Breaking the Ice: Rethinking Telecommunications Law for the Digital Age

Telecommunications is a trillion-dollar industry undergoing a massive transformation, both in its technological underpinnings and its market dynamics. As technology and market developments undermine longstanding business models and value chains, existing legal frameworks are failing. A ‘‘layered’’ model for communications policy would provide a better foundation for competition, investment, and innovation than the legacy ‘‘silo’’ model. Just as water exists in three forms solid ice, liquid water, and gaseous steam digital networks manifest themselves in functional layers of physical connectivity, applications, and content, which interact with one another through technical interfaces. The unstable conversion points between forms of water are called phase transitions. The phase transitions in digital communications networks are the logical layer, which connects users and resources to networks, and the interface layer, which connects users and information to devices. Legislators and regulators traditionally ignore these ‘‘connective layers.’’ Yet as the layered model reveals, they are central to the emerging policy challenges of a converged world. Phone numbers, Internet protocol routing techniques, and digital rights management technologies are examples of logical and interface-layer features that are determining the complexion of converged digital networks, and the business opportunities that depend on them. A layered approach would use connective layer tools to reconceptualize traditional elements of communications policy. This would eliminate uncertainties about the legal status of voice over IP, mitigate concerns about a subsidy shortfall for rural phone customers, and lay the groundwork to address emerging competitive, governance, privacy, and other issues around digital identity. Moreover, by pinpointing these hid* Assistant Professor of Legal Studies, The Wharton School, University of Pennsylvania. Email: [email protected]. 60 J.ON TELECOMM. & HIGH TECH. L. [Vol. 4 den chokepoints, a layered approach would reduce the overall level of regulation. Adopting the layered model would ensure that emerging technologies can flourish while creating a transition path from the communications world of the past to the converged digital universe of the future. INTRODUCTION..................................................................................... 60 I. TELECOM IN THE AGE OF CONVERGENCE............................. 61 II. THE LAYERED APPROACH........................................................ 65 A. Introduction to Layers .......................................................... 66 B. Layers and Communications Policy ..................................... 68 C. A Double-Necked Hourglass ............................................... 71 D. The End of the Ice Age......................................................... 73 III. THE CONNECTIVE LAYERS....................................................... 80 A. Making the Connective Layers Primary............................... 80 B. Historical Cases .................................................................... 82 1. Network-attached equipment (Part 68).......................... 82 2. The Computer Inquiries ................................................. 84 3. Numbering and Addressing............................................ 86 IV. HOW TO BREAK THE ICE .......................................................... 89 A. The Interface Layer .............................................................. 90 B. The Logical Layer ................................................................ 91 C. By the Numbers.................................................................... 93 CONCLUSION......................................................................................... 95