[*]Mr. Frieden holds a B.A. degree from the University of Pennsylvania (1977) and a J.D. degree from the University of Virginia (1980). Mr. Frieden is an Associate Professor with the College of Communications at Penn State University. Mr. Frieden can be reached by mail at 201-D Carnegie Building, University Park, PA, 16802, by phone at (814) 863-7996 or by e-mail at rmf5@psu.edu.

[1] See, e.g., Western Union Tel. Co. v. Esteve Bros., 256 U.S. 566 (1921) (exculpatory clauses in common carrier tariff limited liability to refunding cost of carriage despite substantial financial damage resulting from non-delivery of an message transmitted only once). See also Christy Cornell Kunin, Unilateral Tariff Exculpation in the Era of Competitive Telecommunications, 41 CATH. U. L. REV. 907 (1992) (an examination of exculpation of common carrier liability).

[2] See, e.g., In re Bell System Tariff Offerings of Local Distribution Facilities for Use by Other Common Carriers, 46 F.C.C.2d 413 (1974), aff'd sub nom. Bell Tel. Co. of Pa. v. FCC, 503 F.2d 1250 (3d Cir. 1974), cert. denied, 422 U.S. 1026, reh'g denied, 423 U.S. 886 (1975); MCI Telecomms. Corp. v. FCC, 580 F.2d 590, cert. denied, 439 U.S. 980 (1978) (access to local exchange facilities mandated); In re Establishment of Domestic Communication-Satellite Facilities by Nongovernmental Entities, 22 F.C.C.2d 86, 97 (1970), pol'y reaff'd, 34 F.C.C.2d 9, 64-5, adopted, 35 F.C.C.2d 844, 856 (1972), on recon., 38 F.C.C.2d 665 (1972) (domestic satellite policy mandates non-discriminatory, diverse, and flexible access to domestic satellites and earth station facilities); accord, In re Establishment of Policies and Procedures for Consideration of Application to Provide Specialized Common Carrier Services in the Domestic Public Point-to-Point Microwave Radio Service, 29 F.C.C.2d 870, 940 (1971) (AT&T required to afford local exchange facility access to competing inter-city carriers), on recon., 35 F.C.C.2d 1106 (1971), aff'd sub nom. Washington Util. & Transp. Comm. v. FCC, 513 F.2d 1192 (9th Cir.), cert. denied, 423 U.S. 836 (1975). In re Use of the Carterfone Device in Message Toll Telephone Service, 13 F.C.C.2d 420, recon. denied, 14 F.C.C.2d 571 (1968) (invalidating local exchange carrier tariff restrictions on interconnection of customer premises equipment with the telephone network); In re Telerent Leasing Corp., 45 F.C.C.2d 204 (1974), aff'd sub nom. North Carolina Util. Comm'n v. FCC, 537 F.2d 787 (4th Cir.), cert. denied, 429 U.S. 1027 (1976); In re Proposals for New or Revised Classes of Interstate and Foreign Message Toll Telephone Service (MTS) and Wide Area Telephone Service (WATS), 56 F.C.C.2d 593 (1975), recon., 58 F.C.C.2d 736 (1976) (second order), aff'd sub nom. North Carolina Util. Comm'n v. FCC, 552 F.2d 1036 (4th Cir.), cert. denied, 434 U.S. 874 (1977) (preempting the states on the matter of customer premises equipment interconnection with the telephone network).

[3] "A firm controlling bottleneck facilities has the ability to impede access of its competitors to those facilities. We must be in a position to contend with this type of potential abuse. We treat control of bottleneck facilities as prima facie evidence of market power requiring detailed regulatory scrutiny. . . . Control of bottleneck facilities is present when a firm or group of firms has sufficient command over some essential commodity or facility in its industry or trade to be able to impede new entrants. Thus bottleneck control describes the structural characteristic of a market that new entrants must either be allowed to share the bottleneck facility or fail." In re Policy and Rules Concerning Rates for Competitive Common Carrier Services and Facilities Authorizations Therefor, 85 FCC 2d 1, 36 (1980). See also United States v. Terminal R.R. Ass'n, 224 U.S. 383 (1912) (first order) (antitrust court ordered railroads to provide competitors equivalent access to bottleneck railway terminal facilities), appealed after remand, 236 U.S. 194 (1915); In re An Inquiry Into the Use of the Bands 825-845 MHz and 870-890 MHz for Cellular Communications Systems, 86 F.C.C.2d 469, 495-96 (1981) (Commission required telephone companies to furnish interconnection to cellular systems upon terms no less favorable than those used by or offered to wireline carriers), modified, 89 F.C.C.2d 58 (1982), further modified, 90 F.C.C.2d 571 (1982); In re Need to Promote Competition and Efficient Use of Spectrum for Radio Common Carrier Services, 59 Rad. Reg. 2d (P & F) 1275 (1986), clarified, 2 F.C.C.2d 2910 (1987), aff'd on recon., 4 F.C.C.R. 2369 (1989) (Commission clarified policies regarding interconnection of cellular and other radio common carrier facilities to landline network); Lincoln Tel. & Tel. Co. v. FCC, 659 F.2d 1092, 1103-06 (D.C. Cir. 1981) (court upheld Commission's order requiring Lincoln to provide interconnection facilities to MCI); MCI Telecomms. Corp. v. FCC, 580 F.2d 590 (D.C. Cir.), cert. denied, 439 U.S. 980 (1978); Bell Tel. Co. of Pa. v. FCC, 503 F.2d 1250 (3d Cir. 1974), cert. denied, 422 U.S. 1026 (1975), reh'g denied, 423 U.S. 886 (1975).

