INTERNET AND INFORMATION SERVICES
Johannes M. Bauer
Department of Telecommunication
Michigan State University
The Internet is rapidly becoming a platform for the delivery of services
that were traditionally in the domain of other telecom service providers,
such as telephone companies. In the wake of the struggle of these
established service providers to defend their market shares, an intense
battle over the proper regulation, if any, of the Internet has ensured.
In addition, many groups argue in favor of or against more stringent content
regulation of cyber-networks. In this module you will look into the challenges
posed by the Internet to the established model of telecom policy. You will
also get an overview of a host of issues raised by new information and
communications technologies, such as privacy, security, and challenges
to intellectual property law.
INDUSTRY ORGANIZATION AND REGULATION
Internet and information services are offered by several thousand organizations. The Internet is essentially a network of networks. Access to the Internet is a combined service, consisting of local access services (dial-up, cable modem, DSL, wireless, or satellite), gateway services into the Internet, and the content available on Internet hosts. Internet hosts are recognized by unique addresses (IP addresses). Information can is stored in Internet hosts and often mirrored to other sites to optimize traffic flows. Three major groups of players are involved in the supply of Internet and information services.
Backbone service providers, like UUNet, PSINet, Global Crossing, or Level 3 Communications, build and operate the high capacity national and international networks linking major cities and nodes on the network. The network of the different service providers are interconnected at multiple points, most importantly Network Access Points (NAPs) such as San Francisco, Chicago, or New York City. In addition, regional backbone networks, such as Merit in Michigan serve smaller communities.
More than 6,000 Internet Service Providers (ISPs) such as Voyager
provide access to the Internet but typically no or only limited content.
Online Service Providers such as America Online
or Prodigy typically provide content
in addition to Internet access services. Portals like Yahoo
or Excite bundle content with news
and allow registered users to customize their virtual space and interface.
In addition, the industry flourishes due to the activities of content providers,
often organizations in the educational area, or news and entertainment
Brief history of the Internet
The Internet developed from ARPANET a network built in the 1960s with funding by the U.S. Department of Defense. In the 1970s and 1980s, this network expanded to link several university campuses. To allow communication between different networks, a common protocol, the Telecommunications Protocol/Internet Protocol (TCP/IP) was developed. Based on this non-proprietary, open standard, the Internet could evolve as a network of networks, constructed by many different service providers.
In the 1980s, the National Science Foundation (NSF) launched NSFNet to connect 6 supercomputing centers. Construction of the T1 backbone was outsourced to private vendors such as IBM and MCI. In 1990, the civil part of ARPANET was retired. In 1995, public funding for NSFNet expired and the transition to a fully commercial backbone was accelerated. NSF continued to fund certain activities such as the development of the vBNS (very high performing Backbone Network Service) one of the backbones of Internet II operated by MCI. The Internet II project, led by over 170 U.S. universities working in partnership with industry and government, is developing and deploying advanced network applications and technologies. It consists of many networks including Abilene and other peer networks. The University Corporation for Advanced Internet Development (UCAID) develops the Abilene network. Abilene and other Internet2 backbone networks will run initially at a speed of OC48 (2.4 gigabit per second) to increase to OC192 (9.6 gigabit per second).
In the early days of the Internet, a governance structure of self-regulation
was put into place to solve issues of common interest. As the network grew
more complex this governance structure also evolved although the character
of self-regulation was maintained. Currently, several organizations are
involved in the discussion of issues affecting the Internet. These icnlude
the non-profit Internet Society (ISOC),
the non-profit Internet Corporation for
Assigned Names and Numbers (ICANN), or the Internet
Assigned Numbers Authority (IANA).
Regulation of the Internet and information services
The Internet evolved with government funding in an essentially unregulated environment. The main challenge posed by the Internet is its ability to deliver a broad range of services via its digital network. Some of these services, such as voice over IP, are very close substitutes to voice telephone services offered by common carriers subject to public interest obligations. The question then arises, whether such services should be subject to a similar treatment from a policy point of view when offered over the Internet. Whereas the incumbent telecommunications service providers favor such a position, new players would like to keep the Internet free from regulation.
