be required to allow other content providers to offer video programming to subscribers using the same video platform as used by the telephone company, on a non-discriminatory basis. Other providers would be allowed to use up to 75 percent of the video platform capacity. To encourage telephone companies to actually invest in new information infrastructure, they would be prohibited from buying existing cable systems within their telephone service territory, with only tightly drawn exceptions. However, the video dialtone requirement would end in five years, after which telephone companies would have no requirement at all to provide non-discriminatory access to their video platform. ACTION NEEDED: Video dialtone is a useful starting point for structuring non-discriminatory video access, but its provisions must be strengthened. First, there should be no fixed expiration date for the video dialtone requirements. An open platform for video information is critical to the free flow of information in society. These requirements should be relaxed only when it is clear than there are sufficient alternatives throughout the country for distribution of video and multimedia information Alternatives would include widely available, affordable Open Platform service capable of carrying full-motion, video programming. Second, stronger safeguards against anti-competitive behavior are necessary. Finally, more explicit provisions assuring access for third party video servers are needed to ensure the all programmers can use video dialtone to disseminate their video programs. Video dialtone rules fail to consider how to guarantee third party access to interactive functions of a video dialtone platform. Interactive technology is so new and untested that it has hard to legislate about it at this point. The FCC should, however, be instructed to study this issue as new interactive capabilities become available. UNIVERSAL SERVICE One of the goals of the bill is to "preserve universal telecommunications at affordable rates." To achieve this goal, the bill would establish a joint Federal-State Board (made up of FCC members and state regulators) to devise a framework for ensuring continued universal service. The Board would be required to define the nature and extent of the services encompassed within a telephone company's universal service obligation. The Board also would be charged with promoting access to advanced telecommunications technology. The FCC is required to prescribe standards necessary to ensure that advances in network capabilities and services deployed by common carriers are designed to be accessible to individuals with disabilities, unless an undue burden is posed by such requirements. Additionally, within one year of enactment, the bill requires the FCC to initiate an inquiry to examine the effects of competition in the provision of both telephone exchange access and telephone exchange service furnished by rural carriers. ACTION NEEDED: Include an explicit requirement that advanced digital access services be included in the universal service definition as soon as is practical. Create a mechanism for public interest participation in the process of defining the components of universal service in the information age. VIDEO PLATFORM AND FRANCHISE REQUIREMENTS Any telephone company that establishes a video platform would be required to meet 1992 Cable Act standards concerning customer privacy rights, consumer protection, and customer service. Telephone companies would be required to meet the same standards as cable companies for diversity in commercial programming, to assure that the broadest possible information sources are made available to the public. Like cable companies, telephone companies would be required to comply with public, educational, and governmental (PEG) access rules. Telephone companies also would be required to meet standards concerning re-transmission consent for cable systems. Some Cable Act requirements concerning cable companies would expressly not be applicable to telephone companies. These include: general franchise requirements; franchise fees; regulation of rates; regulation of services, facilities, and equipment; consumer electronics equipment compatibility; modification of franchise obligations; renewal proposals; conditions of sale; unauthorized reception of cable service; equal employment; limitation on franchising authority liability; and coordination of federal, state, and local authority. Instead of Cable Act compliance, the legislation provides that a video programming affiliate of any telephone company that establishes a video platform would be subject to the payment of fees imposed by a local franchising authority. The rate at which these fees would be imposed cannot exceed the rate at which franchise fees are imposed on any operator transmitting video programming in the same service area. LOCAL COMPETITION In order to promote competition in local telecommunications service, the bill requires that local telephone companies open their networks to competitors who wish to interconnect with the public switched telephone network. These interconnect rules will enable any other network operator to offer basic telephone service as well as advanced data services in direct competition with the local phone company. The FCC would be required to establish rules