Well, as my colleague Adam Peters points out below, the FCC has (finally) decided AT&T's petition for a declaratory ruling. The Commission held that AT&T must pay access charges because "the service which AT&T describes is a telecommunications service"--not an information service. It is the right result, I think, under the current rules in which all turns on whether the service is classified as "telecommunications" or an "information service". Until rules are changed in accordance with accepted processes, we live in a system that, thankfully, places a high value on abiding by them.

So right result. The Commission should have acted months ago to provide AT&T the clarification it requested back in October 2002.

But even a casual reading of the FCC's order shows why the advent of VoIP and other IP services will force policymakers sooner rather than later to confront the reality that the old regulatory paradigms no longer make sense. Much of the Commission's explanation for its action rests on the determination that AT&T's service "does not involve a net protocol conversion" or provide "enhanced functionality" or result in a "change in the form or content" of the information as sent and received." Ergo, a telecom service.

Net protocol conversions and changes in form and content? As I pointed out early this year in "The Metaphysics of VoIP", distinctions based on these functional concepts are the stuff of philosophers. Why, just last week at the gathering of my local metaphysical club, we spent the evening discussing what really happens to the form and content of a VoIP call as it experiences numerous protocol conversions and reconversions!

Don't get me wrong. I understand the Commission is playing with the regulatory definitional deck is was dealt in the 1996 Telecom Act, which was lifted from the 1980 Computer II decision. But what the Commission's action on the AT&T petition really illustrates--aside from reinforcing the notion that equity and stability and respect for the law are promoted by adherence to rules until they are changed--is that in today's digital world we need a new paradigm in which regulatory decisions are based on marketplace realities. Then the focus would be on treating services that are substituable from a consumer's perspective in a like fashion--not on whether a net protocol conversion occured.