WEBVTT - What is a Common Carrier?

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<v Speaker 1>Get in touch with technology with tex Stuff from com

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<v Speaker 1>be there and welcome to tech Stuff. I'm Jonathan Strickland,

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<v Speaker 1>and today I'm doing a solo episode because it's about

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<v Speaker 1>some news that broke the day before I record this episode.

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<v Speaker 1>I'm recording on February fifth, two thousand, fifth Team. And

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<v Speaker 1>on February four, two fifteen, FCC Chairman Tom Wheeler made

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<v Speaker 1>a statement outlining the Federal Communication Commission's plan to f

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<v Speaker 1>CC for reclassifying Internet service providers as common carriers here

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<v Speaker 1>in the United States. But you might wonder what that

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<v Speaker 1>actually means and why people are making a big deal

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<v Speaker 1>out of it. So I thought I would explain what

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<v Speaker 1>common carriers are in general, how have they applied to

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<v Speaker 1>the Internet or don't apply up till now anyway, and

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<v Speaker 1>how this might change things in the future, and also

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<v Speaker 1>just to clear up some misconceptions about the whole thing.

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<v Speaker 1>So first, in the United States, the term common carrier

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<v Speaker 1>is a legal definition that means an individual, a company,

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<v Speaker 1>or a public utility like municipal buses, which is in

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<v Speaker 1>the regular business of transporting people and or freight. And

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<v Speaker 1>that's distinguished from a private carrier, which only transports occasionally

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<v Speaker 1>or as a one time only event, so it originally

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<v Speaker 1>referred to a physical conveyance of carrying people or cargo

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<v Speaker 1>from one place to another. In fact, in the United States,

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<v Speaker 1>this was first put into law in the Inner State

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<v Speaker 1>Commerce Act of eighteen seven, which regulated the railroads. Other

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<v Speaker 1>countries have had similar policies dating back hundreds of years.

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<v Speaker 1>Some of them are formally put down into law. Some

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<v Speaker 1>are just simple traditions that have held over over the

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<v Speaker 1>course of time. But over time, the definition here in

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<v Speaker 1>the United States has expended to cover services that carry

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<v Speaker 1>more than uh these physical things. They can verry intangible

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<v Speaker 1>things like voice communication. Now, one of the most important

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<v Speaker 1>facets of common carriers is that they are not allowed

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<v Speaker 1>to discriminate against passengers or cargo. They're legally bound to

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<v Speaker 1>carry all of them as long as there's enough capacity. UH.

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<v Speaker 1>They also have to have the fee to carry the

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<v Speaker 1>passenger or freight to be paid. I mean that that

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<v Speaker 1>has to happen too, so they don't do it for free.

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<v Speaker 1>UH and as long as there are no reasonable grounds

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<v Speaker 1>to deny entry. So in other words, let's have an example.

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<v Speaker 1>Let's say there's a city bus with plenty of seats available.

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<v Speaker 1>That bus would not be allowed under common carriage laws

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<v Speaker 1>to refuse service to a person who has bus fare

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<v Speaker 1>unless the bus driver had reasonable grounds to deny entry.

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<v Speaker 1>So let's say that the person who wants to get

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<v Speaker 1>on the bus is waving around a huge club and

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<v Speaker 1>singing Beach Boys songs at the top of his lungs.

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<v Speaker 1>They probably wouldn't think that guy is safe to let

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<v Speaker 1>onto your bus. You might be able to argue those

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<v Speaker 1>are reasonable grounds to deny entry. However, assuming that that

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<v Speaker 1>person waiting for the bus has shows no reason why

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<v Speaker 1>you would deny him or her entry, you have to

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<v Speaker 1>let that person on by the rules of common carriage.

