Wednesday, August 07, 2013

Cisco's WebEx Looks Like An Information Service

I'll be the first to admit that in any new comprehensive overhaul of the Communications Act, the current regulatory distinction between unregulated "information services" and regulated "telecommunications" services probably shouldn't survive -- along with the rest of what we commonly refer to as the "stovepipe" definitional constructs in the current statute. In a new Digital Age Communications Act, the FCC's regulatory jurisdiction over all electronic communications services should be much more constricted. And in the exercise of that jurisdiction the Commission should be required to focus on market failure and consumer harm -- not a vague "public interest" standard.

But all that still lies in the future. What caught my eye today was the August 5 ex parte letter I came across in which Cisco is arguing that the USAC erred in not accepting Cisco's unbundling of its revenues related to its online WebEx service for purposes of excluding certain revenues from the amount subject to USF contribution payments. Cisco contends the excluded revenues are derived from WebEx's information.

 I haven't taken a "deep dive" into this dispute between Cisco and USAC. But I will say this: As someone who was involved throughout the 80s and much of the 90s in litigating the distinction between what were then called "enhanced" and "basic" services -- now the very same "information services" and "telecommunications services" that succeeded to the earlier definitions -- and as someone who is familiar with all the major precedents involving the distinction, it does seem to me that Cisco's description of the features of the WebEx online interactive service places it within the confines of the "information services" category.

It is only natural that USAC has an incentive to want to expand the services subject to USF contribution payments to the extent possible. Again, this is only natural. But if the effect of its decisions is to narrow the understanding of what constitutes an "information service," the consequences can be far-reaching. This is because the FCC would then have authority to regulate as telecommunications services previously unregulated information services.

So, hopefully, the FCC will give careful consideration to Cisco's appeal -- not because there should forever be a distinction in our communications laws between information services and telecommunications services, but because there is one today, and there are good policy reasons for adhering to the current law and precedents.