The freedom of the Internet from regulation dates back to the 1960s. In its three Computer Inquiries (1966-1985) the FCC found that information services should not be subject to the common carrier regulations of Title II of the Communications Act. The Telecommunications Act of 1996 affirmed this position be declaring that
Technological basis of the Internet
If you are not familiar with the technological bases of the Internet, you may want to review the following sources on the Web:
THE INTERNET AND TRADITIONAL TELECOM SERVICES
Regulation of the Internet and information services
Since the 1960s, the Federal Communications Commission (FCC) had struggled to clarify the relationship between traditional common carrier services and the emerging field information services, combining both computing and telecommunications services. In particular, the agency was concerned with whether regulated common carriers should be allowed to participate in the essentially unregulated computing business and if so, under what conditions. In its Computer I decision (1966-71), the FCC distinguished between communications, computing, and hybrid services. It determined that non-Bell telephone companies could enter data communications through a separate subsidiary. BOCs could not engage in data communications.
Several years later, in its Computer II Inquiry (1976-81), the FCC distinguished “basic” and “enhanced” services, which were defined as:
The Telecommunications Act of 1996 continued the differentiation between regulated telecommunications services and unregulated information services. Telecommunications services were defined as “the offering of telecommunications for a fee directly to the public or to such classes of users as to be effectively available to the public, regardless of the facilities used.” According to the Act, 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.” A telecommunications carrier is any provider of telecommunications services.
Information service providers “offer a capability for generating, acquiring,
storing, processing, retrieving, utilizing, or making available information
via telecommunications. They include electronic publishing, but do not
include any use of any such capability for the management, control, or
operation of a telecom system or the management of a telecom service.”
They are not regulated like telecommunication carriers and do not carry
the obligations of common carriers. However, the also do not enjoy the
privileges granted to telecommunications carriers by the Act. Thus, information
services have been outside of the scope of common carrier regulation since
the 1960s. As a result, the Internet could evolve in a largely unregulated
Status of information service providers
The Internet can be used as a platform to provide a broad range of services. These include newer services such as audio streaming, video streaming, database access or e-mail. Some of these services are more or less close substitutes to exiting services. Voice over IP is a substitute to traditional voice telephony services, which are regulated as common carrier services. Audio streaming could be considered as a substitute for radio broadcasting and video streaming as a substitute for television broadcasting or cable. In all these instances, the question arises as to how Internet services fit into the existing legal scheme, if at all. Figure 7.2 illustrates this point (from Kevin Werbach, 1997, Digital Tornado, p. 27).
Whether or not a particular service should be subject to specific legal rules is often decided by analogy with existing services. In the case of Internet services, no single analogy is superior to others. In fact, Internet services combine features of several other services. If Internet services were treated like interexchange services, ISPs would have to pay access charges to local exchange carriers. If an ISP were to be classified as a local exchange carrier, it would be subject to existing reciprocal compensation arrangements. Alternatively, Internet access could be treated like dial-up access to a corporate network, for which no such charges apply. Lastly, one could envisage Internet access like a catalog ordering business that receives many incoming calls. In this latter case also no access charges or reciprocal compensation charges would apply.
Another important issue that is dependent on the legal status of ISPs
is interconnection with existing networks. The Telecommunications Act of
1996 and the FCC’s subsequent Local Competition Order have determined that
only telecommunications carriers are eligible to request interconnection
and unbundled network elements under the conditions defined in section
251 of the Telecommunications Act. This means, for example, that they have
no legal claim to receive a wholesale discount. ISPs are not unprotected
though as common carriers have to make their services available at just
and reasonable, non-discriminatory conditions regardless of the legal status
of the requesting person. Thus, to benefit from the more stringent provisions
of section 251, an ISP would also have to provide telecommunications services.
On the other hand, if it were classified as a telecommunications carrier
it would also be subject to the obligations of section 251.
Internet telephony and webcasting
In 1996, America’s Carriers Telecommunication Association (ACTA) petitioned the FCC to treat Internet telephony (“voice over net” or VON) according to common carrier rules to avoid different treatment of existing carriers and Internet-based voice service providers. The FCC decided not to treat ISPs based on the interexchange carrier analogy. Thus, ISPs do not pay access or origination charges for traffic originating from a local exchange network (however, ISPs often lease lines from LECs). In part, this stance by the FCC is based on the fact that Internet telephone service is currently only a weak substitute for traditional voice services, whose quality is generally much higher.