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<v Speaker 1>Another important element is that common carriers are expected to

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<v Speaker 1>charge what is called a reasonable price, sometimes a just

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<v Speaker 1>and reasonable price for their services. So this really means

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<v Speaker 1>a common carrier can't charge one person more than another

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<v Speaker 1>person for no good reason. Now, there aren't good reasons

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<v Speaker 1>to charge different amounts in specific examples. So let's say

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<v Speaker 1>you are a free company, for example, and you're hired

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<v Speaker 1>to transport hazardous materials. That could justify a higher transportation

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<v Speaker 1>fee for that particular job because it comes with greater

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<v Speaker 1>risk than what it would normally be for you know,

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<v Speaker 1>regular cargo. So there are exceptions, but otherwise you couldn't

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<v Speaker 1>say I'm going to charge everyone in this town one

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<v Speaker 1>price to ride on my train, but everyone in southern

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<v Speaker 1>town has to pay this other price only because I

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<v Speaker 1>hate that town, so that town has everyone there has

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<v Speaker 1>to pay me more as I don't want them on

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<v Speaker 1>my train. Otherwise that would not be allowed, so let's

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<v Speaker 1>move ahead. In nineteen ten, that seven Act was modified

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<v Speaker 1>so that it also covered telegraph and the burgeoning telephone companies.

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<v Speaker 1>One of the issues customers faced in those early days

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<v Speaker 1>was a lack of assurance that their telegraph messages would

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<v Speaker 1>actually get through to their intended destinations. So some companies

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<v Speaker 1>were charging extra fees to ensure that the message would

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<v Speaker 1>be repeated all the way down to the end of

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<v Speaker 1>the line. Now, courts decided that that was an unfair practice.

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<v Speaker 1>That a customer has a reasonable expectation that a service

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<v Speaker 1>provider will actually provide the service that was paid for,

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<v Speaker 1>and should the customers shouldn't be charged extra just to

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<v Speaker 1>be certain of it. Moreover, it should be on service

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<v Speaker 1>providers to prove they are doing their job, rather than

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<v Speaker 1>the burden being on customers to prove that the providers

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<v Speaker 1>are falling short because the providers are privy to all

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<v Speaker 1>the information, so they should be the ones who had

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<v Speaker 1>the responsibility to prove that they're doing what they say

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<v Speaker 1>they're doing. And another issue was the fact that the

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<v Speaker 1>telephone system in the United States was effectively a monopoly.

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<v Speaker 1>Bell Telephone, which became a T and T in eight five,

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<v Speaker 1>got a headstart on other companies and laid on infrastructure

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<v Speaker 1>that only worked with the phones made by Western Electric.

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<v Speaker 1>So you had this partnership between Bell Telephone and Western Electric,

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<v Speaker 1>which effectively meant they were the only players in town.

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<v Speaker 1>If you were an independent uh telephone service company, your

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<v Speaker 1>phones would not work on the Bell Telephone infrastructure, so

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<v Speaker 1>that edged out competitors. And in nineteen thirteen Bell Telephone

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<v Speaker 1>in the US Justice Department worked out a deal to

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<v Speaker 1>limit Bell from scooping up independent competing companies and from

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<v Speaker 1>preventing other competitors from using Bell's long distance lines. They

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<v Speaker 1>were allowed to use Bells network. This was in response

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<v Speaker 1>to an antitrust lawsuit that was being brought against Bell Telephone,

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<v Speaker 1>and in order to head it off, Bell Telephone said,

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<v Speaker 1>you know what, We're going to change these policies we've

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<v Speaker 1>had so that you don't sue us, and it worked,

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<v Speaker 1>and the value of the service was considered to be

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<v Speaker 1>too important to allow unregulated control of it. So that's

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<v Speaker 1>where we started seeing some regulation enter into the telephone industry. Now,

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<v Speaker 1>there's a series of tech Stuff podcasts about the history

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<v Speaker 1>of A T and T in which Lauren Voege, Obama

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<v Speaker 1>and I explored how A T and T came about

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<v Speaker 1>and how it was split up more than once due

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<v Speaker 1>to concerns like these. So if you are interested in that,

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<v Speaker 1>you should go check out those episodes. Now, getting back

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<v Speaker 1>to the telephone industry as a whole, in Congress past

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<v Speaker 1>the Communications Act, which created the Federal Communications Commission, which

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<v Speaker 1>oversaw radio transmissions as well as telecommunications. So this is

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<v Speaker 1>what established the Title two that the FCC refers to

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<v Speaker 1>today when it comes to I s p s. They

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<v Speaker 1>talked about reclassifying I s p s under Title two.

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<v Speaker 1>This is the Act that classified telephone systems as common carriers.

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<v Speaker 1>It's been amended several times over the following decades, including

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<v Speaker 1>extensive alterations that were made during the Telecommunications Act of

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<v Speaker 1>nine six. So let's move on to transmitting computer data.

