“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
"Common carriers bear these obligations merely based on their economic relationship with customers (i.e. status), independent of any requirement or finding of monopoly or market power." - Barbara Cherry, The Rise of Shadow Common Carriers (Dec. 2012).
Allnut v. Inglis, 12 East 527, 538, 104 Eng. Rep. 206, 210-211 (1810) (Lord Ellenborough: “there is no doubt that the general principle is favored both in law and in justice, that every man may fix what price he pleases upon his own property or the use of it but if, for a particular purpose, the public have a right to resort to his premises and make use of them, and he have a monopoly in them for that purpose, if he will take the benefit of that monopoly, he must as an equivalent perform the duty attached to it on reasonable terms.”)
John Thorne, Peter W. Huber, Michael K. Kellogg, Federal Broadband Law 289 (1995) (chapter on common carriage)
P. 289: “The crown would grant a ferry boat (say) an exclusive right to serve some designated territory. In time, the privilege came to be matched by a set of duties.
Network services tend towards concentration.
- Mark A. Lemley & David McGowan, Legal Implications of Network Economic Effects, 86 Calif. L. Rev. 479 (1998).
- CARL SHAPIRO & HAL R. VARIAN,INFORMATION RULES: A STRATEGIC GUIDE TO THE NETWORKED ECONOMY 175–79 (1999);
- OZSHY, THE ECONOMICS OF NETWORK INDUSTRIES
5 (2001)
Generally, the FCC in the Computer Inquiries justifies the Computer Inquiry policy on the market power of common carriers and their ability to use that power to harm the enhanced services market, and the competitive environment of the enhanced services market which did not justify regulation of enhanced services.
The Commission affirmed its Computer I finding that enhanced
services should be unregulated on the grounds that the market was
competitive. [CII Final ¶ 7, 127-132 (“The market is truly
competitive. Experience gained from the competitive evolution of varied market
applications of computer technology offered since the First Computer Inquiry compels us to
conclude that regulation of enhanced services is simply unwarranted.” ¶ 128)] [CCIA p 207] [CPE Order 2001 ¶ 3, 23 (describing
market as truly competitive)] [Access Charge Reform 1996 ¶ 285 (“The Internet access market is also highly competitive and dynamic, with
over 2,000 companies offering Internet access as of mid-1996.”)].
3. In the Computer II Order, the Commission determined
that it would not serve the public interest to subject enhanced service
providers to traditional common carriage regulation under Title II
because, among other things, the enhanced services market was "truly
competitive." 7
7Computer II Order, 77 FCC 2d at
430-33, paras. 119, 124, 128.
-- In re Policy And Rules Concering The Interstate,
Interexchange Marketplace/Implementation Of Section 254(G) Of The
Communications Act Of 1934, As Amended/In 1998 Biennial Review --
Review Of Customer Premises Equipment And Enhanced Services Unbundling
Rules In the Interexchange, Exchange Access and Local Exchange Markets,
CC Docket No. 98-183; CC Docket No. 96-61, Report and Order, ¶ 3 (March
31, 2001)
<www.fcc.gov/Bureaus/Common_Carrier/Orders/2001/fcc01098.doc>.
Because the Commission found that the market for enhanced
services is "truly competitive," [41] it believes that market forces
will protect the public interest in reasonable rates and availability
of services. Therefore, in the Commission's view,
comprehensive regulation of enhanced services would not be
permissible because it would not be "directed at protecting
or promoting a statutory purpose." Computer and
Communications Industry Association v. Federal Communications
Commission, 693 F.2D 198, 207, 224 U.S.APP.D.C. 83 (D.C. Cir. 1982)
Criticism of Monopoly as Criteria
"Finally, the partial dissent disagrees with our conclusion that the Commission had “good reasons” to reclassify because, according to the partial dissent, it failed to make “a finding of market power or at least a consideration of competitive conditions.” Concurring & Dissenting Op. at 10. But nothing in the statute requires the Commission to make such a finding. Under the Act, a service qualifies as a “telecommunications service” as long as it constitutes an “offering of telecommunications for a fee directly to the public.” 47 U.S.C. § 153(53). As explained above, supra at 24, when interpreting this provision in Brand X, the Supreme Court held that classification of broadband turns on consumer perception, see 545 U.S. at 990 (explaining that classification depends on what “the consumer perceives to be the integrated finished product”). Nothing in Brand X suggests that an examination of market power or competition in the market is a prerequisite to classifying broadband. True, as the partial dissent notes, the Supreme Court cited the Commission’s findings regarding the level of competition in the market for cable broadband as further support for the agency’s decision to classify cable broadband as an information service. See id. at 1001 (describing the Commission’s conclusion that market conditions supported taking a deregulatory approach to cable broadband service). But citing the Commission’s economic findings as additional support for its approach is a far cry from requiring the Commission to find market power. The partial dissent also cites several Commission decisions in support of the proposition that the Commission has “for nearly four decades made the presence or prospect of competition the touchstone for refusal to apply Title II.” Concurring & Dissenting Op. at 12. All of those cases, however, predate the 1996 Telecommunications Act, which established the statutory test that Brand X considered and that we apply here." [USTA v. FCC Slip
46 DC Cir. 2016]
Thomas Nachbar, Open Access, TPRC 2006 (rejecting "Market Power" as sole justification or criteria for common carrier status)
Historians debate whether monopoly was instrumental in the development of common carriage. Businesses found to be "public callings" in early English common law were often franchised by the Crown under privileged terms and exercised market power. On the other hand, in many areas there was competition among such public callings as innkeepers, blacksmiths and tailors.