[4] See, e.g., Sable Communications, Inc. v. FCC, 492 U.S. 115 (1989) (upholding a federal statute prohibiting obscene telephone messages, but overturning application of the statute to adult access to indecent messages via telecommunications common carriers that are entitled to First Amendment protection).

[5] See Wold Communications, Inc. v. FCC, 735 F.2d 1465 (D.C. Cir. 1984) (upholding FCC decision approving non-common carrier leasing of satellite transponders).

[6] See Midwest Video Corp. v. FCC, 571 F.2d 1025 (8th Cir. 1978), aff'd, 440 U.S. 689 (1979) (cable television held not to be common carriage).

[7] See Stratton Oakmont, Inc. v. Prodigy Serv. Co., No. 31063/94, 1995 WL 323710, (N.Y. Sup. Ct. 1995).

[8] For a discussion of an information service provider's civil liability for defamation, etc., see Anne Wells Branscomb, Anonymity, Autonomy, and Accountability: Challenges to the First Amendment in Cyberspaces, 104 YALE L. REV. 1639 (1995).

[9] See Rob Frieden, Contamination of the Common Carrier Concept in Telecommunications, 19 TELECOMM. POL'Y 685 (1995).

[10] See Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 114 S. Ct. 2445, 129 L. Ed. 2d 497 (1994).

[11] Professor Eli Noam identifies the demise of common carriage as a predictable consequence of the evolution in telecommunications from a network of networks to a systems of systems. Questions of market access and the terms and conditions of interconnection become less important when networks, service providers and types of players proliferate. But Professor Noam does identify a number of responsibilities, historically managed by common carriers and their government overseers, e.g., universal services, interoperability and physical interconnection. If common carriers need not address these obligations, or can agree to perform some of them in exchange for further deregulation, what guarantee exists that a larger, more diverse and heterogeneous set of system operators will find it in their enlightened self interest to assume the responsibility? Professor Noam suggests the need for new policy instruments that emphasize neutral interconnection: an obligation to interconnect with and deliver the traffic of any other carrier once a carrier itself seeks interconnection with another carrier. Eli M. Noam, Beyond Liberalization: From the Network of Networks to the System of Systems, 18 TELECOMM. POL'Y 286 (1994); Eli M. Noam, Beyond Liberalization II: The Impending Doom of Common Carriage, 18 TELECOMM. POL'Y 435 (1994).

[12] "Common-carriage regulation, however, should not be viewed as a panacea. Just because it can be implemented lawfully does not mean it will work well. Indeed, we suspect that, for most [mass] media, a thoughtful policy analyst will reject the common carrier model." Thomas G. Krattenmaker & L.A. Powe, Jr., Converging First Amendment Principles for Converging Communications Media, 104 YALE L.J. 1719,1738 (1995).

[13] Ironically, while the Telecommunications Act of 1996 expressly states the intention not to modify, impair, or supersede anything in the Communications Act of 1934, unless so provided in the law, its tinkering with the common carrier concept makes it more likely that application of the pure model will not be sustained. Telecommunications Act of 1996 § 601(c) (1), Pub. L. No. 104-104, 110 Stat. 56, 143, reprinted in Historical and Statutory Notes, 47 U.S.C.A. § 152(1996). See also Telecommunications Act of 1996 § 601(a) (1), Pub. L. No. 104-104, 110 Stat. 56, 143, reprinted in Historical and Statutory Notes, 47 U.S.C.A. § 152(1996) (applicability of consent decrees). The Act authorizes the FCC to forbear from enforcing any regulation or provision of the Act if the Commission determines that such enforcement is not necessary to guard against discrimination, to ensure just and reasonable services, to protect consumers, and to serve the public interest. 47 U.S.C.A. § 160(a) (1996).

[14] See, e.g., Information Infrastructure Task Force, National Information Infrastructure Agenda For Action (1993); Andrew D. Auerbach, Mandatory Access and the Information Infrastructure, 3 CommLaw Conspectus 1 (1995) (discussing existing and proposed mandatory access laws); Fred H, Cate, The First Amendment and the National Information Infrastructure, 30 Wake Forest L. Rev. 1 (1995).

[15] The Telecommunications Act of 1996 imposes such structural safeguards on a Bell Operating Company's entry into inter-LATA interexchange telecommunication services and equipment manufacturing previously prohibited by the Modification of Final Judgment. 47 U.S.C. § 271 (1996).

[16] Chesapeake & Potomac Tel. Co. of Virginia v. United States, 830 F. Supp. 909 (E.D. Va. 1993), aff'd 42 F.3d 181 (4th Cir. 1994), cert. granted, 115 S. Ct. 2608, 132 L.Ed.2d 852 (1995); US West, Inc. v. United States, 855 F. Supp. 1184 (W.D. Wash. 1994), aff'd, 48 F.3d 1092 (9th Cir. 1994); BellSouth Corp. v. United States, 868 F. Supp. 1335 (N. D. Ala. 1994); Ameritech Corp. v. U.S., 867 F. Supp. 721 (N.D. Ill. 1994). See Laurence H. Winer, Telephone Companies Have First Amendment Rights Too: The Constitutional Case for Entry Into Cable, 8 CARDOZO ARTS & ENT. L.J. 257 (1990).

[17] See, e.g., Cubby, Inc. v. CompuServe, Inc., 776 F. Supp. 135 (S.D.N.Y. 1991).

[18] See, e.g., Playboy Enterprises, Inc. v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993) (finding electronic bulletin board operator liable for allowing a user to infringe on trademarks and copyrights by posting images onto its bulletin board).