Real-time audio and video streaming has features similar to broadcasting and cable television services. Broadcasting is subject to specific market access (licensing) rules that do not apply to the Internet because it does not use spectrum. The U.S. Supreme Court sees spectrum scarcity as one of the main reasons to permit regulations of content (e.g., political programming rules, advertising rules). Broadcasters have begun to use the Internet as a complement to their over-the-air programming and do currently not demand that streaming services be treated like traditional broadcasting. In fact, if the Internet would expand the number of delivery options that are available, less regulation of broadcasting or cable could be justified.
Internet access platforms
The Internet and information services can be accessed using different technologies. These differ in features such as the download and upload speeds, the available choice options among service providers, monthly costs, and the installation costs (see table 7.1).
Selected features of Internet access technologies
(Source: PC Magazine)
Currently most widespread is dial-up access via a modem (modulator-demodulator), a device that converts the digital representation used in computers into an analog form that can be transmitted via the circuit-switched telephone network. Dial-up access provides relatively low download speed. It uses a dedicated circuit and thus ties up a phone line, which cannot be used for another purpose while used for Internet access. The cost consists of the phone line (which a user may subscribe to anyway) plus the charge for the ISP. Users generally have limited choice among local phone companies but plenty of choice among ISPs.
With the availability of more elaborate content on the Internet that is more information intensive, demand for faster Internet access has surged. Several broadband access technologies are available. Digital Subscriber Loop (DSL) technology adds a digital channel to the existing analog voice channel. This is accomplished with additional equipment at the subscriber and switch side of the local loop. At the switch, the two channels are split and the voice signal routed through the circuit-switched voice system. The data is routed through a packet-switched network. DSL technology provides a much faster connection, has an “always on” feature, and allows the simultaneous use of the phone line for voice and data communications. The main disadvantage for DSL is that it is only available within 20,000 feet of the central office. Moreover, the available speed varies with the distance from the central office.
During the past two years, the cable television industry has invested heavily into upgrading one-way cable systems into interactive systems that can provide fast Internet access. Cable modems allow speeds of up to 4Mbps, have the always on feature. Cable broadband access is configured as a local area network. The download speed slows with the number of users that are online simultaneously. Currently, most of the 2-3 million cable modem users cannot choose their ISP but have to subscribe to the cable company’s affiliated ISP (e.g., Excite@Home with AT&T Cable). As will be discussed in the next section, a heated policy debate is currently conducted on the conditions under which independent ISPs can purchase the broadband platform from cable systems.
Lastly, consumers can access the Internet using wireless services. Satellite-based
systems, such as Hughes Electronics’ DirecPC download information via a
satellite link. In addition, the user needs a regular phone line and a
dial-up modem to send control information (e.g., the name of a particular
Internet host) to a network center which then uplinks the requested information
from the identified source. Fixed-point wireless systems are located in
the 28 GHz frequency band and can provide very high data communications
speeds. A line of sight is required between the transmitter and the receiver.
Broadband wireless Internet access services is in an early stage of development.
It must not be confused with new emerging Internet platforms that use wireless
phones as terminals. These protocols, like the Wireless Access Protocol
(WAP) deliver only allow a substantially downscaled version of full-fledged
Regulation of Internet access
In section 706 of the Telecommunications Act of 1996, Congress expressed its intention to facilitate the deployment of advanced telecommunications capabilities. It demanded that “the (Federal Communications) Commission and each State commission with regulatory jurisdiction over telecommunications services shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans.” Section 706 defines “advanced telecommunications capability” as “without regard to any transmission media or technology...high-speed, switched, broadband telecommunications capability that enables users to originate and receive high quality voice, data, graphics, and video telecommunications using any technology” (Westbury, 1999).