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<v Speaker 1>Over networks in nineteen seventies and nineteen eighties, before most

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<v Speaker 1>people knew about a network of networks. You know, our

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<v Speaker 1>bonnet was a thing. Internet was becoming a thing, but

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<v Speaker 1>most people didn't know about it. The common way to

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<v Speaker 1>connect to a computer was to use a modem for

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<v Speaker 1>direct machine to machine connection over the telephone system. So

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<v Speaker 1>you would have a dial up modem and you would

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<v Speaker 1>use it to dial a phone number. The computer on

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<v Speaker 1>the other end would essentially answer the phone, and then

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<v Speaker 1>you would have computer to computer communication. But it wasn't

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<v Speaker 1>an Internet, right, It wasn't a network of networks. It

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<v Speaker 1>was the machine to machine communication. Regular computer data was

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<v Speaker 1>considered a transmission service and fell under Title two, which

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<v Speaker 1>meant that any any transmission service cannot be prioritized, it

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<v Speaker 1>can't be discriminated against it, ow has to be treated equally.

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<v Speaker 1>But there were specific services companies provided in which you

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<v Speaker 1>could connect to a computer to get a get particular

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<v Speaker 1>information like a weather report or stock information or sports scores,

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<v Speaker 1>things like that. These were considered to be enhanced services,

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<v Speaker 1>so this was classified under Title one of the Communications Act,

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<v Speaker 1>which is unregulated. So the transmission was regulated, but these

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<v Speaker 1>specific services were unregulated. The enhanced services didn't fall under

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<v Speaker 1>common carriage terms. Companies could charge a fee for customers

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<v Speaker 1>to use them. That would be on top of any

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<v Speaker 1>phone bill for use of the transmission lines themselves. Okay,

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<v Speaker 1>so let's say a phone company offers up its own

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<v Speaker 1>enhanced service and some other company offers a competing enhanced service.

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<v Speaker 1>The transmission of data falls under common carriage, which means

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<v Speaker 1>that phone company could not prevent customers from accessing the

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<v Speaker 1>competitors enhanced service. That would be unfair. So this is

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<v Speaker 1>the beginning of the concept of net neutrality. The six

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<v Speaker 1>Telecommunications Act redefined enhanced services as information services and also

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<v Speaker 1>ratify the differences between transmission services information services, putting into

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<v Speaker 1>policy what the FCC had sort of made up as

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<v Speaker 1>it went along. So the transmission of services met the

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<v Speaker 1>terms of common carriage. The telephone company treated all dial

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<v Speaker 1>up services the same, all had equal access under the system.

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<v Speaker 1>The actual services, the apps that people were accessing, those

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<v Speaker 1>were enhanced or information services. That's not confusing enough. Let's

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<v Speaker 1>move into the early era of broadband. This is when

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<v Speaker 1>we start seeing dial up modems fade away and DSL

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<v Speaker 1>began to arrive. Now the FCC continued to apply that

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<v Speaker 1>distinctions made during the telephone era. The phone companies would

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<v Speaker 1>have to carry DSL signals as common carriage, they couldn't

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<v Speaker 1>discriminate against them. The apps are services running on the

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<v Speaker 1>DSL connections were unregulated information services. And then we get

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<v Speaker 1>to two thousand two. Now, this is when cable TV

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<v Speaker 1>companies began offering transmission services of Internet data at high speeds,

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<v Speaker 1>at least relative to dial up speeds at any rate.

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<v Speaker 1>And this is where things get muddy. See the FCC

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<v Speaker 1>classified cable broadband service under Title one, not titled two.

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<v Speaker 1>That means both the transmission of data over cable and

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<v Speaker 1>the information services provided would be unregulated. There will be

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<v Speaker 1>no reason for regulation there because it's all under Title one.

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<v Speaker 1>So why not treat cable transmission of data the same

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<v Speaker 1>way as the telephone system? Largely comes down to politics.

