2. Internet Access Services

73. We find that Internet access services are appropriately classed as information, rather than telecommunications, services. Internet access providers do not offer a pure transmission path; they combine computer processing, information provision, and other computer-mediated offerings with data transport. Senators Stevens and Burns suggest that services provided by Internet access providers should be deemed to fall on the telecommunications side of the line. When an Internet service provider transmits an email message, they maintain, it transmits “information of the user’s choosing, without change in the form or content of the information as sent or received.” Changes such as the addition of message headers, they argue, are inconsequential: “If the information chosen by the user has the same form (e.g., typewritten English) and content (e.g., directions to Washington, D.C.) as sent and received, then a ‘telecommunication’ has occurred.” SenatorMcCain, by contrast, urges that electronic mail, voice mail and Internet access are information services, because they furnish the capabilities to store, retrieve, or generate information.

74. In determining whether Internet access providers should be classed as providing information services rather than telecommunications services, the text of the 1996 Act requires us to determine whether Internet access providers merely offer transmission “between or among points selected by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received,” or whether they go beyond the provision of a transparent transmission path to offer end users the “capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information.” For the reasons that follow, we conclude that the latter more accurately describes Internet access service.

75. We note that the functions and services associated with Internet access were classed as “information services” under the MFJ. Under that decree, the provision of gateways (involving address translation, protocol conversion, billing management, and the provision of introductory information content) to information services fell squarely within the “information services” definition. Electronic mail, like other store-and-forward services, including voice mail, was similarly classed as an information service. Moreover, the Commission has consistently classed such services as “enhanced services” under Computer II. In this Report, we address the classification of Internet access service de novo, looking to the text of the 1996 Act. Various commenters have approached this question by inquiring whether specific applications, such as e-mail, vailable to users with Internet access, constitute “telecommunications.” As we explain below, we believe that Internet access providers do not offer subscribers separate services — electronic mail, Web browsing, and others — that should be deemed to have separate legal status. It is useful to examine specific Internet applications, however, in order to understand the nature of the functionality that an Internet access provider offers. 

76. Internet access providers typically provide their subscribers with the ability to run a variety of applications, including World Wide Web browsers, FTP clients, newsreaders, electronic mail clients, Telnet applications, and others. When subscribers store files on Internet service provider computers to establish “home pages” on the World Wide Web, they are, without question, utilizing the provider’s “capability for . . . storing . . . or making available information” to others. The service cannot accurately be characterized from this perspective as “transmission, between or among points specified by the user”; the proprietor of a Web page does not specify the points to which its files will be transmitted, because it does not know who will seek to download its files. Nor is it “without change in the form or content,” since the appearance of the files on a recipient’s screen depends in part on the software that the recipient chooses to employ. When subscribers utilize their Internet service provider’s facilities to retrieve files from the World Wide Web, they are similarly interacting with stored data, typically maintained on the facilities of either their own Internet service provider (via a Web page “cache”) or on those of another. Subscribers can retrieve files from the World Wide Web, and browse their contents, because their service provider offers the “capability for . . . acquiring, . . . retrieving [and] utilizing . . . information.” Most of the data transport on the Internet relates to the World Wide Web and file transfer.

77. The same is true when Internet service providers offer their subscribers access to Usenet newsgroup articles. An Internet service provider receives and stores these articles (in 1996, about 1.2 gigabytes of new material each day) on its own computer facilities. Each Internet service provider must choose whether to carry a full newsgroup feed, or only a smaller subset of available newsgroups. Each Internet service provider must decide how long it will store articles in each newsgroup, and at what point it will delete them as outdated. A user can then select among the available articles, choosing those that the user will view or read; having read an article, the user may store or forward it; and the user can post articles of his or her own, which will in turn be stored on the facilities of his own Internet service provider and those of every other Internet service provider choosing to Usenet carry that portion of the newsgroup feed. In providing this service, the Internet service provider offers “a capability for generating, acquiring, storing, . . . retrieving . . . and making available information through telecommunications.” Its function seems indistinguishable from that of the database proprietor offering subscribers access to information it maintains on-site; such a proprietor offers the paradigmatic example of an information service.

78. As noted above, Senators Stevens and Burns state that electronic mail constitutes a telecommunications service. They note that the provision of a transmission path for the delivery of faxes constitutes telecommunications, and characterize electronic mail as “nothing more or less than a paperless fax.” We have carefully considered this argument, but further analysis leads us to a different result. Like the World Wide Web and Usenet services described above, electronic mail utilizes data storage as a key feature of the service offering. The fact that an electronic mail message is stored on an Internet service provider’s computers in digital form offers the subscriber extensive capabilities for manipulation of the underlying data. The process begins when a sender uses a software interface to generate an electronic mail message (potentially including files in text, graphics, video or audio formats). The sender’s Internet service provider does not send that message directly to the recipient. Rather, it conveys it to a “mail server” computer owned by the recipient’s Internet service provider, which stores the message until the recipient chooses to access it. The recipient may then use the Internet service provider’s facilities to continue to store all or part of the original message, to rewrite it, to forward all or part of it to third parties, or otherwise to process its contents — for example, by retrieving World Wide Web pages that were hyperlinked in the message. The service thus provides more than a simple transmission path; it offers users the “capability for . . . acquiring, storing, transforming, processing, retrieving, utilizing, or making available information through telecommunications.”

79. More generally, though, it would be incorrect to conclude that Internet access providers offer subscribers separate services — electronic mail, Web browsing, and others — that should be deemed to have separate legal status, so that, for example, we might deem electronic mail to be a “telecommunications service,” and Web hosting to be an “information service.” The service that Internet access providers offer to members of the public is Internet access. That service gives users a variety of advanced capabilities. Users can exploit those capabilities through applications they install on their own computers. The Internet service provider often will not know which applications a user has installed or is using. Subscribers are able to run those applications, nonetheless, precisely because of the enhanced functionality that Internet access service gives them.

80. The provision of Internet access service involves data transport elements: an Internet access provider must enable the movement of information between customers’ own computers and the distant computers with which those customers seek to interact. But the provision of Internet access service crucially involves information-processing elements as well; it offers end users information-service capabilities inextricably intertwined with data transport. As such, we conclude that it is appropriately classed as an “information service.”

81. An Internet access provider, in that respect, is not a novel entity incompatible with the classic distinction between basic and enhanced services, or the newer distinction between telecommunications and information services. In essential aspect, Internet access providers look like other enhanced — or information — service providers. Internet access providers, typically, own no telecommunications facilities. Rather, in order to provide those components of Internet access services that involve information transport, they lease lines, and otherwise acquire telecommunications, from telecommunications providers — interexchange carriers, incumbent local exchange carriers, competitive local exchange carriers, and others. In offering service to end users, however, they do more than resell those data transport services. They conjoin the data transport with data processing, information provision, and other computer-mediated offerings, thereby creating an information service. Since 1980, we have classed such entities as enhanced service providers. We conclude that, under the 1996 Act, they are appropriately classed as information service providers.

82. Our findings in this regard are reinforced by the negative policy consequences of a conclusion that Internet access services should be classed as “telecommunications.” We have already described some of our concerns about the classification of information service providers generally as telecommunications carriers. Turning specifically to the matter of Internet access, we note that classifying Internet access services as telecommunications services could have significant consequences for the global development of the Internet. We recognize the unique qualities of the Internet, and do not presume that legacy regulatory frameworks are appropriately applied to it. 

Read the whole thing here: https://transition.fcc.gov/Bureaus/Common_Carrier/Reports/fcc98067.pdf