[19] See Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 114 S. Ct. 2445, 129 L. Ed. 2d 497 (1994).

[20] The Telecommunications Act of 1996 § 401, Pub. L. No. 104-104, 110 Stat. 56, 128 (1996), codified at 47 U.S.C. § 160 (1996) authorizes the FCC to forbear from applying any provision of the Communications Act and existing Commission regulations when it determines that such oversight is not necessary to ensure just and reasonable rates, consumer protection, and service in the public interest. Soon after enactment of the Telecommunications Act of 1996 the Commission initiated a proceeding designed to eliminate the tariff filing requirement for long distance common carriers providing interstate services. See Policy and Rules Concerning the Interstate, Interexchange Marketplace, 11 F.C.C.R. 9564 (1996) (implementation of section 254(g) of the Communications Act of 1934, as amended).

[21] In re Policy and Rules Concerning Rates for Competitive Common Carrier Services and Facilities Therefor, 77 F.C.C.2d 308 (1979) (notice of inquiry and proposed rulemaking); First Report and Order, 85 F.C.C.2d 1 (1980); Second Report and Order, 91 F.C.C.2d 59 (1982), recon. denied, 93 F.C.C.2d 54 (1983); Third Report and Order, 48 Fed. Reg. 46,791 (1983); Fourth Report and Order, 95 F.C.C.2d 554 (1983), rev'd and remanded sub. nom. American Tel. & Tel. Co. v. FCC, 978 F.2d 727 (D.C. Cir. 1992); Fifth Report and Order, 98 F.C.C.2d 1191 (1984); Sixth Report and Order, 99 F.C.C.2d 1020 (1985), rev'd and remanded sub nom. MCI Telecomms. Corp. v. FCC, 765 F.2d 1186 (D.C. Cir. 1985), aff'd sub nom. MCI Telecomms. Corp. v. American Tel. & Tel. Co., 512 U.S. 218 (1994).

[22] See Carlin Comms., Inc. v. Mountain States Tel. & Tel. Co., 827 F.2d 1291, 1293 (9th Cir. 1987) (affirming right of telephone company to terminate an adult programming telephone service as a matter of business judgment), cert. denied, 485 U.S. 1029 (1988). See also Ellen L. Nagel, First Amendment Constraints on the Regulation of Telephone Pornography, 55 U. CIN. L. REV. 237 (1986); Cindy L. Petersen, The Congressional Response to the Supreme Court's Treatment of Dial-a-Porn, 78 GEO. L.J. 2025 (1990).

[23] Cubby, Inc. v. CompuServe Inc., 776 F. Supp. 135, 140 (S.D.N.Y. 1991) (on-line information services provider who assigned editing/moderating function of an electronic bulletin board to a third party not liable for allegedly defamatory material on electronic bulletin board).

[24] See, e.g., Chesapeake & Potomac Tel. Co. of Virginia v. United States, 830 F. Supp. 909 (E.D. Va. 1993), aff'd, 42 F.3d 181 (4th Cir. 1994), vacated and remanded, 116 S. Ct. 1036, 134 L. Ed. 2d 46 (1996) (remanded to consider mootness).

[25] See e.g., In re Expanded Interconnection with Local Telephone Company Facilities, 7 F.C.C.R. 7369 (1992) (order and notice of proposed rulemaking) (proposing to mandate physical co-location of private carrier facilities on Local Exchange Carrier premises to promote facilities-based competition for local switched services), on recon., 8 F.C.C.R. 127 (1992), on further recon., 8 F.C.C.R. 7341 (1993) (second reconsideration order), vacated in part and remanded sub nom. Bell Atlantic, Inc. v. FCC, 24 F.3d 1441 (D.C. Cir. 1994) (deeming physical co-location an unlawful taking of property), on remand, 9 F.C.C.R. 5154 (1994) (proposing virtual co-location). See also In re Expanded Interconnection with Local Telephone Company Facilities, Transport Phase II, 9 F.C.C.R. 2718 (1994); In re Local Exchange Carriers' Rates, Terms, and Conditions for Expanded Interconnection Through Virtual Collocation for Special Access and Switched Transport, Phase II, 10 F.C.C.R. 11116 (1995); In re Transport Rate Structure and Pricing, 7 F.C.C.R. 7006 (1992) (order and further notice of proposed rulemaking) (transport is a component of interstate switched access, which LECs provide to enable interexchange carriers (IXCs) and other customers to originate and terminate interstate switched telecommunications traffic and where transport constitutes the local transmission between customer points of presence (POPs) and LEC end offices, where local switching occurs), on further recon., 8 F.C.C.R. 5370 (1993) (first reconsideration order), on further recon., 8 F.C.C.R. 6233 (1993) (second reconsideration order), on further recon., FCC 94-325 (released Dec. 22, 1994) (third reconsideration order and notice of proposed rulemaking).

[26] To appreciate the extent to which Congress has considered and previously failed to enact telecommunication legislation see Telecommunications Act of 1996, S. REP. NO. 104-230, pts. 1-2, (February 1, 1996); H.R. 1555; H.R. REP. NO. 104-204, pts. 1-4 (July 24, 1996); 104-223 (August 1, 1995); S. 652; S. REP. NO. 104-23 (March 30, 1995); H.R. 3626; H.R. REP. NO. 103-559, pts. 1-2 (June 24, 1994); HR 3626; H.R. REP. NO. 103-560 (June 24, 1994); S. 1822; S. REP. NO. 103-367, pts. 1-2 (September 14, 1994).

