Telecommunications and Information Services - Telling Them Apart

The discussion of network neutrality in the US refocuses attention on the distinction between telecommunications and information services. As I mentioned in the previous article, it is largely an artificial one, but one that resulted from the FCC's long efforts -- this goes back 25 years or so -- to draw a bright line between industry sectors and the need for distinct modes of regulation for each. This came about long before the web was invented and before the internet became a subject of public knowledge, when digital switching and modem usage became widespread.

I will begin by reviewing the technicalities of how the law distinguishes between telecommunications and information services before moving onto the present choice that the FCC is taking and why it matters. Here are the two definitions from the US Code that are most relevant to us:

(20) Information service
The term “information service” means the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.

(43) Telecommunications
The term “telecommunications” means the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.

These are pretty clear, so I only need to note that there are additional sub-definitions for telecommunications, and the one for telecommunication service is merely one of offering telecommunications to the public for a fee. Let's compare telecommunications and information services by means of the two attributes that most distinguish them:

• Transformation
• Store and forward

Transformation would seem to be a simple enough attribute, where a service is telecommunications if the provider does not "change...the form or content of the information as sent and received" by the user. With digital switching and transport it turns out to be more complex than one might at first imagine.

The telephone network is optimized to human speech, covering frequencies up to about 4 kHz. This is far from high fidelity: compact discs (CD) employ 44 kHz sampling to accurately reproduce frequencies up to 20 kHz, whereas PCM digital codecs for telephony sample at 8 kHz. However there are many codec standards to accomplishing this task. Your voice may be transformed many times between your microphone and the other party's speaker, including from and to analogue at each end. There are a variety of PCM standards in the wired network, plus more for wireless (e.g. AMR) and for VoIP. The bit stream is transformed at each boundary between these network domains.

What saves this type of transformation is that ultimately it's your voice in, your voice out (there are even more nuances in voice-band transmission, but let's not get too detailed). Therefore despite all this transcoding, adding and subtracting and other things, this is still telecommunications. If, however, you utilize a service that modifies your voice to disguise your identity, that is not telecommunications since the transformation is substantive and not incidental; this is an example of a simple information service.

Store and forward is more interesting. It should be self-evident that services like email and voice mail are information services since there is explicit storage and forwarding involved, which we can consider as one extreme. At the other is the many instances of bit-stream storage and forwarding (switching and transport) that is an unavoidable artifact of digital switching. Unlike analogue transmission and switching, there is buffering at many intermediate locations for even an ordinary circuit-switched voice call. It's brief and usually unnoticable, but there is a measurable latency compared to analogue. For some of the low-bit rate codecs occasionally used on VoIP services, the latency can be very noticable, though not as bad as on satellite circuits.

This type of store and forward is acceptable for a telecommunications service since it is purely incidental and due to the underlying technology, and because the service remains real-time in human terms. Messaging services like SMS and IM are pseudo-real time since messages may indeed be stored, or even lost or left undelivered. These would likely be classed as information services. I say "likely" since they have not been as thoroughly tested as some other services since they came about more recently, after the advent of mandated competition which tended to make these questions less important.

There is a side-effect of declaring internet services, including broadband, as information services -- which they were -- because it implies that any use of those services is also an information service. Since IM is in this category, but not SMS, its store and forward attributes become largely irrelevant. More fundamentally, while IP packet switching in the internet is substantially equivalent to real-time voice calling -- no substantive storage and forwarding or transformation -- it has been classified as an information service purely as a policy matter so that it could escape undue regulatory control.

With VoIP this policy approach became problematical. Like legacy voice calling, VoIP does meet the test as a telecommunications service, whether as a stand-alone service or when bundled in an application such as IM or Skype. This is a subject I've covered before, where I talked about the duck test: if it quacks like a duck, walks like a duck and looks like a duck, it's a duck. Except, VoIP is an application on top of an information service. This is the type of conflict we can expect when regulators get too specific in their classifications. Technological innovation and the free market always move faster than regulators and governments.

In my next article I'll talk about where I think this is all heading, and how the future of internet and broadband regulation is likely to go. The FCC's present inclination to reclassify broadband service as a telecommunications service is likely to play an important role in the future that I foresee.