Cybertelecom Federal Internet Law & Policy An Educational Project

Common Carriers

"Infrastructures, for purposes such as transportation and communication, have long been vital to national welfare. They knit together a country's economy by facilitating the movement of people, products, services, and ideas, and play important roles in national security." - NSFNet Final Report p. 4.

Definitions

• Telecommunications
• Telecommunications Service / Basic Service
• Telecommunications Provider
• Common Carrier
• Information Service

Characteristics of a Common Carrier Network

• Separation between the network infrastructure service and the content carried by the network
• End user chooses:
  • Content of end users choice See Midwest Video II (finding that FCC reclassified cable video services as common carriers where by FCC rule control of the cable services content was transferred from cable operators to members of the public who wish to communicate by the cable medium)
  • Destination of end users choice
  • Form of content of end users choice (applications, devices, containers, envelopes....)

  See FCC Open Internet Principles

Eras of Networks Becoming Common Carriers

	Postal Service	Telegraph	Telephone	Internet
Invention Innovation	2400 BC: courier networks found in Egypt 1639: First notice of mail service in the colonies 1737: Benjamin Franklin appointed Post Master of Philadelphia. 1775: Continental Congress establishes a Post Office. Benjamin Franklin was the first Post Master. The Continental Congress was concerned to establish a postal service that was secure and free from search and seizure by British authorities - and anyone else for that matter. Postal riders "had to swear to secure his mail under lock and key"	1832: Samuel Morse invents electromagnetic telegraph 1842: Congress appropriates $30,000 for Morse to build a telegraph between Baltimore and Washington (only USG owned telegraph) 1844: Morse opens telegraph line with message "What hath God Wrought?" 1846: First commercial telegraph line constructed, between D.C. and NYC 1851: New York and Mississippi Valley Printing Telegraph Company founded (a.k.a. Western Union)	1872: Bell produces initial drawings of "harmonic telegraph" 1876: Bell patents telephone 1877: Bell establishes American Bell company 1878: First North American Telephone Exchange 1879: First telephone numbers used 1880: 47,900 telephones in United States 1884: First long distance telephone call 1885: AT&T established	October 29, 1969 ARPANet first packets sent 1995: 25,000 websites worldwide 1971: Internet network email 1994-5: Commercial VoIP products released 1997: Yahoo! mail launched 1998: Google launched 2005: YouTube launched 2006: Twitter launched 2007: Netflix launched
Disruption (new displaces the old)	1861: With the completion of the transcontinential telegraph, the Pony Express is decommissioned USPS report concludes that email will displace first class mail	Electric telegraph disrupts optical telegraph. 1860: Western Union wins USG contract to build transcontinental telegraph, per Pacific Telegraph Act. 1861 Transcontinental telegraph completed. 1966: Refuse to lease lines to data networks claiming they were competing long distance messaging services 2006: Last telegram sent	1907: Theodore Vail, who initially worked for the USPS, modeled telephone service after the Post Office. 1908: AT&T acquires Western Union. Customers can order WU telegrams by telephone. WU competitor Postal Telegraph sues. 1966: Refuse to lease lines to data networks claiming they were competing long distance messaging services	2013: FCC initiates PSTN Transition proceeding
Competition		1850s "Era of Waistful Competition"	1894: Bell's telephone patents expire Era of "Dual Service"	1989: First commercial ISP 1991: Establishment of Commercial Internet eXchange 1993-95: NSF privatizes Internet ~2000: 7000 indepedent dial up ISPs
Consolidation		1865: Civil War ends; many of Western Unions competitors have been destroyed 1866: Treaty of Six Nations devides the market 1879: Western Union and AT&T legal settlement to stay out of each others markets 1943: Last remaining competitor Postal Telegraph is acquired by Western Union	1900s AT&T uses control of access to capital, control of equipment manufacturing (Western Electric), and interconnection to force independents out of business and acquire markets 1908: AT&T Pres. Theodore Vail unveils his PR campaign, "One System, One Policy, Universal Service." 1913: Kingsbury Commitment (AT&T agrees to stop acquiring independents and to interconnect) 1921: Willis Graham Act - AT&T is a natural govt sanctioned monopoly 1934: Communications Act establishes FCC	2005: FCC rules broadband Internet providers do not need to share network (unlike dial-up). One Network; One Service again becomes a reality. 2000s era of major broadband Internet mergers
Market Protection / Innovation Stagnation	1866: Postal Roads Act gives USG authority to nationalize telegraph 1870s: Argues that telegraph should be nationalized (Gould who is attempting to establish telegraph monopoly argues against nationalization). 1914: Successfully argues that telegraph and telephone should be nationalized 1980s: Argues that commercial email should be illegal.	Western Union / Associated Press alliance Hubbard "attacked Western Union as resisting technological innovation, remarking prophetically, in 1874, that "the day for new inventions has not passed . . . the potentialities of the telegraph are boundless; no man dare say what the future will bring forth.""[Wolff 41] 1960s WU Refuses to lease lines to computer networks	AT&T Blocks foreign attachments / third party CPE AT&T attempts to block market entrance by competitive long distance providers 1960s AT&T Refuses to lease lines computer networks 1996: ACTA petition to regulate VoIP 2005: LECs thwart AT&T Long Distance's entrance into local telephone service market; AT&T gives up and sells off AT&T broadband to Comcast 2006-11: LECs refuse to interconnect with VoIP providers 2005: Madison River Telco blocks Vonage 2008: Comcast blocks bittorrent 2010: Comcast / Netflix interconnection dispute