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<v Speaker 1>At this time, Republicans had a majority in government and

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<v Speaker 1>they favored deregulation. And the reasons for favoring deregulation was

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<v Speaker 1>that they thought it was going to promote risk taking

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<v Speaker 1>and competition and innovation. The in reality that's not necessarily

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<v Speaker 1>the case. I mean, if you look at the bell

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<v Speaker 1>telephone system story that kind of shows what happens with deregulation,

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<v Speaker 1>and it required the government to actually come in and

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<v Speaker 1>intervene in order to avoid a monopoly that could completely

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<v Speaker 1>take advantage of customers. On two thousand five, the FCC

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<v Speaker 1>said that DSL would also be reclassified under Title one.

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<v Speaker 1>So this makes the the whole situation even more complicated.

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<v Speaker 1>Telephone systems are still titled too, but DSL and cable

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<v Speaker 1>are now Title one and are unregulated. Now this meant

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<v Speaker 1>that cable and DSL companies wouldn't have to ask permission

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<v Speaker 1>to incorporate fast lanes for the Internet, so they could

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<v Speaker 1>give preferential treatment to some customers over others for a fee.

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<v Speaker 1>And because Title one is unregulated, there also no fear

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<v Speaker 1>of the FCC butting in should a cable or DSL

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<v Speaker 1>company block data they didn't want to carry, such as

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<v Speaker 1>data from a competitor or from torrent sites. So, you know,

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<v Speaker 1>we talked earlier about the common carriers. You know, one

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<v Speaker 1>of the defining factors is that they cannot refuse service

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<v Speaker 1>as long as a person is able to pay the fee.

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<v Speaker 1>If it's a Title one, it's not a common carrier,

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<v Speaker 1>and so it can deny service. So if you own

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<v Speaker 1>the transmission lines and you have a content provider like YouTube,

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<v Speaker 1>and you think I've got my own content provider program

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<v Speaker 1>where people users can upload video, and I don't want

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<v Speaker 1>to I don't want to compete against YouTube because YouTube

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<v Speaker 1>is gonna is gonna make my tool obsolete. I'm just

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<v Speaker 1>not gonna allow YouTube to go across my transmission lines. Technically,

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<v Speaker 1>you could do that under Title one, because there's no

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<v Speaker 1>you're not a common carrier. You're not You're not obligated

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<v Speaker 1>to carry all legal information. Beyond that, there was no

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<v Speaker 1>requirement for cable companies to provide services for a quote

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<v Speaker 1>just and reasonable fee end quote. They could charge whatever

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<v Speaker 1>they wanted. So in two thousand and eight things came

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<v Speaker 1>to a head. The FCC find Comcast because Comcast had

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<v Speaker 1>blocked peer to peer traffic through bit torrent. Now, first

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<v Speaker 1>we have to keep in mind there's nothing inherently illegal

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<v Speaker 1>or immoral or unethical about bit torrent. There's nothing wrong

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<v Speaker 1>with the technology. It's a method of data transmission that

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<v Speaker 1>works well for large files. Peer to peer is great

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<v Speaker 1>if you're trying to move a huge amount of information

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<v Speaker 1>in a relatively short amount of time. Now, some of

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<v Speaker 1>those files were pired in material, they were illegal files,

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<v Speaker 1>and there were plenty of huge files that were legal.

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<v Speaker 1>They should have been able to transmit freely. But because

0:13:50.240 --> 0:13:54.000
<v Speaker 1>bit torrent was being seen as the pirate tool, Comcast

0:13:54.080 --> 0:13:57.520
<v Speaker 1>blocked it. So the FCC gets involved and the FEC

0:13:57.640 --> 0:13:59.880
<v Speaker 1>says to Comcast, hey, you can't do that. You can't

0:13:59.880 --> 0:14:03.120
<v Speaker 1>just block this stuff just because you don't like some

0:14:03.240 --> 0:14:06.240
<v Speaker 1>of the activity that's going on over there, and Comcast

0:14:06.280 --> 0:14:09.520
<v Speaker 1>responds with, sure we can. We're not common carriers were

0:14:09.559 --> 0:14:13.040
<v Speaker 1>classified under Title one, not Title two, And the FCC

0:14:13.240 --> 0:14:17.320
<v Speaker 1>says uh, and it goes to court and the courts

0:14:17.400 --> 0:14:21.760
<v Speaker 1>end up agreeing ultimately with Comcast. The FCC doesn't have

0:14:21.760 --> 0:14:25.320
<v Speaker 1>the authority to regulate cable companies because they're classified as