for compensating local telephone companies for providing interconnection and equal access. ACTION NEEDED: Local competition can be a benefit to consumers and spur the development of innovative new services, as long as all interconnecting networks pay their fair share of the cost of using the public telephone network. All who interconnect should be required to support the cost of basic universal service. For More Information Contact: Daniel J. Weitzner, Senior Staff Counsel 202-347-5400 djw@eff.org Copies of the legislation and this summary are available on EFF's Internet FTP site: ftp.eff.org, in the directory pub/eff/legislation/hr3636 and hr3636.summary. --==--==--==-<>-==--==--==-- Subject: EFF Analysis of Brooks-Dingell Antitrust Reform Bill EFF Analysis of Bill HR-3626 Antitrust Reform Act of 1993 Introduced by Reps. Brooks and Dingell On Tuesday, November 23, 1993, House Judiciary Chair Brooks (D-Tex.) and House Commerce Committee Chair Dingell (D-Mich.) introduced major antitrust reform legislation, H.R. 3626. This bill would phase out the limitations placed on the Bell Companies under the modified consent decree that resulted in the antitrust agreement that broke up AT&T in 1982 (the "MFJ" or "Modification of Final Judgment"). The MFJ currently precludes Bell Companies from providing long distance service and manufacturing telephone equipment. Until two years ago, the Bell Companies were precluded from offering electronic publishing. The MFJ imposes long distance and manufacturing restrictions on Bell Companies to prevent them from using monopoly control to disadvantage their consumers and competitors in two principal ways. First, under the MFJ the Bell Companies cannot use profits earned from rates paid for monopoly local telephone operations to subsidize their long distance and equipment businesses. Monopolistic control over local telephone service makes it nearly impossible to prevent cross-subsidization of a variety of other telecommunications services with captive ratepayer dollars. Second, under the MFJ the Bell Companies cannot prevent competing long distance carriers and equipment manufacturers from gaining access to the local network, or to delay that access, thus placing them in an inferior competitive position. The local telephone network is key to the Bell Companies' potential monopoly over telephone service. It functions as the gateway to individual telephone subscribers, and must be used by long distance carriers to connect one caller to another. The immense cost of wires, cables, switches, and other transmission facilities which comprise the local network could insulate Bell Companies from competition. The Brooks/Dingell Antitrust Reform Act of 1993 would ensure that Bell Companies compete freely in new telecommunications markets. The bill was introduced on the same day as the Markey/Fields telecommunications infrastructure bill, H.R. 3636, which incorporates EFF's open platform proposal. EFF's open platform proposal is designed to give residential subscribers access to voice, data, and video digital telephone service on a switched, end-to-end basis. Unlike the Markey/Fields bill, the Brooks/ Dingell antitrust bill does not focus on infrastructure and competition issues. LONG DISTANCE The bill gives the Attorney General and the Federal Communications Commission (FCC) the authority to make a public interest determination before a Bell Company could offer competitive services. The bill requires the Attorney General, when granting a Bell Company application to provide interexchange telecommunications, to make a finding that there is no substantial possibility that the Bell Company or its affiliates could use monopoly power, for example by preventing access to networks or using profits earned, to impede competition in the market it seeks to enter. The Attorney General could make such a finding only if the evidence clearly and convincingly supports it, and the FCC could grant the request only if it is consistent with the public interest, convenience, and necessity. The FCC would be required to consider whether granting the request would affect consumers' rates and expedite delivery of new services and products to consumers, and whether the applicant will be precluded from engaging in coercive economic practices such as predatory pricing and collusion. The bill extends the right of judicial review in the U.S. Court of Appeals for the District of Columbia to companies aggrieved by the Attorney General and FCC determinations. The bill vests responsibility at the federal level for making a public interest determination before a Bell Company could offer competitive services, but it does not require a state finding that the public interest is served if the Bell Company gains access to the market. H.R. 3626 segments the long distance market into several submarkets: intrastate; interstate/regional; interstate resale; and nationwide networks. 1. Intrastate: The provision of intrastate long distance service was regulated by the states until the breakup of AT&T. Under H.R. 3626, state laws or regulations would no longer pose a barrier to a Bell Company seeking to offer in-state long distance service. 