While Pool highlighted the importance of legal precedents to provide stability, he cautioned against applying old telecommunications regulations to emerging digital services, arguing that such rigidity could hinder innovation, infringe on freedom of expression, and prevent society from fully benefiting from technological advancements. Regulations must be flexible enough to adapt to new technologies. His work influenced later debates on technological neutrality and regulatory flexibility, especially as the Internet and digital communications became more central to society.

This post will examine the legal precedents and perturbations for Internet broadband policy going back to railroad law, telegraph law, and the Communications Acts of 1934. The FCC’s Computer Inquiries and the Telecommunications Act of 1996 are particularly relevant, although the distinction between Title I and Title II is paramount in broadband policy.

The legal precedents for Internet policy are deeply rooted in transportation and communications regulations in the US, which began with railroad law, expanded to telegraph law, and were later codified in major pieces of legislation such as the Communications Act of 1934 and the Telecommunications Act of 1996. These laws established principles that would later be applied to the Internet and digital communication networks.

Railroad Law and Common Carriers

Railroad law in the 19th century provided an early legal foundation for regulating services that were considered essential public utilities. Railroads, which were the first major national infrastructure, were regulated under Interstate Commerce Act of 1887. This law created the Interstate Commerce Commission (ICC) and established key principles such as reasonable tariffs that would influence later communications regulation.

Railroads and the trains that ran on them were to be treated as “common carriers,” meaning they had to offer services to all customers without discrimination, and rates had to be “just and reasonable.” Railroads had to stop at all major towns in the Midwest and pick up commodities from the farmers bringing cows, pigs, timber, wheat, etc. to the major markets.

The laws determinend that government had the right to regulate industries deemed essential to the public interest, ensuring accessibility and fairness. These principles of nondiscrimination, accessibility, and regulation in the public interest would later be applied to communications networks, including the telegraph, telephone, and eventually the Internet.

Telegraph Law

The Telegraph Act of 1860 and subsequent regulations were important precursors to modern communications law. Telegraph companies were also treated as “common carriers” under this legal framework. The Pacific Telegraph Act of 1860 was designed to promote the construction of a telegraph line across the US, establishing early rules for how telecommunications infrastructure would be managed. Like railroads, telegraph companies had to provide equal access to their networks for all customers.

The telegraph was seen as a national necessity, further embedding the idea that communication networks are critical public infrastructure requiring federal regulation.

The Communications Act of 1934

The Communications Act of 1934 was a landmark law that created the Federal Communications Commission (FCC) and consolidated the regulation of all electronic communications, including telephone, telegraph, and radio. The Act aimed to establish a comprehensive framework for regulating interstate and foreign communication.

The FCC was tasked with ensuring that communications networks served the public interest, convenience, and necessity. Key provisions included common carrier regulation and public interest standard. Telephone companies were to be regulated as common carriers, requiring them to provide service to everyone on nondiscriminatory terms, with rates subject to regulation by the FCC. The Act also introduced the idea that communications services, particularly telephony, should be universally accessible to all Americans, which laid the groundwork for later universal broadband goals.

This Act established a regulatory foundation that persisted for much of the 20th century, governing how telecommunications were managed and ensuring public access to these services. This included addressing the introduction of computer services into the telecommunications networks.

The Communications Act of 1934 created a regulatory framework for U.S. telecommunications and introduced the concepts that later became known as Title II and Title I services. These specifications would shape the structure of the Internet Services Provider (ISP) industry.

Title II: Common Carrier Services

Title II of the Communications Act defined and regulated “common carrier” services, treating telecommunications services (like traditional telephone service) as essential public utilities. Common carriers are required to provide service to all customers in a non-discriminatory way, under just and reasonable rates and conditions.

Title II imposed significant regulatory obligations on these services to ensure fair access, affordability, and reliability. It allowed the Federal Communications Commission (FCC) to enforce rate regulations, mandate service quality standards, and prevent discriminatory practices. Common carriers under Title II were required to operate as public utilities, adhering to principles similar to those governing railroads and utilities. The FCC was given authority to ensure these services operated in the public interest.

Title I: “Ancillary” Authority

A crucial provision the Communications Act provides the FCC is “ancillary authority” over all communication by wire or radio that does not fall under specific regulatory categories like Title II or Title III (broadcasting). This means Title I covers services that are not classified as common carriers, allowing the FCC some jurisdiction but without the strict regulatory requirements of Title II.