Broadband access to Internet services is an important aspect of the availability of advanced telecommunications capability. In spite of this expressed priority, policy approaches to broadband access are currently fragmented and provide for a different treatment of the various access options. In an Order in December 1999, the FCC clarified that the principles of section 251 apply to the provision of DSL service by ILECs. ILECs have to make DSL services sold directly the end-users available to third parties at discounted wholesale prices according to section (251(c)(4)) of the Communications Act. However, if ILECs sell bulk DSL loops to ISPs as an input to their provision of Internet access service, ILECs are not subject to the discount requirement. Such services are only covered by the common carriage rules of non-discrimination, as well as just and reasonable pricing.
The situation is different with respect to cable modem service. No general
obligation exists currently for cable systems to make broadband loops available
to independent ISPs. The cable industry argues that its ability to upgrade
the one-way cable systems into two-way systems depends on its ability to
sell both the modem and Internet service. ISPs on the other hand are worried
that they may not be able to acquire the broadband access services required
by their customers. Individual cable franchising agencies, such as Portland,
Oregon, have demanded that cable systems sell their services at non-discriminatory
conditions to third parties. The FCC is currently unwilling to impose general
open access conditions onto cable systems. Most people agree that the vibrant
competition in dial-up access services (more than 6,000 ISPs in the U.S.)
could evolve because of the availability of an open access telephone network.
Thus, maintaining the closed access model for cable systems may slow down
the further diffusion of broadband access.
Westbury, Robert (1999). Cable Open Access. Unpublished Manuscript,
East Lansing: Michigan State University.
LIBEL, PRIVACY AND THE INTERNET
Libel is dealt with at the state level as a part of tort law. Libel is a written communication that harms a person’s reputation, ability to enjoy social contact with others, or the ability to work or engage in business practices. Since the 1950s, communications on radio and television are considered a form of libel. Libelous statements include communications accusing a person of involvement in criminal activity, sexual slurs, certain political and religious statements, and communications involving business dealings with criminal elements. To win a libel suit, private persons have to demonstrate that defamation occurred, the statement was published, identification of the person took place, and that the statement was made with fault. In New York Times v. Sullivan (1962) the U.S. Supreme Court found that in the case of public officials fault was insufficient. In the case of public persons, in whose affairs the public has an increased interest and who have voluntarily sought public stature, actual malice has to be demonstrated to win a libel suit.
The Internet raises many challenging issues with respect to defamation.
First, it allows publication of statements with relatively simple means.
Second, these statements can reach very large audiences. A key question
is whether the operators of interactive computer services should be responsible
for defamatory content on their systems. Prior to the Telecommunications
Act of 1996, the courts established that a provider of such services would
be liable to defamatory content if it has editorial control over the content.
Thus, in Cubby v. CompuServe (1991) the courts found that no such
liability existed because CompuServe did not have any editorial control
over the bulletin board in question. In Stratton Oakmont v. Prodigy
(1995), a case in which a brokerage service was accused of mismanagement
on a bulletin board, the court found that Prodigy was liable, as it has
hired the moderator of the forum. However, in the Telecommunications Act
of 1996 Congress relieved the providers of interactive computer services
generally from such liability if the information was posted by third parties.
The U.S. Constitution does not explicitly guarantee a right to privacy. However, most experts agree that such a right follows from the Fifth Amendment. The U.S. Supreme Court first recognized a right to privacy in Griswold v. Connecticut (1965), a case involving the right of couples to buy contraceptives. Several year later, in Roe v. Wade (1973) the U.S. Supreme Court affirmed that “a right of privacy, or a guarantee of certain areas or zones of privacy does exist under the Constitution.” Violations of privacy are dealt with at the state level as part of tort law, which guides civil wrongs among persons. “Privacy” is most often defined as the right to be left alone or the right to be free from unwarranted publicity. Most state laws recognize four forms of privacy violations (see Smith, Meeske, Wright III, Electronic Media and Government, 1995 for more details):
In addition to information collected by websites, many services not
offer to “mine” public (and sometimes private) databases for information
on individuals. Social security numbers, financial reports, and FBI files
can all be bought on the Internet. Law enforcement agencies are concerned
about an increase in identity theft via electronic networks and related
crimes, such as the acquisition and abuse of credit cards using somebody
else’s name. Currently, no clear statutory provisions are in place to address
these issues. With a few exceptions such as health care, the U.S. approach
generally is that firms and the public sector may use individual data unless
users prohibit them from doing so (“opt-out” policy). In contrast, the
European Union is pursing an approach where individual’s information cannot
be used unless explicit consensus is given (“opt-in” policy).