2. Interstate/Regional: The Bell Companies currently operate networks throughout their regions, which are made up of many states, but they are restricted from using them for interstate long distance service. Under H.R. 3626, the Bell Companies could petition the Department of Justice and the FCC to use their own telephone networks to provide long distance service. 3. Interstate Resale: Resale services involve reselling bulk capacity from networks owned by carriers such as AT&T, MCI, and Sprint, to regional telephone companies on a "retail" basis. H.R. 3626 would allow Bell Companies to petition the Department of Justice and the FCC to provide interstate resale services 18 months after the date of enactment. Downward pressure on rates from the entry of new competitors into resale services potentially could cause a reduction in long distance telephone costs for residential customers. 4. Nationwide Networks: H.R. 3626 would allow Bell Companies to petition the Department of Justice and the FCC to build and operate interstate networks outside of their regions 5 years after enactment. MANUFACTURING Within a year of enactment, H.R. 3626 would lift MFJ restrictions and allow a Bell Company to submit an application to the Department of Justice to engage in manufacturing of telephone equipment. The Bell Company would then be free to engage in manufacturing unless, within the following year, the Attorney General enjoins the company from going forward. H.R. 3626 would allow a Bell Company to engage in manufacturing activities through a separate subsidiary, and would be prohibited from cross- subsidizing its manufacturing. H.R. 3626 would require the Bell Company to conduct all manufacturing in the United States, but some components not available from U.S. sources could be used. The bill would require a Bell Company to provide functionally equivalent equipment to competing manufacturers, but leaves undefined the term "functional equivalent." The bill would require Bell Companies to maintain and file with the FCC information on protocols and technical requirements for connection and use of its telephone exchange service facilities. It does not, however, mandate full digital interconnectivity, which is the minimum standard necessary to achieve democratic, open platform goals. BURGLAR ALARM SERVICES H.R. 3626 would allow Bell Companies to apply to the Department of Justice to offer burglar alarm services 5 1/2 years after enactment. The Attorney General and the FCC would be required to make determinations that the entry of a Bell Company into the burglar alarm business is appropriate. Provision of burglar alarm services would be subject to post-entry restrictions, designed to ensure that Bell Companies compete faily in the new markets. ELECTRONIC PUBLISHING H.R. 3626 provides that Bell Companies could engage in electronic publishing only through separate affiliates or electronic publishing joint ventures. By increasing the visibility of electronic publishing business transactions, these safeguards are designed to alleviate the risk that Bell Companies could stifle the efforts of other electronic publishers or acquire a substantial monopoly over the generation of news. The bill would allow a Bell Company or affiliate that participates in an electronic publishing joint venture, with non-Bell Companies or affiliates, to maintain up to a 50 percent direct or indirect equity interest in the joint venture. For joint electronic publishing ventures with small, local electronic publishers, a Bell Company may have, for "good cause," an ownership interest up to 80 percent. The statutory restrictions in the legislation would sunset in four years. To prevent anticompetitive behavior, the bill would require a Bell Company to provide the same information to its competitors as it uses itself. The bill also would allow inbound telemarketing or referral services by the Bell Companies for electronic publishing affiliates. As a matter of privacy, however, the bill does not provide protection for customers who do not want to make information gathered about them by the Bell Companies available for marketing or other purposes. NETWORK ACCESS FOR DISABLED COMMUNITY H.R. 3626 also includes provisions designed to ensure that equipment and network services are accessible and usable to disabled individuals, unless the costs of making equipment accessible and usable would result in an undue burden or an adverse competitive impact. ***** The Brooks-Dingell bill is available online from EFF by anonymous ftp to ftp.eff.org, pub/eff/legislation/hr3626. --==--==--==-<>-==--==--==-- Subject: NTIA Announces Universal Service Hearing December 2, 1993 WASHINGTON D.C -- Assistant Secretary for Communications and Information Larry Irving announced today that the National Telecommunications and Information Administration (NTIA) and the New Mexico State Corporation Commission (NMSCC) will hold a public hearing on "Communications and Information for All Americans: Universal Service for the 21st Century" on December 16, 1993. The hearing will take place from 8:00a.m. to 5:30p.m. at the Technical Vocational Institute's Smith Brasher Hall, 717 University, S.E. (Room SB-100), Albuquerque, New Mexico. The Administration's initiative on the National Information Infrastructure (NII) seeks to extend the Universal Service policy to reflect the information needs of the United States and its citizens in the 21st Century. Traditionally, in the United States, Universal Service of