0:14:25.360 --> 0:14:29.480
<v Speaker 1>Title one not Titled two. So that's why there's now

0:14:29.560 --> 0:14:32.200
<v Speaker 1>this move to reclassify I s p s under Title

0:14:32.240 --> 0:14:35.760
<v Speaker 1>two instead of Title one. So the argument for reclassification

0:14:35.840 --> 0:14:37.760
<v Speaker 1>is that it will require I s p s to

0:14:37.760 --> 0:14:41.440
<v Speaker 1>play fairly with content providers and with customers. The companies

0:14:41.480 --> 0:14:43.600
<v Speaker 1>will have to adhere to the rules of Title two

0:14:43.920 --> 0:14:45.960
<v Speaker 1>and will come under the regulation of the f c C.

0:14:46.440 --> 0:14:49.720
<v Speaker 1>So a company like Comcast, which isn't just a transmission

0:14:49.760 --> 0:14:53.360
<v Speaker 1>service provider but is also a content provider, can't favor

0:14:53.400 --> 0:14:57.880
<v Speaker 1>its own services at the expense of others. However, even

0:14:57.960 --> 0:15:01.600
<v Speaker 1>in this proposal, FCC chair Men Wheeler has suggested that

0:15:01.680 --> 0:15:05.320
<v Speaker 1>the FCC would forbear or waive certain elements of Title

0:15:05.400 --> 0:15:09.800
<v Speaker 1>too not directly associated with net neutrality, which includes the

0:15:09.840 --> 0:15:13.920
<v Speaker 1>requirement to share networks and on rate regulations. So while

0:15:13.960 --> 0:15:16.880
<v Speaker 1>cable companies wouldn't be able to block legal content or

0:15:16.960 --> 0:15:20.400
<v Speaker 1>prioritize traffic for sites for a price, they could totally

0:15:20.440 --> 0:15:24.120
<v Speaker 1>continue to charge customers whatever they like for their services.

0:15:24.160 --> 0:15:27.200
<v Speaker 1>So some people object to reclassifying I s p s

0:15:27.240 --> 0:15:31.760
<v Speaker 1>as titled too like the cable companies, They really object

0:15:31.800 --> 0:15:35.680
<v Speaker 1>to it now. They say that if the cable companies

0:15:35.720 --> 0:15:38.240
<v Speaker 1>are re or I s p s or reclassified as

0:15:38.240 --> 0:15:42.520
<v Speaker 1>titled to the Internet will become heavily regulated uh and

0:15:42.880 --> 0:15:45.960
<v Speaker 1>innovation will be stifled. But the flip side of this

0:15:46.120 --> 0:15:48.720
<v Speaker 1>is that it will be a fair playing ground. So

0:15:48.800 --> 0:15:52.840
<v Speaker 1>if we had access to lots of competitors in the

0:15:52.880 --> 0:15:56.440
<v Speaker 1>I s P space for service, I wouldn't be really

0:15:56.440 --> 0:16:01.600
<v Speaker 1>concerned about deregulation because we could always switch providers if

0:16:01.640 --> 0:16:03.480
<v Speaker 1>we didn't like the service, if we felt they were

0:16:03.480 --> 0:16:06.520
<v Speaker 1>being unfair, we could look to a competitor, and in fact,

0:16:06.920 --> 0:16:10.480
<v Speaker 1>that competition could drive everyone to being as fair as

0:16:10.520 --> 0:16:14.360
<v Speaker 1>possible so that they didn't run off their customers. But

0:16:15.280 --> 0:16:18.360
<v Speaker 1>the truth of the matter is that many people, including myself,

0:16:18.440 --> 0:16:21.040
<v Speaker 1>have very limited choices when it comes to I s

0:16:21.080 --> 0:16:23.440
<v Speaker 1>p s. In some cases, there's no choice at all.