Smith, F. Leslie, Meeske, Milan, & Wright, John W. II. Electronic media and government: the regulation of wireless and wired mass communication in the United States (White Plains, NY: Longman Publishers, 1995).
INTELLECTUAL PROPERTY RIGHTS AND THE INTERNET
“Intellectual Property Rights” (IPRs) is a summary term for patents, trademarks, and copyright. Congress is empowered by Article I, section 8 of the U.S. Constitution “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Patents grant a 20 year exclusive control over “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof (Patent Act of 1959) to the inventor. In return for this exclusive control, the inventor has to make his/her invention transparent in the patent application. About 10% of all patents in 1998 were software patents.
Copyright protects “original works of authorship fixed in a tangible medium of expression” (Copyright Act 1976). Protected works include literary works, musical works including lyrics, dramatic works, pantomimes and choreographic works, motion pictures, television programs and other audio-visual works, sound recordings, compilations (e.g. of poems), and architecture. Copyright gives the author exclusive rights to control:
IPRs are intended to stimulate creative works by allowing the author temporary exploitation of a work. In limited cases, copyrighted works can be used without explicit permission. Such “fair use” is typically given in non-profit educational settings and if only small portions of a copyrighted work are being used. It will also depend on the impact of a use on the commercial value of a copyrighted piece. For example, individuals can make tapes of TV programs for their own use.
Digital technology and the Internet pose many challenges to established copyright doctrine. For example, MP3, essentially a compression algorithm to reduce the amount of information required to store music, allows the easy dissemination of music on the Internet. Unlike audiocassette tapes, MP3 copies do not deteriorate in quality. My.MP3.com has begun offering two services that have created uproar among musicians and the recording industry. “Instant Listening Service” allows customers to buy CDs from MP3.com and provides instant access to a music database, which contains the title. The “Beam-It” service allows customers to insert their CDs in a computer and unlock database access on My.MP3.com. Files cannot be copied directly onto a hard drive but indirectly via an MP3 player. The service enhances portability of a music collection as music can be downloaded from any place with Internet access. However, the service also can be abused illegally to produce pirate copies of music. Several lawsuits are pending against My.MP3.com.
Congress has attempted to address some of the issues raised by the Internet in the Digital Millennium Copyright Act of 1998. This Act establishes penalties for measures that circumvent technical copyright protection systems (e.g., encryption codes), increases the protection of copyrighted material on the Internet, reduces the fair use exceptions, and releases ISPs from liability for copyright violations committed by users on their servers. ISPs are only relieved from such liability under certain conditions. For example, the must immediately undertake measures to remove infringing material once they were notified of a copyright violation on their systems. It has been criticized that ISPs have no obligation to check the truthfulness of a claim of copyright violation. The Act has improved the position of industry to defend its copyrights but is had likely weakened the rights of the pubic to get access to information under the fair use provisions. However, the struggle to redefine copyright protection for an age of digital information continues and important issues are still awaiting a solution.
CURRENT AND EMERGING ISSUES
Domain name management
Domain names are the unique addresses that identify a specific host on the Internet. Internet addresses (IP addresses) typically have the structure outlined in Figure 7.3, which needs to be read backwards. The last few digits of an IP address are the top-level domain name. There are currently 7 generic top-level domain names (.com, .org, .gov. .mil, .edu, .int, .net). In addition, there are 180+ top-level national domain names, such as .uk or .fr (the U.S. has the default national domain name and is thus not identified specifically). In addition to the top-level domain names, Internet addresses include generic category names such as .co (“company”) or .ac (“academic”) (only in the national domain names), organization names, as well as subdomain names.