[27] See, e.g., Information Infrastructure Task Force, National Information Infrastructure Agenda For Action (1993); Andrew D. Auerbach, Mandatory Access and the Information Infrastructure, 3 CommLaw Conspectus 1 (1995) (discussing existing and proposed mandatory access laws); Fred H, Cate, The First Amendment and the National Information Infrastructure, 30 Wake Forest L. Rev. 1 (1995)

[28] The Cable Communications Policy Act of 1984 § 613(b) (1) makes it unlawful for a common carrier subject to Title II of the Communications Act to provide video programming directly to subscribers in its telephone service area, either directly or indirectly through an affiliate owned by, operated by, controlled by, or under common control with the common carrier. Pub. L. No. 98-549, 98 Stat. 2780 (1984) codified at 47 U.S.C. A. § 533(b) (1) (1992) implemented at 47 C.F.R. § 63.54(b). The 1984 Cable Act prevents LECs and their affiliates to provide video programming directly to subscribers in their telephone service area. Because the cross-ownership prohibition addresses programming not ownership, a telephone company may acquire a cable television company that operates within the telephone company's service area, provided it does not provide the programming. See, e.g., In re Chesapeake & Potomac Tel. Co., 57 Rad. Reg. 2d (P & F) 1003 (1985) (approving construction by a telephone company of facilities to be used for cable television by an unaffiliated programmer).

[29] See Robert Corn-Revere, New Technology and the First Amendment: Breaking the Cycle of Repression, 17 HASTINGS COMM. & ENT. L.J. 247 (1994).

[30] On two separate occasions, an appellate court has ruled that the FCC could not accord non-dominant carriers the option of refraining from filing tariffs. See American Tel. & Tel. Co. v. FCC, 978 F.2d 727 (D.C. Cir. 1992) and the mandatory detariffing of services; MCI Telecomms. Corp. v. FCC, 765 F.2d 1186 (D.C. Cir. 1985), aff'd sub nom. MCI Telecomms. Corp. v. American Tel. & Tel. Co., 512 U.S. 218 (1994). However, the Telecommunications Act of 1996 makes it possible for the FCC unilaterally to forbear from applying statutory provisions even in the absence of Congressional action to repeal such provisions. See supra note 20.

[31] A carrier cannot "vitiate its common carrier status merely by entering into private contractual relationships with its customers." Southwestern Bell Tel. Co. v. FCC, 19 F.3d 1475, 1481 (D.C. Cir. 1994). On the other hand, "it does not make sense that the filing of the terms of any contract-no matter how customer tailored-with the FCC, without more, reflects a conscious decision to offer the service to all takers on a common carrier basis." Id.

[32] Entry by telephone companies into cable television and other information service markets supports the "diversity principle" of the First Amendment, i.e., that a multiplicity of speakers will maximize freedom of expression. See Associated Press v. United States, 326 U.S. 1, 20 (1945) (First Amendment goal is to ensure "the widest possible dissemination of information from diverse and antagonistic sources"). But speaker and publisher freedoms that permit telephone companies to deny access, which they could not do under the common carrier model, vitiates diversity unless robust competition exists and the telephone company has no bottleneck control. "[A]ssuring that the public has access to a multiplicity of information sources is a governmental purpose of the highest order, for it promotes values central to the First Amendment." Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 114 S. Ct. 2445, 129 L. Ed. 2d 497 (1994).

[33] "The decentralized, open-access model presents a sharp contrast to the centralized, one-way channel model that typifies most mass media today." Jerry Berman & Daniel J. Weitzner, Abundance and User Control: Renewing the Democratic Heart of the First Amendment in the Age of Interactive Media, 104 YALE L.J. 1619, 1623 (1995).

[34] United States v. American Tel. & Tel. Co., 552 F. Supp. 131, 226-234 (D.D.C. 1982), cert. denied, 460 U.S. 1001 (D.D.C. 1982). This consent decree, a modification of final judgment (MFJ), settled an antitrust suit brought by the federal government in 1974 alleging an unlawful combination within the Bell System resulting in the monopolization of both long distance telephone service and the manufacture of telecommunications equipment.

[35] The MFJ specified that the core lines of business of the divested Bell Operating Companies (BOCs) to be exchange telecommunications and exchange access functions, i.e., local and long distance services within a geographical service region known as a Local Access and Transport Area (LATA). Section IV(G) of the MFJ defines a LATA as "one or more contiguous local exchange areas serving common social, economic, and other purposes, even where such configuration transcends municipal or other local governmental boundaries." Id. at 229. The 163 LATAs created by the MFJ can be as large as a state, e.g., New Mexico, but typically represent a portion of one state. Section II(A) of the MFJ requires the BOCs to provide exchange access "on an unbundled, tariffed basis that is equal in type, quality, and price to that provided to AT&T." Id. at 227.

[36] In United States v. Western Elec. Co., 673 F. Supp. 525 (D.D.C. 1987), Judge Greene held that the RBOCs had failed to make an affirmative showing that they would lack ability to use their monopoly power anticompetitively, when providing information services, because they retained bottleneck power over the local loop. He declined to amend that decision, 690 F. Supp. 22 (D.D.C. 1987), but subsequently allowed the RBOCs to engage in transmission of information, including voice storage and retrieval, but not in the generation of content. United States v. Western Elec. Co., 714 F. Supp. 1 (D.D.C. 1988). On appeal, the D.C. Circuit affirmed in part, but reversed the lower court's decision to use the more burdensome Line of Business waiver standard established in Section VII(c) of the MFJ instead of the more liberal standard established in Section VII applicable when no party to the MFJ opposes a waiver grant. United States v. Western Elec. Co., 900 F.2d 283 (D.C. Cir. 1990). On remand, Judge Greene held that while the RBOCs still possessed market power information services, within the meaning of the antitrust laws, he had to apply the more liberal waiver standard as mandated by the Court of Appeals. United States v. Western Elec. Co., 767 F. Supp. 308 (D.D.C. 1991).