Evolution (legacy network evolves to new service)	1870s Introduces mailgrams where customer could mail message, which would be taken to Western Union, transmitted, printed, and then delivered as a letter. It flopped. 1980s: Introduces ECOM where customer could use USPS to send an email, which would be transmitted, printed, and then delivered as a letter. It flopped.	1877: Western Union enters telephone service 1908: AT&T acquires Western Union (AT&T would divest itself of WU in 1913 pursuant to antitrust concerns) Many startups use the name "telephone and telegraph" offering both services	AT&T (Long Distance) enters cable broadband market in order to enter "lucrative" local telephone service (LEC) market Late 1990s traditional network service (cable, telco, ILECs, RLECs, Coops) providers offer Internet service 2002: Comcast acquires AT&T Broadband and proceedings to build its own backbone 2005-06: Verizon, SBC acquire Internet backbones 2011: Centurylink acquires Savvis and Qwest 2013: FCC initiates PSTN > IP Transition proceeding
Adoption Critical service		1861-65: Electronic telegraph used during Civil War. First war where leader receives real time reports from front. Western Union given 15,000 miles of telegraph line from North. "As one U.S. Senator warned, the power of the telegraph could scarcely be overestimated, for all urgent business and social correspondence was carried out via telegraph and "it is the means of fluencing public opinion through the press, of acting upon the markets of the country, and of seriously affecting. the interests of the people."" [Wolff 41]
Common Carriage Classification	1781: Congress ratifies Articles of Confederation including: "The United States in Congress assembled shall also have the sole and exclusive right and power of, establishing or regulating post offices from one State to another, throughout all the United States, and exacting such postage on the papers passing through the same as may be requisite to defray the expenses of the said office ." Article IX 1791: Bill of Rights Ratified. Paul Starr contrasts the new rights to those enjoyed in Britain: "Most provisions in the Bill of Rights restated rights that the English had enjoyed under the common law, but one element that grew specifically out of the Revolution era was the Fourth Amendment: "The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue but upon probable cause, supported by Oath or affirmation, and particularly describing the placed to be searched, and the persons or things to be seized." The reference to "papers" underlines the historical connection of the Fourth Amendment to freedom of expression." [Starr 95]	1866: Post Roads Act (granting access to postal roads, and trees public lands for use as telegraph poles in exchange for - priority service to the USG and - non discriminatory service to all) 1887: Interstate Commerce Act establishes the Interstate Commerce Commission 1894: Primrose v Western Union, 154 US 1 (1894) Telegraph companies resemble railroad companies and other common carriers, in that they are instruments of commerce, and in that they exercise a public employment, and are therefore bound to serve all customers alike, without discrimination. They have, doubtless, a duty to the public to receive, to the extent of their capacity, all messages clearly and intelligibly written, and to transmit them upon reasonable terms. But they are not common carriers. Their duties are different, and are performed in different ways; and they are not subject to the same liabilities. Express Co. v. Caldwell, 21 Wall. 264, 269, 270; Telegraph Co. v. Texas, 105 U.S. 460 , 464. 1901: WESTERN UNION TELEGRAPH CO. v. CALL PUB. CO., 181 U.S. 92 (1901) (telegraph is common carrier) 1908: US becomes a member of the International Telegraph Union Convention & ITU 1910 Mann-Elkins Act 1934: Communications Act establishes FCC	1879: Connecticut and Missouri began to regulate telephone companies as public utilities. This is followed my other actions by state authorities 1909: US Telephone v Central Union, 171 F 130 (1909) (long distance carriers must interconnect, cannot discriminate against, local carriers) 1910: Mann-Elkin Act expands ICC jurisdiction to include telephone, telegraph, and cable 1910: ICC initiates investigation of AT&T	1966: Computer I NOI 1969: Computer scientists believe that they are creating a public data network utility 1980: Telenet tariffed service 1980: Computer II (Internet over dial-up is not common carriage) 1998: Stevens Report (Internet over dial-up is not common carriage; VoIP looks like it could be common carriage) 1998: Internet over DSL is a common carrier 2005: Internet over Broadband Order (Broadband Internet is not common carriage) 2010: Open Internet (Internet both is and is not common carriage) 2015 Open Internet (Internet is common carriage) 2017 Restoring Internet Freedom (Internet is not common carriage) Internet networks treated as common carriers other areas law: copyright; gambling; third party content; wiretap; CALEA; network addrtesses;

Common Carrier Definition / Classification

Public

47 USC 153(11)Common carrier: The term "common carrier" or "carrier" means any person engaged as a common carrier for hire, in interstate or foreign communication by wire or radio or interstate or foreign radio transmission of energy, except where reference is made to common carriers not subject to this chapter; but a person engaged in radio broadcasting shall not, insofar as such person is so engaged, be deemed a common carrier.

