Posted by Barlow Keener

Reregulation is a rarely used term in the U.S. telecommunications lexicon.  The term though is being popularized in the banking and airline industries.  Even the tough former American Airlines CEO Robert Crandall in April 2008 encouraged some reregulation of the airlines:  “Adding some sensible regulations …needed to give our airlines opportunities for success would be a far better way to safeguard that economic contribution than further airline consolidation.”    While I do not think the five FCC Commissioners have intentions of reregulating the telecommunications industry, we are seeing, nevertheless, “creeping reregulation” occurring at the FCC on a service by service basis.  The purpose of the reregulation appears to be not to save or provide needed structure for a very competitive business but merely for the purpose of increasing the payments to the Universal Service Fund.    

On June 27, 2008, outside of the typical rulemaking proceeding which would have been expected for such a dramatic regulatory change,  the FCC issued the Conference Calling Classification Order declaring Intercall’s audio bridging service to be regulated “telecommunications” or possibly a  “telecommunications service.”     The public became aware of the audio bridging in the 1980’s when  end-users dialed a 976 or 900 number and, using audio bridges or “chat lines,” spoke with psychics, astrologists, potential dating partners, or friends.   Like all other unregulated information services, audio bridging relied on telecommunications “basic services”  for the transmission portion of the audio bridge which terminated to the information service provider’s computer server allowing callers to talk to each other, to record the call, to mute a particular caller, or to transfer into different voice chat “rooms.”     

Going backwards and reregulating a sector of the telecommunications industry not only stifles innovation and competition but may result in basic Title II regulatory mandates on the conference calling industry sector.    Once deemed a “telecommunications service,”  the FCC  imposes various regulations such as the requirement to interconnect, the ability to collect interstate carrier access fees,  CPNI compliance, CALEA, and making  tariffs available.   States can also begin regulating the conference calling companies with similar requirements.

The broad implications of deciding to go down reregulation side of the fork in the river are evident:  Will the Commission next declare a corporation providing its quarterly earnings report on a conference call service to be providing regulated telecommunications?   Will conference call services be considered regulated telecommunications where the moderator-participant is provided with the ability to allow some attendees to talk when they “raise their hands” by clicking on a web browser, the ability to mute at any time various participants, or the ability to record the call?   I do not know of any telecommunications tariffed service that allows users to record conversations.

If the FCC’s ultimate goal of reregulation is solely related to increasing the total amount in the USF fund, perhaps the Commission should consider other ways to achieve the goal.   What are your thoughts on reregulation?  Are there benefits to the FCC reregulating the conference calling industry?