Title I services are not subject to common carrier regulations. Instead, the FCC’s regulatory power over these services is limited to actions necessary to fulfill its broader regulatory goals. Title I gives the FCC flexibility to regulate communication services that may not fit into the traditional telecommunications (Title II) or broadcasting (Title III) categories. The FCC uses its Title I authority to support its mission, although its powers are limited, making it harder to impose the same level of regulatory oversight on Title I services.

This distinction between Title I and Title II services has significant implications, as services under Title I remain less regulated, which has encouraged innovation and rapid growth in Internet services but has also limited the FCC’s authority to impose rules (such as net neutrality). Title II, by contrast, gives the FCC stronger regulatory powers, which is why network policy debates often focus on reclassifying broadband as a Title II service to enforce stricter oversight. The term “online” was invented by the computer processing industry to avoid the FCC regulations that might incur with use of “data communications.”

Computer Inquiry Proceedings (1970s–1980s)

In the 1960s, the FCC began examining how to regulate computer-related services in its Computer Inquiries, which laid the foundation for differentiating traditional telecommunications services from emerging computer-based services.

Computer Inquiry I aimed to establish a regulatory distinction between “pure” data processing services (considered competitive and not subject to FCC regulation) and regulated communication services. The FCC considered separating computer functions from traditional telephone network operations, allowing for the development of the data processing industry without heavy regulatory burdens while still overseeing communication services provided by carriers like AT&T. It marked the first attempt by the FCC to grapple with the emerging intersection of computers and telecommunications by defining which aspects would fall under their regulatory jurisdiction.

In Computer II (1980), the FCC created a significant legal distinction between “basic” telecommunications services (transmitting data without change in form) and “enhanced” computer services (services that involve processing, storage, and retrieval, such as email or database services). Basic services remained subject to common carrier regulations, while enhanced services were left largely unregulated.

The FCC refined these distinctions further in Computer III (1986) and established that “enhanced” or “information” services would not be regulated like traditional telecommunications. This deregulation fostered the growth of the computer services industry and allowed for innovation without strict regulatory oversight. When the Internet started to take off, this distinction allowed PC users to connect to an ISP over their phone lines with a modem for long periods of time without paying line charges.

The Telecommunications Act of 1996

The Clinton-Gore administration attempted the first major overhaul of communications law since 1934. The Telecommunications Act of 1996 was designed to address the emergence of new digital technologies and services, including the Internet. It sought to promote competition and reduce regulatory barriers, with the assumption that market competition would benefit consumers by reducing prices and increasing innovation.

The Telecom Act encouraged competition in local telephone service, long-distance service, and cable television, which had previously been dominated by monopolies. The aim was to foster competition among service providers. It also updated the universal service mandate to include access to advanced telecommunications services, which would later include broadband Internet access.

The 1996 Telecom Act distinguished between “information services” and “telecommunications services,” in line with the Communications Act of 1934’s distinction between Title I and Title II, but left the Internet’s regulatory status ambiguous.

A crucial provision in the 1996 Telecom Act is Section 230, which grants immunity to Internet publishing platforms from liability for content posted by its users. This protection has allowed platforms like social media sites Facebook and X to flourish, but it has also raised debates over platform responsibility for harmful content.

The Internet world was shocked in 2002 when the FCC under Chairman Michael Powell ruled cable modem service was an information service, and not a telecommunications service. Cable companies such as Comcast became lightly regulated broadband providers and were exempted from the common-carrier regulation and network access requirements imposed on the ILECs.

Then, in 2005, incumbent local exchange carriers (ILECs) like AT&T, BellSouth, Hawaiian Telecom, Quest, and Verizon were bestowed Title I deregulated status. They were quickly able to take advantage of their new status to take over large market shares of the ISP business. After the FCC’s 2005 decision, content providers and IAPs began negotiating over paid prioritization and fast lanes. The FCC attempted to implement net neutrality principles under Title I, but these principles were apparently unable to protect web users from IAPs that throttled traffic.

Internet Policy and the Net Neutrality Debates

Over time, as the Internet grew globally in importance, regulatory debates focused on how it should be governed, particularly regarding principles of common carriage and net neutrality. Net neutrality is the stance that ISPs should treat all data on their networks equally, without favoring or discriminating against certain content or services.

In 2015, the FCC under the Democrats passed regulations that classified broadband Internet as a Title II telecommunications service, subjecting it to common carrier obligations. This meant ISPs were required to adhere to net neutrality rules, treating all traffic equally. President Obama personally advocated for the change.