[37] In May 1994, a coalition of five consumer organizations filed two separate petitions asking the FCC to: (1) ensure that video dialtone facilities are deployed in a nondiscriminatory manner and that services are made available universally, and (2) commence rulemaking to modify the Section 214 application process to ensure equitable introduction of video dialtone and public involvement in the application process. The coalition consists of the Center for Media Education, Consumer Federation of America, Office of Communication of the United Church of Christ, National Association for the Advancement of Colored People, and the National Council of La Raza. See Petition for Relief from Unjust and Unreasonable Discrimination in the Deployment of Video Dialtone Facilities (filed May 23, 1994); Petition for Rulemaking to Adapt the Section 214 Process to the Construction of Video Dialtone Facilities (filed May 23, 1994). "In the petition for relief, the Petitioners again allege that there are indications of 'electronic redlining' in the construction applications of several Regional Bell Operating Companies (RBOCs). The Petitioners state that the RBOCs propose to bypass many lower income and/or minority communities in their initial deployment of video dialtone service. The Petitioners argue that this is a discriminatory practice inconsistent with the goal of universal service as established in the Communications Act." Pleading Cycle Established for Comments on Petition for Rulemaking and Petition for Relief in Section 214 Video Dialtone Application Process, 9 F.C.C.R. 3036 (June 13, 1994).

[38] In National Assoc. of Regulatory Util. Comm'r v. FCC, 525 F.2d 630 (D.C. Cir. 1976), cert. denied, 425 U.S. 992 (1976), the Court of Appeals for the District of Columbia affirmed an FCC decision to refrain from applying common carrier status to a new type of terrestrial mobile radio service. The FCC chose to classify Specialized Mobile Radio Service (SMRS) as non-common carriage because the operators would enter the marketplace without a captive subscriber base, i.e., users having no option but to use SMRS, and no market power, i.e., the ability to affect the price or supply of land mobile radio services. The court upheld the Commission's non-common carrier determination because it could find no "substantial likelihood that SMRS will hold themselves out to serve indifferently those who seek to avail themselves of their particular services." Id. at 642. A telecommunications common carrier must "offer indiscriminate service to whatever public its service may legally and practically be of use." Id. The court noted that SMRS operators typically offer service on a medium-to-long term contractual basis and concluded that the FCC acted reasonably in classifying SMRS as non-common carriage.

[39] Telecommunications Act of 1996 § 401, 47 U.S.C. ? 160 (1996). Soon after enactment of the Act, the FCC proposed to eliminate the tariff filing requirement for non-dominant interexchange carriers. See In re Policy and Rules Concerning the Interstate, Interexchange Marketplace, CC Docket No. 96-61, Second Report and Order , FCC 96-424, 1996 WL 633345 (F.C.C.) (rel. October 31, 1996).

[40] Carlin Comms., Inc. v. Mountain States Tel. & Tel. Co., 827 F.2d 1291, 1293-94 (9th Cir. 1987).

[41] Id. at 1294 (analogizing decision in Dollar A Day Rent A Car Systems, Inc. v. Mountain States Telephone & Telegraph Co., 526 P.2d 1068, 1071 (1974), which found that refusal of a telephone company Yellow Pages subsidiary to publish a listing containing price information as non-discriminatory).

[42] Carlin Comms. v. Mountain States, 827 F.2d at 1294 (citation omitted). See also Carlin Comm., Inc. v. Southern Bell Tel. & Tel. Co., 802 F.2d 1352, 1357-61 (11th Cir. 1986) (permitting tariff with content restrictions on material qualifying for First Amendment protection as legitimate business judgment); Network Comms. v. Michigan Bell Tel. Co., 703 F. Supp. 1267, 1274 (E.D. Mich. 1989) (affirming telephone company decision to cut off billing and collection services for a dial-a-porn operator).

[43] See In re Competition in the Interstate Interexchange Marketplace, 6 F.C.C.R. 5880, 5906-08 (1991), on recon., 6 F.C.C.R. 7569 (1991), further recon., 7 F.C.C.R. 2677 (1992), further recon., 8 F.C.C.R. 2659 (1993), further recon., 10 F.C.C.R. 4562 (1995). "Contract carriage would further benefit consumers by unleashing competitive forces for business services to the maximum extent possible. By permitting customers to seek competitive bids from all carriers in the long-distance market--and allowing AT&T to offer customers the same types of contract deals that its competitors are already offering--contract carriage will expand customers' choices." Id. at ¶ 105.

[44] Carlin Comms. v. Mountain States, 827 F.2d at 1294-95 (citation omitted).

[45] Jerome A. Barron, The Telco, the Common Carrier Model and the First Amendment - The "Dial-A-Porn" Precedent, 19 RUTGERS COMPUTER & TECH. L.J. 371, 386 (1993).

