Visiting
Fellow
Since the Third Computer Inquiry rules
were adopted in 1986, the FCC has received multiple rounds of comments,
including in an outstanding
rulemaking proceeding, concerning whether the rules should be eliminated. Despite
its recognition that the market has changed drastically, the FCC recently denied
a US Telecom request for forbearance from these rules. Instead it once again requested
comment on the rules’ elimination. The available evidence justifies that these
rules should promptly be consigned to the graveyard reserved for outdated
regulations.
The Computer III rules established a complex
framework that was designed to enable independent “enhanced services” providers
to purchase piece parts of the analog telephone network. These rules now apply
only to three companies in a growing field of wired and wireless network
providers of considerable size and strength.
Some rules
have been streamlined (in its recent forbearance order the FCC rightfully
eliminated thousands of annual pages of compliance reports) and the Computer III rules for broadband have largely
been eliminated.
Notwithstanding, the substantive rules remain in place for a much narrower
category of so called “narrowbanding” enhanced services. The Commission specifically
identified only a small number of voice mail and alarm monitoring service
providers that currently rely on Computer
III functionality.
US Telecom
demonstrated
that these “narrowbanding” services are being provided today over broadband and
cable TV networks without reliance on Computer
III functionality. Current evidence of competing facilities-based network
platforms provide alternatives that justify eliminating the substantive Computer III rules.
Computer III was adopted when telephone
service was largely a monopoly. Since then, multiple network platforms provide
a communications path into the home. In 2010, Cable
MVPD facilities passed 98.5 percent, and wireless
services covered over 97.8 percent, of homes. Over 93 percent of Americans in
2012 could
receive wireline broadband services at 3 Mbps download speeds or greater.
In its denial
of US Telecom’s forbearance request, the Commission asserted that it needed
evidence that alternative services were available on competitive terms. This
focus was overly narrow and misplaced. The Commission should instead evaluate
the technological capabilities of alternative network platforms to determine
whether there is a sufficient competitive alternative to Computer III-compliant facilities. The FCC engaged in such an
inquiry when it deregulated wireline broadband without looking at specific
prices. The same type of inquiry for narrowbanding enhanced services would
demonstrate that competitive alternatives do exist, which would promote
reasonable terms. There is thus no reason to force Computer III carriers to identify irrelevant information that they
may not even be able to access in the first place.
Given the
existence of competing alternative platforms, there is little need to be
concerned that either consumers or providers could not find “enhanced” services
without the legacy rules. In the past, the Commission has solved this type of potential
disruption to consumers and providers through limited grandfathering, such as
it did when wireline broadband was
deregulated. With a reasonable time to locate an alternative source of
supply, there is no further need for continued regulation to assure consumer
protection.
The FCC
should not retain rules solely to protect existing business plans or services. Both
the FCC and the antitrust laws have long refused to protect individual competitors
rather than competition. Freezing services in place stifles innovation and
unnecessarily increases carrier costs.
The
Commission has admitted that the Computer
III requirements are burdensome. Other public interest benefits support
elimination. As the Commission found when deregulating wireline broadband, eliminating
Computer III is in the public
interest because it would promote innovation and investment, and reduce
compliance costs. And unnecessary rules should be repealed in any event because
they skew competition, harming consumers.
It is also
ironic that the FCC elsewhere has announced
that it needs to promote conversion to a modern network to promote broadband
and meet other goals. Its stubborn retention of legacy rules applicable only to
the analog PSTN, such as the Computer III
rules, potentially works at cross purposes with these other goals.
In its NPRM
to explore elimination of the remaining Computer
III rules, the Commission should rely on available evidence to eliminate
these unnecessary rules without further delay. Competition will continue to
make available services consumers desire through a variety of platforms. Computer III: Rest In Peace.
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