The Rise of Quasi-Common Carriers and Conduit Convergence

Abstract

The technologies that deliver content to consumers have begun to converge into a single Internet-driven conduit. Such convergence supports a consolidation of previously stand alone markets as evidenced by the ability of ventures to offer a “triple-play” bundle of Internet-delivered video, data and telephone service. Converging technologies and markets eliminate a sharp and identifiable distinction between the service classifications created by Congress and applied by the Federal Communications Commission (“FCC”). The Commission faces a regulatory quandary in maintaining a clear regulatory dichotomy between carriers operating as private conduits versus carriers subject to government oversight. The former can deliver content, software and services largely free of government regulation while some in the latter category operate as common carriers bearing public utility obligations, while others incur FCC-mandates to carry video content and place it on particular channel locations. This paper will examine whether and how converging technologies and markets provide an opportunity for the FCC to impose more forms of quasi-common carrier duties on ventures that otherwise would qualify for limited or no regulation. The paper will examine a recent court affirmance of the FCC’s requirement that all cellphone companies provide subscribers of other carriers “roaming” access to data services, despite the classification of Internet access as a largely unregulated information service. The paper also will examine previous instances where courts have affirmed FCC decisions to impose quasi-common carrier duties, such as the mandatory carriage of local broadcast television signals. The paper shows how the FCC has found ways to impose quasi-common carrier duties on ventures providing convergent services even though these ventures appear to qualify for little, if any, regulation. The FCC may have devised ways to respond to changed circumstances and the rigidness of congressionally crafted service definitions. However such flexibility generates regulatory uncertainty and the potential for the Commission to exceed its statutory authority. The paper concludes that the FCC will consider applying quasi-common carrier duties on private carriers without certainty about the permissible reach of this option.