0:16:23.560 --> 0:16:26.560
<v Speaker 1>You have one option. You either go with this company

0:16:26.680 --> 0:16:29.200
<v Speaker 1>or you don't have internet. And that's a problem with

0:16:29.280 --> 0:16:32.760
<v Speaker 1>dealing with an effective monopoly. The consumer loses out. And

0:16:32.800 --> 0:16:35.320
<v Speaker 1>the keyble industry claims that this regulation is going to

0:16:35.360 --> 0:16:40.600
<v Speaker 1>discourage those companies from investing in infrastructure because it will

0:16:40.720 --> 0:16:43.480
<v Speaker 1>hurt revenue to have regulation. They said that if the

0:16:43.520 --> 0:16:46.360
<v Speaker 1>government determines how much money we're able to make, then

0:16:46.400 --> 0:16:49.760
<v Speaker 1>there's no reason for us to try and innovate and

0:16:49.880 --> 0:16:54.160
<v Speaker 1>build out our infrastructures. On the other hand, it encourages

0:16:54.240 --> 0:16:57.480
<v Speaker 1>new players in the space like Google. Fiber, which is

0:16:57.520 --> 0:17:01.160
<v Speaker 1>investing huge amounts to bring broadbands leads two households in

0:17:01.200 --> 0:17:04.760
<v Speaker 1>certain markets, So if the cable companies wish to keep

0:17:04.840 --> 0:17:08.440
<v Speaker 1>their customers, they'll have to compete with the newcomers, which

0:17:08.440 --> 0:17:12.239
<v Speaker 1>means that it does encourage investment in infrastructure, it just

0:17:12.359 --> 0:17:16.280
<v Speaker 1>means lower profits. That's really what these big companies are

0:17:16.280 --> 0:17:21.600
<v Speaker 1>afraid of. So they either continue to compete by building

0:17:21.600 --> 0:17:25.200
<v Speaker 1>out this infrastructure, or they get out of the game entirely,

0:17:25.680 --> 0:17:28.600
<v Speaker 1>which I don't think is a likely outcome. Now. As

0:17:28.600 --> 0:17:32.040
<v Speaker 1>for excessive regulation, I don't anticipate that being a huge problem.

0:17:32.040 --> 0:17:34.800
<v Speaker 1>I think we're more likely to see the FCC watching

0:17:34.840 --> 0:17:37.600
<v Speaker 1>to make sure cable companies follow the rules under Title two,

0:17:38.080 --> 0:17:42.440
<v Speaker 1>should that reclassification actually happen, which isn't a sure thing yet.

0:17:42.720 --> 0:17:44.800
<v Speaker 1>I mean, we're gonna see a lot of resistance from

0:17:44.800 --> 0:17:47.480
<v Speaker 1>those I s p S. But I'm curious to hear

0:17:47.520 --> 0:17:50.960
<v Speaker 1>what you guys think of this issue. Do you agree

0:17:51.080 --> 0:17:52.679
<v Speaker 1>with this? Do you think that this is going to

0:17:52.760 --> 0:17:56.439
<v Speaker 1>lead to true net neutrality? Are you upset that the

0:17:56.520 --> 0:18:00.240
<v Speaker 1>FCC is willing to forbear certain elements of Title too

0:18:00.320 --> 0:18:02.600
<v Speaker 1>in order to play Kate I s p S. Do

0:18:02.640 --> 0:18:04.360
<v Speaker 1>you think the whole thing should apply? Do you think

0:18:04.359 --> 0:18:06.680
<v Speaker 1>the whole thing is outdated because it was originally meant

0:18:06.720 --> 0:18:10.120
<v Speaker 1>for railroads and now we're applying it to the Internet.

0:18:10.600 --> 0:18:13.240
<v Speaker 1>I want to know what you think I personally am

0:18:13.280 --> 0:18:17.800
<v Speaker 1>really looking forward to seeing that neutrality become a codified

0:18:18.000 --> 0:18:22.159
<v Speaker 1>thing in US law. I think it's well overdue, but

0:18:22.200 --> 0:18:24.480
<v Speaker 1>I want to know what you think as well. Write

0:18:24.480 --> 0:18:27.240
<v Speaker 1>me My address is tech stuff at how stuff works

0:18:27.240 --> 0:18:29.880
<v Speaker 1>dot com, or drop me a line on Twitter, Facebook

0:18:29.920 --> 0:18:31.800
<v Speaker 1>or Tumbler. The handle it all three is text le

0:18:32.040 --> 0:18:38.199
<v Speaker 1>hs W and I'll talk to you again. Really for

0:18:38.280 --> 0:18:40.600
<v Speaker 1>more on this and bathands of other topics. Because it

0:18:40.720 --> 0:18:51.560
<v Speaker 1>has to works dot com