47 C.F.R. 101.3: Communication common carrier. Any person engaged in rendering communication service for hire to the public.

National Ass'n of Regulatory Utility Commissioners v. FCC (NARUC I), 525 F.2d 630, 640 (DC Cir. 1976) [641] What appears to be essential to the quasi-public character implicit in the common carrier concept is that the carrier "undertakes to carry for all people indifferently . . .
[641-42] This requirement, that to be a common carrier one must hold oneself out indiscriminately to the clientele one is suited to serve, is supported by common sense as well as case law. The original rationale for imposing a stricter duty of care on common carriers was that they had implicitly accepted a sort of public trust by availing themselves of the business of the public at large. The common carrier *642 concept appears to have developed as a sort of quid pro quo whereby a carrier was made to bear a special burden of care, in exchange for the privilege of soliciting the public's business.
Moreover, thecharacteristic of holding oneself out to serve indiscriminately appears to be an essential element, if one is to draw a coherent line between common and private carriers.

National Association of Regulatory Utility Commissioners v. FCC, 533 F.2d 601, 608 (1976) (NARUC II) ("An examination of the common law reveals that the primary sine qua non of common carrier status is a quasi-public character, which arises out of the undertaking 'to carry for all people indifferently. . .'")

A network becomes a "public" or "common carrier" network when it becomes engrained into public life. When a network has moved from innovation to critical infrastructure upon which rely for daily life, it has become the "public network." In 1993, when defining the term "public switched network," the FCC stated "The purpose of the public switched network is to allow the public to send or receive messages to or from anywhere in the nation" In re Implementation of Section (3)(n) and 332 of the Communications Act; Regulatory Treatment of Mobile Services, Dkt 93-252, Second Report and Order, para 59 (1993). This is a functional definition of the network - it looks to end user expectations and usage. When the network has become so engrained in life to become the publics way of communicating with each other, it has become "the public network."

"Although the nature and scope of the duties imposed on common carriers have evolved over the last century, see, e.g., Orloff v. FCC, 352 F.3d 415, 418–21 (D.C. Cir. 2003) (discussing the implications of the relaxation of the tariff-filing requirement), the core of the common law concept of common carriage has remained intact. In National Association of Regulatory Utility Commissioners v. FCC, 525 F.2d 630, 642 (D.C. Cir. 1976) (NARUC I), we identified the basic characteristic that distinguishes common carriers from “private” carriers—i.e., entities that are not common carriers—as “[t]he common law requirement of holding oneself out to serve the public indiscriminately.” “[A] carrier will not be a common carrier,” we further explained, “where its practice is to make individualized decisions, in particular cases, whether and on what terms to deal.” Id. at 641. Similarly, in National Association of Regulatory Utility Commissioners v. FCC, 533 F.2d 601, 608 (1976) (NARUC II), we concluded that “the primary sine qua non of common carrier status is a quasi-public character, which arises out of the undertaking to carry for all people indifferently.” (Internal quotation marks omitted)." - Verizon v. FCC, Slip at 48 (DC Cir. Jan. 14, 2014)

Harry M. Trebing, Common Carrier Regulation—The Silent Crisis, 34Law andContemporaryProblems299-329 (Spring 1969)
pp. 300-01: Justifications for economic regulation of common carriers

• The first factor is the existence of externalities. Externalities are large benefits that accrue to nonusers and nonconsumers of a service, or heavy costs that are borne by nonproducers, so that the actual prices and costs fail to accurately reflect marginal social gains and marginal social costs. Under these circumstances, private profit maximization will yield suboptimal results.
• A second factor is the existence of a distinctive set of cost characteristics associated with supplying common carrier services. Depending on the time period or stage of production under consideration, these firms display high threshold costs, common costs, joint costs, and economies of scale. The combined effect of these cost characteristics is to introduce economic forces which tend both to limit the number of firms in a given market and to increase the basis for discriminatory pricing.... [I believe this is the natural monopoly argument]
• A third factor is the need to assure that public resources required for the provision of communications services will be efficiently utilized....
• Fourth, regulation is necessary to curb the potential for abusive pricing practices inherent in the demand for communications services....
• Fifth, common carrier service derives its value from the universe that can be reached by any given subscriber. Under these circumstances, artificial restraints (whether imposed by interconnection restrictions or discriminatory pricing) which limit this market are contrary to the public interest. Lack of compatibility between subscriber units, with a consequent loss of system integrity, is equally detrimental. A potential conflict between public and private objectives therefore arises. Profit maximization may dictate that the carrier strive for product differentiation. The consumer, on the other hand, will be interested in the greatest freedom of choice in terms of access to the system.

