Computer Inquiry I, Regulatory and Policy Problems Presented by the Interdependence of Computer and Communication Service Facilities: Notice of Proposed Rulemaking and Tentative Decision, 28 F.C.C.2d 291 (1970), Final Decision and Order, 28 F.C.C.2d 267 (1971), aff'd in part sub nom. GTE Serv. Corp. v. FCC, 474 F.2d 724 (2d Cir. 1973) (full-text), decision on remand, Order, 40 F.C.C.2d 293 (1973).
The Federal Communications Commission first examined the relationship between communications and computer processing in Computer I. In the Notice of Inquiry that opened that proceeding, the Commission explained that communications common carriers were rapidly becoming equipped to enter into the data processing field. For example, the Commission described the activities of Western Union in establishing computer centers in key cities to provide a variety of data processing, storage, and retrieval services to the public. While noting that the Bell System had not yet revealed any plan to provide data processing services similar to Western Union's, the Commission discussed technological steps the Bell System companies were taking that would permit them to do so, including converting all central offices to electronic switching. Recognizing that common carriers were or would be offering services that were competitive with those sold by nonregulated entities (e.g., computer manufacturers), and that such entities would be dependent upon common carriers for reasonably priced communication facilities and services, the Commission sought comment on the circumstances under which data processing, computer information, and message switching services were or should be subject to the provisions of the Communications Act.
In Computer I, the Commission determined that the data processing industry was competitive and, therefore, the Commission should not assert regulatory authority over it. In refraining from regulating data processing services, however, the Commission distinguished them from regulated communications services. The Commission initially determined that services combining both communications and data processing functions (i.e., “hybrid” services) would be classified on a case-by-case basis. The Commission also permitted common carriers to furnish data processing services through a “maximum separation” policy to keep them from favoring their own data processing activities through anticompetitive activities.
- ↑ Western Union would also arrange to design, procure, and install all hardware necessary for a fully integrated data processing and communication system for individual customers, in addition to managing such a system for the customer.
- ↑ The Commission also noted that there was evidence of a trend among several major domestic and international common carriers:
- to program their computers not only for switching services, but also for the storage, processing, and retrieval of various types of business and management data of entities desiring to subscribe therefor in lieu of such industries providing this service to themselves on an in-house basis or contracting with computer firms for the service.
- In the Matters of Appropriate Framework for Broadband Access to the Internet Over Wireline Facilities, 20 FCC Rcd. 14853, 14866-67 (2005).