[46] The court in Carlin Comms. v. Mountain States "is really saying here that the telco can censor an information service even though a state statute could not. The reason the state could not effect such censorship is that it would violate the First Amendment. But if one views the telco as a private actor, then a telco's decision to prohibit the transmission of a certain category of messages - in this case, Carlin's 'adult entertainment service' - is simply an editorial decision such as broadcasters and newspapers make all the time." Id. at 385, n.44. Professor Barron rejects this analysis on the view that it might be possible for the telephone company "to become the dominant information provider--overtaking broadcasting, cable broadcasting and newspapers it would have more power than government" to affect speech, yet freely able to do so. Id. Most courts have rejected the view that telephone company decision making on carriage represents state action. See, e.g., Dial Info. Serv. Corp. v. Thornburgh, 938 F.2d 1535, 1543 (2d Cir. 1991), cert. denied, 502 U.S. 1972 (1992) (finding no government compulsion whether to bill or not bill for dial-a-porn services). Such a finding would make the refusal to carry or bill for such material more difficult, since the First Amendment analysis would be undertaken with closer scrutiny. See Jackson v. Metropolitan Edison Co., 419 U.S. 345, 352 (1974) (attributing action of a private company to the state when the company exercises powers traditionally and exclusively reserved to the state). Censorship, as opposed to editing and business decision making, would constitute state action. See Carlin Comms., Inc. v. South Cent. Bell Tel. Co., 461 So.2d 1208, 1214 (La. Ct. App. 1984) (finding dial-a-porn messages deemed obscene may be censored by the telco to serve the traditional state concern about minors' exposure to obscenity).

[47] Barron, supra note 46, at 390. "If the telcos as information providers are too quickly suited with First Amendment armor and labelled [sic] speakers or editors, they can too easily shed the non-discriminatory access obligations of the common carrier. The end result could be that the regional telco will not only control who enters the conduit but also what can be said on it." Id. at 403.

[48] The FCC first attempted to create a bright line separation between enhanced service functions, which are unregulated and subject to robust competition, and basic transport capacity, which is regulated and not robustly competitive. See In re Amendment of Section 64.702 of the Commission's Rules and Regulations (Second Computer Inquiry), 77 F.C.C.2d 384 (final decision), mod. on recon. 84 F.C.C.2d 50 (1980), further mod., 88 F.C.C.2d 512 (1981), aff'd sub nom., Computer & Comms. Ind. Ass'n v. FCC, 693 F.2d 198 (D.C. Cir. 1982), cert. denied, 461 U.S. 938 (1983). However, the FCC subsequently decided that structural separation imposed unnecessary costs and burdens. It opted for non-structural safeguards like account auditing and the complaint process. See Third Computer Inquiry, Report and Order, 104 F.C.C.2d 958 (1986), mod. on recon., 2 F.C.C.R.. 3035 (1987), further recon., 3 F.C.C.R. 1135 (1988); Phase II, CC Docket No. 85-229, Report and Order, 2 F.C.C.R. 3072 (1987), recon. denied, 3 F.C.C.R. 1150 (1988), rev'd in part and remanded sub nom., California v. FCC, 905 F.2d 1217 (9th Cir. 1990), on remand, 6 F.C.C.R. 7571 (1991), rev'd in part and remanded sub nom., California v. FCC, 39 F.3d 919 (9th Cir. 1994). See also Robert M. Frieden, The Third Computer Inquiry: A Deregulatory Dilemma, 38 FED. COMMS. L.J. 383 (1987); Robert M. Frieden, The Computer Inquiries: Mapping the Communications/Information Processing Terrain, 33 FED. COMMS. L.J. 55 (1981).

[49] Midwest Video Corp. v. FCC, 571 F.2d 1025, 1051 (8th Cir. 1978), aff'd, 440 U.S. 689 (1979).

[50] See Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 114 S. Ct. 2445, 129 L. Ed. 2d 497 (1994).

[51] 114 S. Ct. at 2466.

[52] See Edward J. Naughton, Is Cyberspace a Public Forum? Computer Bulletin Boards, Free Speech and State Action, 81 GEO. L.J. 409 (1992); Patrick O'Neill, Optimizing and Restricting the Flow of Information: Remodeling the First Amendment for a Convergent World, 55 U. PITT. L. REV. 1057 (1994); Eric Schlachter, Cyberspace, the Free Market and the Free Marketplace of Ideas: Recognizing Legal Differences in Computer Bulletin Board Functions, 16 HASTINGS COMM. & ENT. L.J. 87 (1993); Eugene Volokh, Cheap Speech and What It Will Do, 104 YALE L.J. 1805 (1995).

[53] While analogizing an on-line, bulletin board to an electronic publisher, a New York court also characterized such a service as "the electronic equivalent of a talk show . . . ." Stern v. Delphi Internet Serv. Corp., 626 N.Y.S.2d 694, 790 (Sup. Ct. 1995) (considering liability for use of radio personality's photograph on an electronic bulletin board).

[54] For a thoughtful comparison of the Madisonian view, i.e., promoting public deliberation, and marketplace of ideas free speech traditions as applied to new information technologies, see Cass R. Sunstein, The First Amendment in Cyberspace, 104 YALE L.J. 1757, 1759-60 (1995).

[55] See Edward V. Di Lello, Functional Equivalency and Its Application to Freedom of Speech on Computer Bulletin Boards, 26 COLOM. J.L. & SOC. PROBS. 199 (1993).

[56] Cubby, Inc. v. CompuServe, Inc., 776 F. Supp. 135, 140 (S.D.N.Y. 1991) (finding no liability for allegedly defamatory material where on-line information services provider assigned editing/moderating control of an electronic bulletin board to a third party).

[57] Stratton Oakmont, Inc. v. Prodigy Serv. Co., 1995 WL 323710 at *4 (N.Y. Sup. Ct. 1995) (citations omitted).