Content of End Users Choosing

National Association of Regulatory Utility Commissioners v. FCC, 533 F.2d 601, 609 (1976) (NARUC II) ("A second prerequisite to common carrier status was mentioned but not discussed in the previous N.A.R.U.C. opinion. It is the requirement formulated by the FCC and with peculiar applicability to the communications field, that the system be such that customers "transmit intelligence of their own design and choosing."" citing Industrial Radiolocation Service, 5 F.C.C.2d 197, 202 (1966); Frontier Broadcasting Co. v. FCC, 24 F.C.C. 251, 254 (1958) (Holding one-way cable television transmission to be a noncommon carrier activity, because the content of transmissions is not under the control of the subscriber).)

Specialized

National Ass'n of Regulatory Utility Commissioners v. FCC (NARUC I), 525 F.2d 630, 641 (DC Cir. 1976) (This does not mean a given carrier's services must practically be available to the entire public. One may be a common carrier though the nature of the service rendered is sufficiently specialized as to be of possible use to only a fraction of the total population. And business may be turned away either because it is not of the type normally accepted or because the carrier's capacity has been exhausted.)

National Association of Regulatory Utility Commissioners v. FCC, 533 F.2d 601, 608 (1976) (NARUC II) ("This does not mean that the particular services offered must practically be available to the entire public; a specialized carrier whose service is of possible use to only a fraction of the population may nonetheless be a common carrier if he holds himself out to serve indifferently all potential users.")

Classified by Occupation, Not Status

"Moreover, the characteristic of holding oneself out to serve indiscriminately appears to be an essential element, if one is to draw a coherent line between common and private carriers." National Association of Regulatory Utility Commissioners v. FCC, 533 F.2d 601, 608 (1976) (NARUC II)

Infrastructure / Economic Input

"Infrastructure" is a term of considerable vagueness. It can best be described as those services that are a basic input to most other economic activities, and which provide substantial positive externalities to the economy as a whole. Transportation, energy, communications, education, and protection are prime examples. Network industries, in particular, are considered infrastructure services. The positive externalities to members of the network increase positively with added membership, for example by the greater reach of the telephone.21
Infrastructure services can greatly contribute to the economic growth of individuals, regions and the nation. In consequence, in most countries they are provided by government. When historically they were provided in the past by private firms, English common law courts often imposed some quasi-public obligations, one of which one was common carriage. It mandated the provision of service to willing customers, bringing common carriage close to a service obligation to all once it was offered to some.
-- Eli M. Noam, Beyond Liberalization II: The Impending Doom of Common Carriage, 18 Telecom. Pol'y 435. Sec. III.3. (1994).

Another attempt to identify common carrier obligations involves reference to infrastructure services. As infrastructure services, transportation and telecommunications have a special role with regard to the activities of other industries. Telecommunications have "positive externalities," such that as the network expands with new users, uses and greater interconnection, prior users receive greater benefits from their own access. Networks can greatly contribute to the economic growth of individuals, regions and the nation. Conversely, the have the potential to retard economic activity. In consequence, in most industrialized countries, telecommunications is still provided by the government as an infrastructure service. --[NY p. 48]

Carriers Distinguished From...

Monopoly / Market Power

Common carriage is a concept of common law. It does not in and of itself necessitate regulation by an agency. The fact that a firm is not regulated does not mean that it is not, at common law, a common carrier. In a competitive market, competition generally disciplines the common carrier firms. In other markets, regulation of common carriers takes the place of a competitive market. [Trebing, p. 301 ("For the most part, [the objectives of common carrier regulation] are similar to those of the perfectly competitive market.")

Natural Monopoly and Its Regulationby Richard A. Posner

Some historians and commenters have focused on the issues of 1) monopoly or market power, and 2) essentiality as the drivers behind the imposition of common carrier duties. However, these rationale do not seem to adequately account for many instances of common carriage obligations imposed on competitive industries.-- [NY p. 48]

Thomas Nachbar, Open Access, TPRC 2006 (rejecting "market power" as a justification for 'open access' requirements - arguing instead that it is the characteristic of 'transport network' that is crucial)

Regulated Monopolies

One must distinguish the notion of common carriage from several other intertwined concepts that are frequently but inaccurately used as synonyms. A common carrier need not be a "public utility" or a "regulated monopoly," and vice versa; for example, public buses operating as common carriers are usually neither utilities nor monopolies; conversely, public utilities in electricity provision are not usually common carriers. Another concept, the "universal service obligation", is the requirement of a carrier to reach every willing user and desired destination, wherever located, while common carriage refers to service obligations toward users given a physical plant. Finally, "affordable rates," though often tied to common carriage, are a monopoly and utility issue; where common carriage is concerned with prices it is not with their absolute levels but rather with relative ones, to prevent price-discrimination as a way to unduly differentiate among users or uses... In 1901, following many state courts, the U.S. Supreme Court held that at common law-- i.e., even without a specific statute-- a telegraph company is a common carrier and owes a duty of non-discrimination.8 Thus the concept of common carriage does not depend on public utility regulation, and a user's rights of service from a common carrier do not rely solely on statute. Statutory public service regulation augmented common law common carriage rather than supplanted it.9, 10 -- Eli M. Noam,Beyond Liberalization II: The Impending Doom of Common Carriage, 18 Telecom. Pol'y 435, Sec. II (1994).