Behind these domain names is a root directory, essentially a numerical representation of the alphanumeric domain name. For example, MSU’s pilot host has the numeric domain name of 22.214.171.124. This root directory is maintained by several organizations and is crucial for the smooth operation of the Internet. The domain name system was initially created by Jan Postel, on of the Internet pioneers. The US government entrusted it to Network Solutions. However, with the commercialization of the Internet there was increasing pressure to end the global monopoly of Network Solutions. In 1998, the Internet Corporation for Assigned Names and Numbers (ICANN) was founded as an international non-profit organization to develop policies in the areas of IP address space allocation, protocol parameter assignment, Domain Name System management, and root server system management.
ICANN is governed by a 19-member international Board of Directors one of which may be elected in the near future by its Membership At Large. The organization accredits domain name registries worldwide. Currently, more than 100 such registrars are accredited in addition to Network Solutions, including large companies like AOL or AT&T. ICANN is assisted by three supporting organizations. The Address Supporting Organization (ASO) is concerned with system of IP addresses. The Domain Name Supporting Organization (DNSO) deals with the Domain Name System (DNS). Its Names Council currently studies new global top-level domain names (e.g., .arts, .shop, .firm, .sex). Lastly, the Protocol Supporting Organization (PSO) deals with Internet protocol issues. ICANN has experienced legitimacy problems raised by the fast-growing global community of Internet users. It needs to be mentioned that ICANN is a fairly young organization and needs to mature and further develop procedures. Regardless of these weaknesses, it is a unique global experiment of self-regulation.
One of the most contested issues in the area of domain names is whether
existing trademark laws should protect such names. Trademarks protect corporate
names, logos, and the like. Once registered they last for 10 years but
can be extended indefinitely as long as the trademark is “defended” against
appropriation by others. With the rapid growth of e-commerce, corporations
have begun to look at web addresses as one aspect of a trademark. Thus,
certain domain names cannot be used by third parties or legally appropriated
by “cybersquatters.” The World Trade
Organization (WTO) and the World Intellectual
Property Organization (WIPO) have adopted policies to extend trademark
protection to cyberspace. ICANN has also adopted a Uniform Dispute Resolution
Procedure for trademark conflicts.
Sexually explicit content
During the deliberations of the Telecommunications Act of 1996, Time magazine published a cover story about the accessibility to minors of pornography on the Internet. Although the research on which the article was based had many flaws, the story drew attention to the issue. As a response, Congress passed the Communications Decency Act of 1996 (CDA) as part of the Telecommunications Act of 1996. The Act wanted to make the sending or posting of harassing, indecent, or obscene messages a felony. Civil rights organizations like the American Civil Liberties Union (ACLU) challenged the law in the courts on constitutional grounds. In 1997, in ACLU v. Reno, the U.S. Supreme Court struck down major provisions of the CDA as vague and overly broad and thus a violation of the First Amendment. (The U.S. Supreme Court left the provisions against obscene messages in place.)
Congress renewed its attempts to regulate potentially harmful content
on the Internet in the Children Online Protection Act of 1998 (COPA). This
Act attempted to be more specific and prescribe certain access control
methods (e.g., the requirement to ask for a credit card before access to
sexually explicit information is granted) to protect children. Civil liberties
groups once again challenged the legislation (ACLU v. Reno II) and
reached an injunction in February 1999. The further review of COPA is still
pending. In the meantime, software designers have brought products to the
market, such as P3P by Microsoft or CyberPatrol, that may offer parents
increased control options. Even these products are criticized by many in
the Internet community as a limitation of free speech. However, as the
First Amendment only prohibits the government from restricting free expression,
the legal grounds to act against such products are weak.
The rapid growth of E-commerce also raised many challenges for policies towards the Internet and information services. Thee range from legal question such as to what place serves as the point of sale in cases of complaints to measures assuring secure transactions on the Internet. Recently, the sale of prescription drugs on the Internet, the sale of alcohol to minors, and sales of weapons have sparked interest. Early April 2000 a commission proposed a moratorium on the introduction of sales taxes on Internet sales. There is also increasing concern about identity theft in cyberspace and other violations of privacy.
These issues are all pending and you may want to visit the websites
of the Electronic Frontier Foundation
(EFF), the American Civil Liberties Union
(ACLU) or other links provided in the “Resources” section of this module
to learn more about the ongoing policy debates.
Last modified August 26, 2002, 11:50 a.m.
Johannes M. Bauer