The First Amendment case against FCC IP telephony regulation.

• Author: Samahon, Tuan N.
• Position: Internet Protocol

1. INTRODUCTION

   At the present rate of digital innovation, the communications industry promises to be a fruitful one for technocratically adept communications lawyers, not only because digital innovation is so rapid, but because Federal Communications Commission (FCC or Commission) rule making continues to outpace new communications technologies. Notable in this category is a nascent communications technology, Internet Protocol (IP) telephony. In response to concerns about this technology's effect on universal access, the FCC has already crafted two new regulatory regimes.(1)

   Yet, in the race to regulate, the FCC may have overlooked the First Amendment. Although new digital "technologies of freedom"(2) allow unprecedented freedom of expression (and at democratic rates), Congress, the courts, and the FCC appear unwilling to acknowledge a First Amendment limit to digital speech regulation.

   This Comment argues that IP telephony, like handbills and traditional print media, deserves First Amendment protection against FCC regulatory authority. In Part II, this Comment briefly reviews the IP telephony phenomenon within the larger context of "digital convergence," or the interchangeability of new media, noting both the technological innovations and regulatory advantages IP telephony offers. Part III examines the FCC and Supreme Court's technologically driven First Amendment jurisprudence. In particular, this Comment notes the First Amendment's conspicuous absence from the IP telephony dialogue, and, correspondingly, the prominence of assurances of regulatory forbearance in Congress, the courts, and the FCC. In response to this apparent constitutional lacuna, Part IV offers First Amendment content-based and content-neutral arguments against the proposed telephony regulations. This Comment argues that, at the very least, the affordability and innovation IP telephony offers should constitute nontrivial factors in a court's content-neutral balancing. Finally, Part V proposes divorcing universal access funding from long-distance service. Such a policy alternative would avoid burdening the First Amendment values IP telephony serves as well as sidestep the category difficulties digital convergence creates.

2. DIGITAL CONVERGENCE AND THE IP TELEPHONY REVOLUTION

   1. From Data over Voice Lines to Voice over Data Lines

      Professor Ithiel de Sola Pool termed the "blurting [of] the lines between media" where a "single physical means ... may carry services that in the past were provided in separate ways" as the "convergence of the modes."(3) Whereas in the past one means existed to communicate in a particular way, such as telephones for one-to-one voice communication, now multiple technologies exist to carry on personal instantaneous voice communications.(4) Once speakers sent data transmissions over telephone lines built for voice; now the end-user can send voice, along with video, text, or any other message, over lines built for data.(5) Digitalization, or the use of ones and zeroes to represent real world data, has eroded the traditional mapping of one function to one technology by making information transmission interchangeable.(6) Such is the case with IP telephony.

   2. IP Telephony Industry Growth

      Internet protocol telephony, as its name suggests, originated with software that allowed phone voice transmissions across the public Internet. This early phone client software required that each speaker be connected to the Internet from adequately equipped personal computers in order to make and receive calls. Even if the concerted effort to communicate succeeded, voice quality was typically poor. More advanced offerings improved voice quality and added additional modes of communication, including real-time text or chat.(7) Internet protocol telephony users could not only speak together, but also review the same manuscript together, even at a distance. Still, expensive computer hardware limited widespread Internet phone use.

      Since these early internet phones, IP telephony has gone mainstream and no longer remains the sole domain of "miserly geeks."(8) Whereas Internet phone client software once required a simultaneous Internet connection on two or more personal computers, IP telephony eliminates the need to dial from a computer. Instead, a caller dials a "gateway" or computer hardware that connects a speaker's phone-initiated call to an IP network; the caller then dials the desired phone number and the gateway completes the call to a standard phone handset.(9) In order to improve voice fidelity, some IP telephony firms have begun to create private IP networks, allowing better sound quality by transmitting uncompressed voice data.(10) These IP networks route part of the call over the busy public Internet, though calls largely travel on the less crowded private IP data networks.(11)

