Award Winning Blog

Tuesday, February 17, 2009

Can Common Carrier Regulated Telephone Companies Limit Service Plans to Bundled Subscribers?

Several press outlets have disclosed that Verizon may offer very low cost telephone service options available only to subscribers who already have Verizon-provided Internet access. See
One $5 plan would limit outbound calling to 911 emergency and Verizon customer service, while a $10 plan would include some regular outbound calls.

The last time I checked Verizon remained a common carrier telecommunications service provider obligated to file local telephone service tariffs and subject to non-discrimination requirements contained in Title II of the Communications Act. I do not believe Verizon can lawfully offer a telecommunications service limited to a select group of customers who “qualify” to take this service if and only if they also buy Internet access from Verizon.

Perhaps this low cost Verizon service is not circuit switched telephone service, but Voice over the Internet Protocol (“VoIP”) service instead. Arguably Verizon would have no tariff filing obligation, or nondiscrimination obligation for VoIP if classified as an information service. However if the FCC allows Verizon to offer this sort of pre-qualified customer access to VoIP service, the Commission may in effect validate the view that VoIP is not a telecommunications service, something Comcast recently emphasized in response to an FCC letter inquiring whether the company was favoring its VoIP service by exempting it from network management functions that could throttle VoIP offered by competitors. See Letter from Dana R. Shafer, Chief Wireline Competition Bureau and Matthew Berry, General Counsel to Katheryn A. Zachem, Vice President Regulatory Affairs, Comcast Corp. (Jan. 18, 2009); available at:;
Comcast’s response is available at:

Heretofore the FCC has managed to avoid having to make an either/or (telecommunications service vs. information service) classification for retail VoIP. Verizon may not even have anticipated that a marketing tactic to stave off complete wireline customer migration may force the FCC to make an important regulatory call.