Public Utilities

One must distinguish the notion of common carriage from several other intertwined concepts that are frequently but inaccurately used as synonyms. A common carrier need not be a "public utility" or a "regulated monopoly," and vice versa; for example, public buses operating as common carriers are usually neither utilities nor monopolies; conversely, public utilities in electricity provision are not usually common carriers. Another concept, the "universal service obligation", is the requirement of a carrier to reach every willing user and desired destination, wherever located, while common carriage refers to service obligations toward users given a physical plant. Finally, "affordable rates," though often tied to common carriage, are a monopoly and utility issue; where common carriage is concerned with prices it is not with their absolute levels but rather with relative ones, to prevent price-discrimination as a way to unduly differentiate among users or uses.... In 1901, following many state courts, the U.S. Supreme Court held that at common law-- i.e., even without a specific statute-- a telegraph company is a common carrier and owes a duty of non-discrimination.8 Thus the concept of common carriage does not depend on public utility regulation, and a user's rights of service from a common carrier do not rely solely on statute. Statutory public service regulation augmented common law common carriage rather than supplanted it.9, 10 -- Eli M. Noam, Beyond Liberalization II: The Impending Doom of Common Carriage, 18 Telecom. Pol'y 435. Sec. II (1994).

It is important to note that the concept of common carriage is distinct from public utility regulation. A user's right of service from a common carrier are not dependent on statute. Statutory public service regulation has augmented common law common carriage rather than supplanting it. See Hewitt v. New York, NH & HRR Co., 284 NY 117 (1940) (involving discrimination charges against a rail carrier), and Trailways of New England, Inc. v. CAB, 412 F2d 926, 931 (1st Cir. 1969) (regarding an air carrier), where the court stated, "not only is the right to be treated fairly and non-discriminatorily by a common carrier an expression of the pervasive precept of fairness between government and governed that runs through American jurisprudence, it is one derived from the common law of common carriers." [NY p. 44]

"Until competition began to make inroads in the 1990s, telephone companies were treated as public utilities." - Sterling, Bernt, Weiss, Shaping American Telecommunications, p. 23 (2006)

Charles F Phillips, Regulation of Public Utilities: Theory and Practice, Third Edition PUR 1993

New State Ice Co. v. Liebmann, 285 U.S. 262, 304 (1932) (“The cases just cited show that, while, ordinarily free competition in the common callings has been encouraged, the public welfare may at other times demand that monopolies be created. Upon this principle is based our whole modern practice of public utility regulation. It is no objection to the validity of the statute here assailed that it fosters monopoly. That, indeed, is its design. The certificate of public convenience and invention [sic] is a device – a recent social-economic invention – through which the monopoly is kept under effective control by vesting in a commission the power to terminate it whenever that course is required in the public interest.”) (Justice Brandeis)

Non Common Carrier

See Statutory Jurisdiction over Common Carriers

Kansas City S. Ry. Co. v. United States, 282 U.S. 760, 764 (1931) (“There is no doubt that common carriers, subject to the Interstate Commerce Act, may have activities which lie outside the performance of their duties as common carriers and are not subject to the provisions of the act.”)

Interstate Commerce Comm’n v. Goodrich Transit Co., 224 U.S. 194, 211 (1912) (noting that non-common carrier activities are not within the Interstate Commerce Commission’s jurisdiction)

Private Carrier

"Although the nature and scope of the duties imposed on common carriers have evolved over the last century, see, e.g., Orloff v. FCC, 352 F.3d 415, 418–21 (D.C. Cir. 2003) (discussing the implications of the relaxation of the tariff-filing requirement), the core of the common law concept of common carriage has remained intact. In National Association of Regulatory Utility Commissioners v. FCC, 525 F.2d 630, 642 (D.C. Cir. 1976) (“NARUC I”), we identified the basic characteristic that distinguishes common carriers from “private” carriers—i.e., entities that are not common carriers—as “[t]he common law requirement of holding oneself out to serve the public indiscriminately.” “[A] carrier will not be a common carrier,” we further explained, “where its practice is to make individualized decisions, in particular cases, whether and on what terms to deal.” Id. at 641. Similarly, in National Association of Regulatory Utility Commissioners v. FCC, 533 F.2d 601, 608 (1976) (“NARUC II”), we concluded that “the primary sine qua non of common carrier status is a quasi-public character, which arises out of the undertaking to carry for all people indifferently.” (Internal quotation marks omitted)." - Verizon v. FCC, Slip at 48 (DC Cir. Jan. 14, 2014)

National Association of Regulatory Utility Commissioners v. FCC, 533 F.2d 601, 608 (1976) (NARUC II) ("That isto say, a carrier will not be a common carrier where *609 its practice is to make individualized decisions in particular cases whether and on what terms to serve.")

