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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.
-
- --==--==--==-<>-==--==--==--
-
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-
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