telecommunications has centered on achieving widespread availability of basic telephone service at affordable rates. As telecommunications and information technologies have converged and advanced, the need to redefine the concept of Universal Service has increased significantly. Through this hearing, NTIA and the NMSCC seek public comment on: * the effectiveness of today's Universal Service policy as it relates to basic telephone service; * how the present Universal Service policy may be improved and expanded; * who should pay to support a broader, more modern Universal Service policy; * what information and network services should be included in a modernized definition of basic services; and * how the government and the private sector can work together to inform the public about and prepare for the new Information Age. This hearing will be the first of a series of universal service and universal access hearings sponsored by NTIA to be held across the United States seeking public input and discussing government telecommunications policy. The hearing is open to the press and public at no charge, but space is limited. To register in advance, please contact NTIA at: Voice 202/273-3366, BBS 202/482-1199, Internet nii@ntia.doc.gov Contacts: James McConnaughey, Joann Anderson, or Alfred Lee at 202/482-1880 Press Contact: Larry Williams 202/482-1551 FAX: 202/482-6173 --==--==--==-<>-==--==--==-- Subject: Late Breaking News - Digital Telephony Threat Returns According to FBI Dir. Louis Freeh, the development of sophisticated digital telecom and networking technology threatens the ability of the Feds to wiretap. In a Dec. 8 speech at Washington's National Press Club, Freeh annouced a renewal of the FBI's 'Digital Telephony' legislation scheme: the return of the controverial 'Wiretap Bill'. The bill is strongly opposed by organizations and individuals concerned about privacy, as well as the telecommunications and computing industries at large. The FBI's 'need' for this legislative action is under review by the Administration as part of its examination of security and encryption issues. The reappearance of this Bureau effort contradicts statements by Special Agent Barry Smith of the FBI's Congressional Affairs Office, who stated less than a month ago that the 'Wiretap Bill' had been tabled. According to classified documents released under the Freedom of Information Act (FOIA), the FBI and the Electronic Communications Service Provider Committee or ECSPC (an ad hoc industry working group) are working on technical solutions to satisify law enforcement. According to a Nynex rep co-chairing the group, Kenneth Raymond, no solution has yet been found, and the FBI has yet to prove any solution is needed at all. Raymond likened Freeh's tactics to "yelling out the window" - an attention-getting move that needs some sort of clarifying followup. Though the ECSPC claims to be attempting to evaluate the problem and to solve it in a way "consistent with cost and demand", Raymond indicated that the group considers one 'solution' to be building wiretap access into future telecom hardware - like the Clipper chip backdoor, but a 'feature' of all switch specifications for phone and data lines. This news was just received, and a more detailed analysis and statement from EFF will follow soon. [summarized from Communications Daily] --==--==--==-<>-==--==--==-- Subject: What You Can Do Did you know ... Congress is currently making decisions that will affect your ability to communicate in the future? Who's protecting your interests? The Electronic Frontier Foundation (EFF) is working with legislators to make sure that principles guaranteeing free speech, privacy and affordable service to consumers are written into new communications legislation. Rep. Edward Markey (D-MA) has already incorporated much of EFF's Open Platform vision into his NII proposal (bill H.R. 3626). But the fight is not yet won. The only way to make sure that future networks will serve *you* is to become involved. Join EFF and receive regular updates on what's happening and action alerts when immediate action becomes critical. Blind trust in the system won't help you. Take control of your future. Join EFF today. --==--==--==-<>-==--==--==-- EFF MEMBERSHIP FORM Return this form to: Membership Coordinator, Electronic Frontier Foundation, 1001 G Street, NW, Suite 950 East, Washington, DC 20001 MEMBERSHIP YES! I wish to become a member of the Electronic Frontier Foundation! I would like to join as a _Regular Member $40 _Student Member $20 I would like to make an additional donation of $ _Enclosed is a check payable to the EFF in the amount of $ _Please charge my _VISA _MC _AMEX Card #: Exp Date: Signature: CONTACT INFORMATION: Name: Address: Telephone: Fax: E-mail: I prefer to be contacted by: US Mail o E-mail PRIVACY POLICY: We occasionally share our mailing lists with other organizations promoting similar goals. However, EFF respects the individual's right to privacy and will not distribute your name without explicit permission. ___ I grant permission for EFF to distribute my name and contact information to organizations sharing similar goals. The Electronic Frontier Foundation is a nonprofit, 501(c)3 organization supported by contributions from individual members, corporations, and private foundations. Donations are tax-deductible.