National Ass'n of Regulatory Utility Commissioners v. FCC (NARUC I), 525 F.2d 630, 641 (DC Cir. 1976) But a carrier will not be a common carrier where its practice is to make individualized decisions, in particular cases, whether and on what terms to deal.

Cellco Partnership v. FCC, 700 F.3d 534 (D.C. Cir. 2012) ("“common carriage is not all or nothing—there is a gray area in which although a given regulation might be applied to common carriers, the obligations imposed are not common carriage per se.” Id. In this “space between per se common carriage and per se private carriage,” we continued, “the Commission’s determination that a regulation does or does not confer common carrier status warrants deference.” " p. 547)

Railroad Company v. Lockwood, 84 U.S. 357 (1873) an entity is a common carrier when it carries articles as part of its “regularly established business,” but may “become a private carrier, or a bailee for hire, when . . . [it] undertakes to carry something which it is not [its] business to carry.”

"In Santa Fe, Prescott & Phoenix Railway Company v. Grant Brothers Construction Company, 228 U.S. 177 (1913), for example, the Court noted “the established doctrine . . . that common carriers cannot secure immunity from liability for their negligence by any sort of stipulation,” but explained that “this rule has no application when a railroad company is acting outside the performance of its duty as a common carrier.” Id. at 184, 185."

Kansas City S. Ry. Co. v. United States, 282 U.S. 760, 764 (1931) (“There is no doubt that common carriers, subject to the Interstate Commerce Act, may have activities which lie outside the performance of their duties as common carriers and are not subject to the provisions of the act.”);

Interstate Commerce Comm’n v. Goodrich Transit Co., 224 U.S. 194, 211 (1912) (noting that non-common carrier activities are not within the Interstate Commerce Commission’s jurisdiction).

Cannot Impose Common Carrier Obligations on Non Common Carriers

“A telecommunications carrier shall be treated as a common carrier under this [Act] only to the extent that it is engaged in providing telecommunications services.” 47 U.S.C. § 153(51)

• See “A person engaged in the provision of a service that is a private mobile service shall not, insofar as such person is so engaged, be treated as a common carrier for any purpose under this [Act].” 47 U.S.C. §332(c)(2)
• Cellco Partnership v. FCC, 700 F.3d 534 (D.C. Cir. 2012) ("data roaming rule imposed no per se common carriage requirements because it left “substantial room for individualized bargaining and discrimination in terms.” Cellco, 700 F.3d at 548. The rule “expressly permit[ted] providers to adapt roaming agreements to ‘individualized circumstances without having to hold themselves out to serve all comers indiscriminately on the same or standardized terms.’” Id.")
• Verizon v. FCC, D.C. Cir. 2014 (overturning FCC's Open Internet rules on the grounds that the Open Internet rules constituted common carrier obligations and the FCC had concluded that broadband Internet services were not common carriers).

Duty / Obligation

• Standard of Care / Liability
• Non Discrimination
• Access by Individuals with Disabilities
• Reasonable Network Management
• Rates; Rate Regulation; Just Reasonable Rates
• Interconnection

National Ass'n of Regulatory Utility Commissioners v. FCC (NARUC I), 525 F.2d 630, 640 (DC Cir. 1976) ("The late nineteenth century saw the advent of common carriers being subjected to price and service regulations as well. At first challenged as deprivations of property without due process, these early regulations were upheld on the basis of the near monopoly power exercised by the railroads, coupled with the fact that they "exercise a sort of public office" in the duties which they perform. *641 Subsequently, legislation has been upheld imposing stringent regulations of various types on entities found to be affected with a public character, even where nothing approaching monopoly power exists. In such cases as the Motor Carrier Act of 1935, relatively competitive carrying industries have been subjected to entry, rate and equipment regulations on the basis of the quasi-public character of the activities involved")

Originally, the doctrine was used to impose a greater standard of care upon carriers who held themselves out as offering to serve the public in general. The rationale was that by holding themselves out to the public at large, otherwise private carriers took on a quasi-public character. This character, coupled with the lack of control exercised by shippers or travellers over the safety of their carriage, was seen to justify imposing upon the carrier the status of an insurer. National Ass'n of Regulatory Utility Commissioners v. FCC (NARUC I), 525 F.2d 630, 640 (DC Cir. 1976)

Under common law, common carriers bear the tort obligations: to serve upon reasonable request; without unreasonable discrimination; at just and reasonable rates; and with adequate care. - Barbara Cherry, The Rise of Shadow Common Carriers (Dec. 2012).