[58] Telecommunications Act of 1996 § 509(c), 47 U.S.C. § 230(c) (1996). In Shea on Behalf of American Report v. Reno, 930 F.Supp. 916, 65 U.S.L.W. 2095 (S.D.N.Y. 1996) the publisher of an electronic newspaper raised First Amendment challenges to the Communications Decency Act section that criminalizes use of interactive computer service to send or display patently offensive materials. The court granted a preliminary injunction holding that the section would be given strict scrutiny on a challenge that it was overbroad and that a complete ban on constitutionally protected indecent communications between adults was unconstitutional. See also American Civil Liberties Union v. Reno, 929 F.Supp. 824, 64 U.S.L.W. 2794 (E.D.Pa. 1996) (Granting preliminary injunction on enforcement of Communications Decency Act provisions, 47 U.S.C. §§ 223(a), 223(d) (1996), prohibiting transmission of obscene or indecent material by means of a telecommunications device).

[59] See 47 U.S.C. § 223 (1994) (prohibiting the use of a telephone to transmit obscene communications, and indecent communications to persons under the age of 18 or to persons over 18 without that person's consent); implemented in Regulations Concerning Indecent Communication By Telephone, 5 F.C.C.R. 4926 (1990), on partial recon., 10 F.C.C.R. 665 (1994) (clarifying that Section 223 applies to LECs who may not have a contractual relationship with a provider of indecent programming and that intermediary interexchange carriers have a duty to inform LECs providing billing and collection services of the nature of such calls).

[60] Telecommunications Act of 1996 § 653, 47 U.S.C. § 573 (1996).

[61] This statement results from an assumption that Congress must expressly repeal a provision of the Communications Act of 1934, as amended, to render such provision unenforceable. Section 401 of the Telecommunications Act of 1996 appears to authorize the FCC to refrain from enforcing a statutory provision, even in the absence of Congressional action to repeal the specific provision. Telecommunications Act of 1996 § 401, 47 U.S.C. § 160 (1996). Such latitude would afford the Commission the option of unilaterally eliminating, completely or partially, the fundamental common carrier requirements imposed by Title II of the Communications Act. Such carte blanche deregulatory opportunities typically require legislative action. Indeed, much of what Congress did affecting common carriers in the Telecommunications Act of 1996 specifies the rights and responsibilities of common carriers, e.g., what constitutes full and fair interconnection. See, e.g., Communications Act of 1934 § 251, 47 U.S.C. § 251 (1996).

[62] See, e.g., Central Hudson Gas & Elec. Corp. v. Public Serv. Comm., 447 U.S. 557 (1980) (holding that monopoly common carrier status does not bar public utility from exercising its First Amendment protected commercial speech rights to advertise); Pacific Gas & Elec. Co. v. Public Serv. Comm., 475 U.S. 1 (1986) (holding that public utility not obligated to provide space in its billing envelope for a citizen's group newsletter). See also Angela J. Campbell, Publish or Carriage: Approaches to Analyzing the First Amendment Rights of Telephone Companies, 70 N.C. L. REV. 1071 (1992).

[63] See In re Comsat Study-Implementation of Section 505 of the International Maritime Satellite Telecommunications Act, 77 F.C.C.2d 564 (1980) [hereinafter Comsat Study]. "We concluded in the Comsat Study that the Communications Satellite Act of 1962 permits Comsat to engage in activities which are not inconsistent with its statutory mission. We stated that Comsat should not be foreclosed from applying its corporate technology and expertise to the development of new lines of business which would likely contribute to the overall development of satellite technology and which would be in the public interest. However, we found that Comsat's involvement in diversified lines of business raised significant public policy problems. These problems included conflicts of interest resulting from Comsat's involvement in both jurisdictional and nonjurisdictional activities, competitive advantages in nonjurisdictional markets flowing from Comsat's unique status as the U.S. Signatory to INTELSAT and INMARSAT, and potential cross-subsidization resulting from the misallocation of jurisdictional and nonjurisdictional costs." Changes in the Corporate Structure and Operations of the Communications Satellite Corporation, CC Docket 80-634, Second Mem. Op. & Ord., 97 F.C.C.2d 145 (1984) (requiring formation of separate subsidiaries when pursuing nonjurisdictional markets), on recon., 99 F.C.C.2d 1040 (1984); see also First Mem. Op. & Ord., 90 F.C.C.2d 1159 (1982).

[64] 47 U.S.C. §§ 701-744 (1995).

[65] Comsat Study, 77 F.C.C.2d at ? 511; see also National Ass'n of Broadcasters v. FCC, 740 F.2d 1190 (D.C. Cir. 1984) (affirming conditional right of Comsat to enter non-common carrier direct broadcast satellite service market through a separate corporate entity).

[66] See, e.g., United States v. Western Elec. Co., 1995-1 Trade Cases ? 70,973, 890 F.Supp. 1 (D.D.C. 1995) (allowing Bell Operating Companies to resell inter-LATA long distance telephone service via cellular radio and other wireless ventures subject to several conditions including the formation of a separate resale subsidiary).

[67] The Telecommunications Act of 1996 requires Bell Operating Companies to form separate subsidiaries when engaging in the business lines previously prohibited by the MFJ, viz., providing interexchange, long distance services across Local Access and Transport ("LATA") boundaries and manufacturing telecommunication equipment. Telecommunications Act of 1996 § 272, 47 U.S.C. § 272 (1996).