However, the Republican FCC repealed these rules in 2017, classifying broadband as an information service rather than a telecommunications service, thus removing common carrier obligations and weakening net neutrality protections. Chairman Pai compared regulating ISPs with regulating websites, a clear deviation from the regulatory layers set out in the Computer Inquiries. He stressed that net neutrality would restrict innovation.

In 2024, the FCC under the Democrats, returned broadband services to Title II, bringing back Net Neutrality.

Conclusion

The historical frameworks from railroad, telegraph, and early telephone regulation have carried through into the digital era. The legal precedents established the key principles of common carrier, public interest regulation, universal access, competition and deregulation. The idea that certain services, including telecommunications and potentially the Internet, should serve all users equally and fairly was codified in common carrier law. Legal precedent also solidified that communications networks must serve the broader public interest, ensuring access to all, protecting consumers, and encouraging innovation.

The legal frameworks governing communications, from the regulation of railroads and telegraphs to the Communications Acts of 1934 and 1996, have laid the foundation for modern Internet broadband policy. The principles of common carrier status, public interest, universal service, and regulated competition have influenced the ongoing debates over how to govern the Internet and ensure equitable access in the digital age. These legal precedents continue to shape policies around net neutrality, ISP regulation, and the expansion of broadband access.

In Technologies of Freedom, Pool highlighted that while legal precedents can provide stability, they must be flexible enough to adapt to new technologies. He cautioned against applying old telecommunications regulations to emerging digital services, arguing that such rigidity could hinder innovation, infringe on freedom of expression, and prevent society from fully benefiting from technological advancements. His work influenced later debates on technological neutrality and regulatory flexibility, especially as the Internet and digital communications became more central to society.

Citation APA (7th Edition)

Pennings, A.J. (2024, Nov 3) Legal Precedents and Perturbations Shaping US Broadband Policy. apennings.com https://apennings.com/telecom-policy/legal-precedents-shaping-us-broadband-policy/

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Notes

[1] Pool, I. (1984) Technologies of Freedom. Harvard University Press. Written at the University of Hawaii Law Library in the early 1980s.
[2] List of Prevous Posts in this Series
Pennings, A.J. (2022, Jun 22). US Internet Policy, Part 6: Broadband Infrastructure and the Digital Divide. apennings.com https://apennings.com/telecom-policy/u-s-internet-policy-part-6-broadband-infrastructure-and-the-digital-divide/

Pennings, A.J. (2021, May 16). US Internet Policy, Part 5: Trump, Title I, and the End of Net Neutraliy. apennings.com https://apennings.com/telecom-policy/us-internet-policy-part-5-trump-title-i-and-the-end-of-net-neutrality/

Pennings, A.J. (2021, Mar 26). Internet Policy, Part 4: Obama and the Return of Net Neutrality, Temporarily. apennings.com https://apennings.com/telecom-policy/internet-policy-part-4-obama-and-the-return-of-net-neutrality/

Pennings, A.J. (2021, Feb 5). US Internet Policy, Part 3: The FCC and Consolidation of Broadband. apennings.com https://apennings.com/telecom-policy/us-internet-policy-part-3-the-fcc-and-consolidation-of-broadband/

Pennings, A.J. (2020, Mar 24). US Internet Policy, Part 2: The Shift to Broadband. apennings.com https://apennings.com/telecom-policy/us-internet-policy-part-2-the-shift-to-broadband/

Pennings, A.J. (2020, Mar 15). US Internet Policy, Part 1: The Rise of ISPs. apennings.com https://apennings.com/telecom-policy/us-internet-policy-part-1-the-rise-of-isps/

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© ALL RIGHTS RESERVED (Not considered legal advice)

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Anthony J. Pennings, PhD is a Professor at the Department of Technology and Society, State University of New York, Korea and Research Professor at Stony Brook University. He teaches broadband policy and ICT for sustainable development. Previously, he taught at New York University, primarily digital economics and media management. He also taught in the Digital Media MBA at St. Edwards University in Austin, Texas, where he lives when not in South Korea.

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Category: artificial intelligence, democratic political economies, enabling frameworks, global communications, how IT came to rule the world, smart new deal, telecom policy and net neutrality
Tags: Communications Act of 1934 > Computer II > Computer Inquiries > Computer One > Telecommunications Act of 1996

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