By force of common law, and enforced by the courts, common carriers 1) were required to serve upon reasonable demand, any and all who sought out their services and 2) were held to a high standard of care for the property entrusted to them (although they were held to normal standards of negligence for incidental damages beyond that to the carried freight.). --[NY p. 41]

Discrimination

[Call Publishing Co., 181 U.S. at 100 ("all individuals have equal rights both in respect to service and charges.")]

For centuries, common carriage principles have played an important role in the infrastructure services of transportation and communications. They intended to guarantee that no customer seeking service upon reasonable demand, willing and able to pay the established price, however set, would be denied lawful use of the service or would otherwise be discriminated against... The prohibition on unreasonable discrimination is the most important component of the common carrier obligation.15 However, this is not absolute. Courts have recognized that some categorization of users is possible. "[A] specialized carrier whose service is of possible use to only a fraction of the population may nonetheless be a common carrier if he holds himself out to serve indifferently all potential users." -- Eli M. Noam, Beyond Liberalization II: The Impending Doom of Common Carriage, 18 Telecom. Pol'y 435, Sec. II (1994).

The first common carrier case on record in English common law is of a ferryman in 1348. [133] Later cases discuss other common occupations such as innkeepers, [134] marshals, [135] and surgeons. [Y.B. 9 Ed. IV. 32 pl. 4.] These were common or public occupations at common law with an obligation to serve all at reasonable rates. 'If a man takes upon him a public employment, he is bound to serve the public as far as the employment extends; and for refusal an action lies, as against a farrier refusing to shoe a horse . . . Against an innkeeper refusing a guest when he has room . . . Against a carrier refusing to carry 646, 654 (1701), per C. J. Holt. In effect, this not being full.' Lane v. Cotton, 1 Ld.Raym. 646, 654 (1701), per C. J. Holt. In effect, this early law of common or public callings was a forerunner of later government regulation of business, and these common callings were the first 'public service companies.' --[FCC 1981]

Common callings received greater definition in English common law courts and in parliamentary enactments. Consistent throughout was the primary duty of non-discriminatory service. By 1814, with the blooming of the industrial revolution and the expanding commercial class, common callings were generally limited to those few businesses which are today still considered common, i.e., carriers and inn keepers. --[NY p. 41]

Differentiation

Call Publishing Co., 181 U.S. at 100 ("such equality of right does not prevent differences in the modes and kinds of service and different charges based thereon. There is no cast iron line of uniformity which prevents a charge from being above or below a particular sum, or requires that the service shall be exactly along the same lines.")

Ownership

I.C.C. v. Delaware, L. & W. R.R. Co., 220 U.S. 235, 252 (1911) (“The contention that a carrier, when goods are tendered to [it] for transportation, can make the mere ownership of the goods the test of the duty to carry, or, what is equivalent, may discriminate in fixing the charge for carriage, not upon any difference inhering in the goods or in the cost of the service rendered in transporting them, but upon the mere circumstance that the shipper is or is not the real owner of the goods, is so in conflict with the obvious and elementary duty resting upon a carrier, and so destructive of the rights of shippers, as to demonstrate the unsoundness of the proposition by its mere statement.”)

Regulatory Policies Concerning Resale and Shared Use of Common Carrier Services and Facilities, Report and Order, 60 F.C.C.2d 261, ¶ 41 (1976) (“[W]e do not believe that carriers can deny service to resale entities merely because the latter offer competition to the carriers.”)

Am. Trucking Associations, Inc. v. Atchison, T. & S. F. Ry. Co., 387 U.S. 397 (1967) (rejecting contention that competition between the freight forwarder and the railroad justified the latter’s discrimination against the former).

Commercially Reasonable

Cellco Partnership v. FCC, 700 F.3d 534 (D.C. Cir. 2012) ("we concluded that the data roaming rule imposed no per se common carriage requirements because it left “substantial room for individualized bargaining and discrimination in terms.” Cellco, 700 F.3d at 548. The rule “expressly permit[ted] providers to adapt roaming agreements to ‘individualized circumstances without having to hold themselves out to serve all comers indiscriminately on the same or standardized terms.’” Id. That said, we cautioned that were the Commission to apply the “commercially reasonable” standard in a restrictive manner, essentially elevating it to the traditional common carrier “just and reasonable” standard, see 47 U.S.C. § 201(b), the rule might impose obligations that amounted to common carriage per se, a claim that could be brought in an “as applied” challenge. Cellco, 700 F.3d at 548– 49.")

Reasonable Network Management

Refusal to serve

The duty to carry does not mean that a carrier is never justified in refusing to provide service. It is well established that "if goods are not of the character that the carrier transports he may refuse carriage." Gorton, Supra at 109. Yet, the reasons for refusal are very limited and related to potential damage to other's goods, or to unreasonably high risks for the carrier in its capacity as insurer, or are belong the reasonable capacity restraints of the carrier.

