The Computer Inquiries
The Computer Inquiries
• A series of proceedings undertaken by the
FCC
• Goal to keep telephone companies
(specifically the Bell System) from
dominating the computer industry
Computer Inquiry I
• 1966 FCC issued a Notice of Inquiry
– Lengthy list of questions about the relationship between
computers and communications
• 1971 FCC Decision
– Communication; data processing; hybrid services
– “maximum separation” rule (separate subsidiaries)
• Telephone companies to provide data processing only through
subsidiaries with separate books, officers, etc.
• Didn’t apply to Bell System (remember this is before the MFJ)
because FCC felt that the 1956 Consent Decree took care of
keeping the Bell System out of any unregulated activity,
including data processing
Computer Inquiry II
• 1980 FCC Decision
– “basic” versus “enhanced” services
– Enhanced services and CPE should not be regulated as
common carrier services under the Communication Act
– Preempted the states on these issues
– Common carriers should be able to offer both enhanced
services and CPE, except the Bell System (AT&T and
the BOCs—it’s still before the MFJ) could do so only
through a separate subsidiary.
• American Bell, later AT&T Information Systems formed
CI, II (continued)
• “Basic” service—like “plain old telephone
service”
– A basic transmission service is one that is
limited to the common carrier offering of
transmission capacity for the movement of
information—this is regulated
More on CI, II
• “Enhanced” service (not regulated)—
employ computing to:
– Act on the format, content, code, protocol or
similar aspects of the subscriber’s transmitted
information
– Provide the subscriber additional, different, or
restructured information
– Involve subscriber interaction with stored
information
More on CI, II
• CPE to be detariffed January 1, 1983
– New CPE to be unbundled from basic services
and detariffed on 1/1/83
– Embedded CPE, including inventories, would
remain tariffed until either sold to customers or
written off the books over a specified time
period.
Computer Inquiry III
• 1985 FCC started CI,III; issued order in 1987-8
– Realized that the maximum separation requirement of
CI,II had hurt public access to enhanced services
– Began a new approach—competition and access
– Allowed end of separate subsidiaries for AT&T and the
now separate BOCs IF:
• Filed Open Network Architecture plans
• Development of Cost Accounting Manual (Replaced structural
separation with accounting separation)
Some complications
• The MFJ restricted the BOCs from offering
information services—restriction not lifted
till 1991
– Interesting case of the MFJ court and the FCC
disagreeing
• The Ninth Circuit court sent the CI,III back
to the FCC twice, saying the FCC had not
adequately explained why it was changing
its mind
More on CI,III
• FCC passed an Interim Order that let the
BOCs provide intraLATA information
services without a separate subsidiary,
pending further consideration
• Then came the 1996 Act
– FCC interprets the Act as requiring the BOCs to
prove their local networks are open to
competition before letting them into
interLATA information services
Why is CI,III important?
• It sets the stage for the principles of the
Telecom Act of 1996
• CI,III was concerned with competition in
information services; the Telecom Act is
concerned with competition in basic local
service
Five Competitive Safeguards
• CI,III required:
– Identification of basic service elements that are the
network’s building blocks (Basic Service Elements)
– Accounting rules to prevent cross-subsidization
– Open Network Architecture so the configuration of the
telco network can be known to other companies
– Comparably Efficient Interconnection (CEI) so can
attach to essential facilities as easily as the telco does
– Customer Proprietary Network Information (CPNI)
• A series of proceedings undertaken by the
FCC
• Goal to keep telephone companies
(specifically the Bell System) from
dominating the computer industry
Computer Inquiry I
• 1966 FCC issued a Notice of Inquiry
– Lengthy list of questions about the relationship between
computers and communications
• 1971 FCC Decision
– Communication; data processing; hybrid services
– “maximum separation” rule (separate subsidiaries)
• Telephone companies to provide data processing only through
subsidiaries with separate books, officers, etc.
• Didn’t apply to Bell System (remember this is before the MFJ)
because FCC felt that the 1956 Consent Decree took care of
keeping the Bell System out of any unregulated activity,
including data processing
Computer Inquiry II
• 1980 FCC Decision
– “basic” versus “enhanced” services
– Enhanced services and CPE should not be regulated as
common carrier services under the Communication Act
– Preempted the states on these issues
– Common carriers should be able to offer both enhanced
services and CPE, except the Bell System (AT&T and
the BOCs—it’s still before the MFJ) could do so only
through a separate subsidiary.
• American Bell, later AT&T Information Systems formed
CI, II (continued)
• “Basic” service—like “plain old telephone
service”
– A basic transmission service is one that is
limited to the common carrier offering of
transmission capacity for the movement of
information—this is regulated
More on CI, II
• “Enhanced” service (not regulated)—
employ computing to:
– Act on the format, content, code, protocol or
similar aspects of the subscriber’s transmitted
information
– Provide the subscriber additional, different, or
restructured information
– Involve subscriber interaction with stored
information
More on CI, II
• CPE to be detariffed January 1, 1983
– New CPE to be unbundled from basic services
and detariffed on 1/1/83
– Embedded CPE, including inventories, would
remain tariffed until either sold to customers or
written off the books over a specified time
period.
Computer Inquiry III
• 1985 FCC started CI,III; issued order in 1987-8
– Realized that the maximum separation requirement of
CI,II had hurt public access to enhanced services
– Began a new approach—competition and access
– Allowed end of separate subsidiaries for AT&T and the
now separate BOCs IF:
• Filed Open Network Architecture plans
• Development of Cost Accounting Manual (Replaced structural
separation with accounting separation)
Some complications
• The MFJ restricted the BOCs from offering
information services—restriction not lifted
till 1991
– Interesting case of the MFJ court and the FCC
disagreeing
• The Ninth Circuit court sent the CI,III back
to the FCC twice, saying the FCC had not
adequately explained why it was changing
its mind
More on CI,III
• FCC passed an Interim Order that let the
BOCs provide intraLATA information
services without a separate subsidiary,
pending further consideration
• Then came the 1996 Act
– FCC interprets the Act as requiring the BOCs to
prove their local networks are open to
competition before letting them into
interLATA information services
Why is CI,III important?
• It sets the stage for the principles of the
Telecom Act of 1996
• CI,III was concerned with competition in
information services; the Telecom Act is
concerned with competition in basic local
service
Five Competitive Safeguards
• CI,III required:
– Identification of basic service elements that are the
network’s building blocks (Basic Service Elements)
– Accounting rules to prevent cross-subsidization
– Open Network Architecture so the configuration of the
telco network can be known to other companies
– Comparably Efficient Interconnection (CEI) so can
attach to essential facilities as easily as the telco does
– Customer Proprietary Network Information (CPNI)