      Internet protocol telephony offers an alternative to traditional analog telephony. Old phone networks require a connection to be constantly established and opened to continue voice communication. Dedicated circuit-switched technology transmits not only discussion content, but also silence.(12) As a result, switched technology inefficiently ties up phone resources. Most phone services do not convert analog voice data into different formats during phone calls; instead, the phone lines carry the analog voice patterns through the switched phone connection uniquely dedicated to the call at hand. Only when the parties terminate their phone call is the circuit-switched network freed. In contrast, the various incarnations of Internet telephony convert analog voice into digital data, compress the data, and split the data into "packets" that are "routed" across different IP network paths and reassembled and decompressed as voice output at some distant destination.(13) Digital technology's indifference to analog input allows print, audio, video, and any other sort of data to be transported via the Internet protocol. World Wide Web pages are similarly transmitted as packetized data. Since IP networks divide data into individual packets and send them through the most efficient routes, IP networks allow for more information transmission than traditional circuit-switched networks.(14)

      As a result of its low price and its new ease of use, analysts predict IP telephony will boom.(15) Whereas less than a half percent of long-distance telephone calls are presently placed over the Internet, by 2003, the IP telephony market share will have grown to some 10 to 15 percent of domestic long-distance calls.(16)

   3. IP Telephony's Regulatory Advantage

      Presently, the FCC heavily regulates long-distance phone calls, requiring long-distance companies to pay a local exchange carrier (LEC) for connecting and completing their calls. In turn, the long-distance phone companies pass these "universal service" fees to phone callers as higher costs. Traditional long-distance companies, like AT&T and MCI, pay local phone companies approximately $.05 to $.06 per minute per call :for using their local networks to begin and end long-distance calls.(17) Since some competitive long-distance evening rates approach $.10 per minute, $.05 to $.06 per minute in universal service fees represents approximately half of a caller's costs to communicate, excluding federal excise taxes. In short, universal service charges cut in half a phone caller's ability to communicate long-distance by doubling the cost to do so.

      In contrast, the Telecommunications Act of 1996 (Act) definition of "information services"(18) allows IP telephony to escape universal service charges by not billing information services and their data transmissions universal service charges.(19) Under traditional categories perpetuated by the Act, telecommunications law conceived of voice telephony as the realm of point-to-point "telecommunications" and data transmission as the realm of "information services"; but now digitalization permits voice to be both telecommunications and digital data. Herein is IP telephony's biggest cost advantage: Since IP telephony transmits voice as digital data like "information services" rather than analog "telecommunications,"(20) users escape the costly long-distance access fees that feed universal service.(21) Consequently, part of IP telephony's attraction is its price.(22) As a result, the FCC and several rural senators have cried foul and sought to remedy the access charge-free phone calling by closing the "loopholes" and making long-distance phone callers meet their "obligations" to universal service(23) by classifying IP telephony as "telecommunications"; those that operate IP telephony firms as "telecommunications carriers"(24) regulated as common carriers; and their offerings as assessable "telecommunications services.(25)

3. FIRST AMENDMENT REGULATORY DIVERGENCE AND IP TELEPHONY

   1. Regulatory Divergence: Different Media, Different Rules

      Although "convergence of the modes" unites media through digitalization, past Supreme Court jurisprudence has fractured the First Amendment along traditional media lines. In Kovacs v. Cooper, the Court reasoned that each media was "a law unto itself."(26) Similarly, in Red Lion Broadcasting Co. v. FCC, although the Court did recognize the broadcast media's First Amendment interest, the Court created a different rule for that medium.(27) In fact, the Court has defined separate legal regimes governing print publications, telephony, broadcast, and cable television each with differing degrees of media protection because of their differing characters.(28) Rather than create a First Amendment standard covering all expression, the Court has created medium-based rules.(29)

      However, more important than an aesthetic complaint about the Court's media driven First Amendment doctrine is a substantive concern about freedom of speech. Substantively, one's rights differ depending on the medium of expression and its corresponding First Amendment status. While the government may not...