For example, in Leighton v NY Tel., plaintiff, desiring and denied telephone service due to a wartime lack of telephone sets, demanded that extension phones be withdrawn from service in order to provide service to new customers, and provide them adequate service. While recognizing a statutory and common law obligation to serve, the court found the limitation on service justified due to the impracticality of the carrier determining where it could fairly remove installed facilities from existing customers for the benefit of new customers. --[NY p. 58]

The Electronic Communications Privacy Act prohibits wiretapping of customers service, except where incident to the rendition of service or in order to protect the service provider's network or property. Similarly, the FCC's 2010 Open Internet Rules prohibited discrimination except for reasonable network management.

"this allowance “merely preserves a common carrier’s traditional right to ‘turn[] away [business] either because it is not of the type normally accepted or because the carrier’s capacity has been exhausted.’” Verizon’s Br. 20 (quoting NARUC I, 525 F.2d at 641). Railroads have no obligation to allow passengers to carry bombs on board, nor need they permit passengers to stand in the aisles if all seats are taken. It is for this reason that the Communications Act bars common carriers from engaging in “unjust or unreasonable discrimination,” not all discrimination. 47 U.S.C. § 202 (emphasis added)." - Verizon v. FCC, Slip at 58 (D.C. Cir. 2014)

Refusal to Carry:: Illegal Purpose

Common carriers have an obligation to provide service to any and all comers, except where service is clearly being used for illegal purposes. Movietime Inc v. NY Telephone Co., 277 App Div 1057, 101 NY Supp.2d 71 (2d Dept 1950). However, these grounds are very limited. In Nadel v NY Tel., 170 NYS2d 95 (1957) petitioner's phone service was disconnected because of the carrier's suspicion that the telephone would be used for illegal gambling transactions. The court directed that service be reinstated, finding that the telephone company "is not at all qualified, in the absence of evidence of illegal use, to withhold from the petitioner, at will an essential and public utility." 170 NYS2d at 98.

And in a similar case, Shillitani v. Valentine, 53 NYS 2d 127 (1945), the court stated that absent illegal use, "a telephone company may not refuse to furnish service and facilities because of a mere suspicion or mere belief that they may be or are being used for an illegitimate end; more is required." 53 NYS at 131. The court went on to quote approvingly of a California case (People v. Brophy, 49 Cal.App.2d 15, at 33, 120 P2d 946, at 965) where the police exercised veto power over telephone installations. The California court, found the arrangement unenforceable and stated, "public utilities and common carriers are not the censors of public or private morals, nor are they authorized or required to investigate or regulate the public or private conduct of those who seek service at their hands." --[NY p. 58]

Interconnection

Duty Individuals with Disabilities

"A common carrier has a duty to provide a reasonable level of care to a passenger with a disability." MPJI MD-CLE 8-241 The Maryland Institute for Continuing Professional Education of Lawyers, Inc. May 2002, Maryland Civil Pattern Jury Instructions, 4th Edition, Chapter 8. § 8:4

Benefits

Franchise authority; eminent domain

Antitrust

See AT&T Antitrust

In return for reduced discretion, a carrier obtained certain benefits, including limited liability for the consequences of its own actions. Some types of common carriers have been given, by statute, powers of eminent domain, use of public rights-of-way, and protection against competition. -- Eli M. Noam, Beyond Liberalization II: The Impending Doom of Common Carriage, 18 Telecom. Pol'y 435, Sec. II (1994).

The Shipping Act of 1916 was enacted, in large measure, to provide the liner shipping industry operating in the foreign commerce of the United States with a measure of immunity from antitrust laws. -- Daniel Eldredge, Classifying Cruise Ships as Common Carriers under the Shipping Act, a Jurisdictional Struggle: American Association of Cruse Passengers v. Carnival Cruise Lines, 15 Tul Mar. L.J. 397, 399 (1991).

Right of Way

Post Roads Act of 1866: Congress extended Constitutional authority over post offices and post roads to telegraph service, permitting telegraph service to overbuild their network on top of post roads. Note however that at that time there were no common carrier obligations imposed.

In return for reduced discretion, a carrier obtained certain benefits, including limited liability for the consequences of its own actions. Some types of common carriers have been given, by statute, powers of eminent domain, use of public rights-of-way, and protection against competition. -- Eli M. Noam, Beyond Liberalization II: The Impending Doom of Common Carriage, 18 Telecom. Pol'y 435, Sec. II (1994).

See Jones, Common Carriers being granted access to ROW and right of eminent domain

Rights to

• Interconnection
• Access to numbering resource
• Pole attachments
• Access to CPNI

Arbitrage

“If a ferry is erected on a river, so near another ancient ferry as to draw away its custom, it is a nuisance to the owner of the old one. For where there is a ferry by prescription, the owner is bound to keep it always in repair and readiness for the ease of all the king’s subjects; otherwise he may be grievously amerced; it would be therefore extremely hard if a new ferry were suffered to share his profits, which does not also share his burthen.” 3 Blackstone, Commentaries *219