[68] Sixth Report and Order, 99 F.C.C.2d 1020 (1985), rev'd and remanded sub nom., MCI Telecomms. Corp. v. FCC, 765 F.2d 1186 (D.C. Cir. 1985), aff'd sub nom. MCI Telecomms. Corp. v. American Tel. & Tel. Co., 512 U.S. 218 (1994); Fifth Report and Order, 98 F.C.C.2d 1191 (1984); Fourth Report and Order, 95 F.C.C.2d 554 (1983), rev'd and remanded sub nom., American Tel. & Tel. Co. v. FCC, 978 F.2d 727 (D.C. Cir. 1992); Third Report and Order, 48 Fed. Reg. 46,791 (1983); Second Report and Order, 91 F.C.C.2d 59 (1982), recon. denied, 93 F.C.C.2d 54 (1983); In re Policy and Rules Concerning Rates for Competitive Common Carrier Services and Facilities Authorizations Therefor, 77 F.C.C.2d 308 (1979) (notice of inquiry and proposed rulemaking); First Report and Order, 85 F.C.C.2d 1 (1980).

[69] Competitive Carrier , First Report and Order, 85 F.C.C.2d 1, 6 (1980).

[70] Competitive Carrier, Fourth Report and Order, 95 F.C.C.2d 554, 555 n.1 (1983).

[71] MCI Telecomms. Corp. v. FCC, 765 F.2d 1186 (D.C. Cir. 1985).

[72] Id. at 1191-92.

[73] American Tel. & Tel. Corp. v. FCC, 978 F.2d at 735-36.

[74] Id. at 736.

[75] Id.

[76] Id. The court stated that "[w]hether detariffing is made mandatory, as in the Sixth Report [of the Competitive Carrier proceeding], or simply permissive, as in the Fourth Report, carriers are, in either event, relieved of the obligation to file tariffs under section 203(a). That step exceeds the limited authority granted the Commission in section 203(b) to 'modify' requirements of the Act." Id. (footnote omitted).

[77] In Louisiana Public Service Commission v. FCC, 476 U.S. 355 (1986), the Supreme Court rejected the FCC's attempt to preempt the states on plant depreciation, because Section 152(b) of the Communications Act expressly denied FCC "jurisdiction with respect to (1) charges, classifications, practices, services, facilities, or regulations for or in connection with intrastate communication service . . . ." 47 U.S.C. § 152(b) (Supp. 1996). The Court reversed an FCC ruling that Section 220 of the Communications Act authorized the Commission to preempt inconsistent state depreciation regulations for intrastate ratemaking purposes. Louisiana Pub. Serv., 476 U.S. at 377. The Commission sought to stimulate innovation and modernization of the telecommunications infrastructure by prescribing faster depreciation schedules that would allow telephone companies to recoup investment over a shorter period of time. Id. at 362. Faster depreciation schedules would result in an unpopular and politically undesirable upward pressure on local rates. Fearing the potential for higher rates resulting from FCC regulatory initiatives, state public utility commissions challenged the assertion of jurisdiction as an illegal attempt to regulate intrastate "charges" under Section 152(b) of the Communications Act. Id. at 366. No matter how reasonable, given changed circumstances and the need to provide a way for telephone companies to accelerate depreciation and speed deployment of new technologies, the clear language of the Communications Act "fences off from FCC reach or regulation intrastate matters--indeed, including matters 'in connection with' instate service." Id. at 370.

[78] MCI Telecomms. Corp. v. American Tel. & Tel. Co., 512 U.S. 218, 114 S. Ct. 2223, 2233, 129 L. Ed. 2d 182 (1994) (citations omitted).

[79] Southwestern Bell Corp. v. FCC, 43 F.3d 1515 (D.C. Cir. 1995).

[80] See FEDERAL STATE JOINT BOARD ON UNIVERSAL SERVICE, NOTICE OF PROPOSED RULEMAKING AND ORDER ESTABLISHING JOINT BOARD, CC Docket No. 96-45, FCC 96-93 (rel. March 8, 1996); Recommended Decision, FCC No. 965-3, 1996 WL 656113 (F.C.C.) (rel. November 8, 1996).

[81] At least one court rejects the view that the FCC can assume unlimited discretion in determining the regulatory classification of a new service: "We recognize the Commission's authority to approve services on an experimental basis in an effort to gather important market data to be used in the completion of a regulatory framework. Moreover, . . . that discretion is particularly capacious when the Commission is dealing with new technologies unforeseen at the time the Communications Act was passed. But that discretion is not boundless: the Commission has no authority to experiment with its statutory obligations." National Ass'n of Broadcasters v. FCC, 740 F.2d 1190, 1200-1201 (D.C. Cir. 1984) (citation omitted) (concluding that the Commission engaged in forbidden statutory experimentation in exempting from Title III broadcasting regulation lessees of DBS transponder provided by common carriers).

[82] The Communications Satellite Act of 1962 § 101 et seq., 47 U.S.C. §§ 701-744 establishes Comsat as the sole United States investor in the two major global satellite cooperatives. Comsat operates as a "carrier's carrier" by leasing capacity at wholesale rates to other international carriers who then retail it to end users. See Authorized User Policy, 97 F.C.C.2d 296 (1984), reaff'd, 99 F.C.C.2d 177 (1985), aff'd sub nom., Western Union Int'l v. FCC, 804 F.2d 1280 (D.C. Cir. 1986).

[83] One of the key "principles and goals" of the National Information Infrastructure initiative will be to "[e]xtend the 'universal service' concept to ensure that information resources are available to all at affordable prices." INFORMATION INFRASTRUCTURE TASK FORCE, NATIONAL INFORMATION INFRASTRUCTURE PROGRESS REPORT 2 (1994).