In the United States, much of trucking and airlines are treated as common carriers even though significant competition exists. And at the time the telephone industry was first made subject to regulation at the state and Federal levels, there was some competition for local service. Conversely, most firms with market power are not common carriers. Thus, market power is neither a necessary nor sufficient condition for common carriage.
-- Eli M. Noam, Beyond Liberalization II: The Impending Doom of Common Carriage, 18 Telecomm. Pol'y 435. Sec. III.1. (1994).
The available evidence strongly suggests that monopoly and essentiality were the bases for imposing the duties of common callings. Only a limited number of trades clearly were held to be subject to a public duty to serve. The cases generally repeat the specific instances of smiths, carriers, and innkeepers which in many cases were considered to have an effective monopoly over essential services. [Keilway, 50.4 (1450); Y.B. 39 H.VI. 18'24 (1460); Jackson v. Rogers, 2 Show. 237 (1683); Lane v. Cotton, Ld. Raym. 546 (1701).] Taken as a whole they appear to theorize that these professions were in the nature of public offices. [Lane v. Cotton, Ld. Raym. 546 (1701), Ansell v. Waterhous, 2 Chet.R. 1 (1817).] Indeed, if all the professions had been held to the same duties the courts most likely would have said so, rather than making this analogy to the few offices which were purely public. Many other professions were at one time or another referred to as 'common' in the Year Books and cases, [See Adler, supra, pp. 149-52.] But there are no cases and no convincing evidence that these references meant that the public duty to serve was imposed upon them. The word 'common' was used in many different senses, and often meant 'ordinary' as for a common soldier, or 'habitual' as for a common scold. There is little reason to believe that the various references to common cooks, builders, or bakers implied that those professions bore a legal duty to serve, and surely no cases hold to that effect. Rather, these references seem only to have been to ordinary members of those trades. Thus, it appears that the common law imposed the duty of common or public callings on a case-by-case basis upon certain essential occupations which were effective monopolies. The theory, as expressed in Lane v. Cotton, 1 Ld Rym. 646 (1701) was that these particular occupations exercised a form of public office, analogous to sheriffs and public clerks.-- [FCC 1981]
Facility or infrastructure which is necessary for reaching customers and/or enabling competitors to carry on their business. A facility is essential if its duplication is impossible or extremely difficult due to physical, geographical, legal or economic constraints. Take for example a national electricity power grid used by various electricity producers to reach the final consumers: Since it would not be viable for these producers to build their own distribution network, they depend on access to the existing infrastructure. Denying access to an essential facility may be considered an abuse of a
dominant position by the entity controlling it, in particular where it prevents
competition in a
downstream market. ” -- European Communities : Glossary http://ec.europa.eu/comm/competition/general_info/e_en.html
The available evidence strongly suggests that monopoly and essentiality were the bases for imposing the duties of common callings. Only a limited number of trades clearly were held to be subject to a public duty to serve. The cases generally repeat the specific instances of smiths, carriers, and innkeepers which in many cases were considered to have an effective monopoly over essential services. [Keilway, 50.4 (1450); Y.B. 39 H.VI. 18'24 (1460); Jackson v. Rogers, 2 Show. 237 (1683); Lane v. Cotton, Ld. Raym. 546 (1701).] Taken as a whole they appear to theorize that these professions were in the nature of public offices. [Lane v. Cotton, Ld. Raym. 546 (1701), Ansell v. Waterhous, 2 Chet.R. 1 (1817).] Indeed, if all the professions had been held to the same duties the courts most likely would have said so, rather than making this analogy to the few offices which were purely public. Many other professions were at one time or another referred to as 'common' in the Year Books and cases, [See Adler, supra, pp. 149-52.] But there are no cases and no convincing evidence that these references meant that the public duty to serve was imposed upon them. The word 'common' was used in many different senses, and often meant 'ordinary' as for a common soldier, or 'habitual' as for a common scold. There is little reason to believe that the various references to common cooks, builders, or bakers implied that those professions bore a legal duty to serve, and surely no cases hold to that effect. Rather, these references seem only to have been to ordinary members of those trades. Thus, it appears that the common law imposed the duty of common or public callings on a case-by-case basis upon certain essential occupations which were effective monopolies. The theory, as expressed in Lane v. Cotton, 1 Ld Rym. 646 (1701) was that these particular occupations exercised a form of public office, analogous to sheriffs and public clerks.-- [FCC 1981]
A second theory held by the commentators is that only certain essential occupations were common callings, and that the duty to serve was imposed to protect the public against actual or virtual monopolies in those occupations. Carriers, innkeepers, and smiths, for examples, were trades upon which the traveler depended, and there might well be only one such tradesman in a given medieval English village. 'The traveller would be at the mercy of the innkeeper, who might practice upon him any extortion, for the guest would submit to anything almost, rather than be put out into the night.' Wyman, 'The Law of the Public Callings as a Solution of the Trust Problem,' 17 Harv. L. Rev. 156, 159 (1904). A carrier, too, because of the comparatively small traffic and the dangers of travel to distant towns and villages, would have a virtual monopoly. The duty to serve all at reasonable rates protected against abuse of this monopoly position. As economic conditions changed, moreover, certain occupations ceased to be common callings. For example, smiths, tailors, and surgeons were common callings in the fifteenth century, but by the nineteenth century it appears that the duties of a common calling applied only to carriers and innkeepers. One commentator concludes that the common law principle was 'that in the private calling the situation was that of virtual competition, while in the public calling the situation was that of virtual monopoly.' Wyman op. cit. at 161. [The importance of legislation throughout this period also cannot be underestimated. Parliament at various times imposed wage and price restrictions in times of economic distress. For example, the first Statute of Laborers (1348) imposed limits on wages in order to deal with the drastic shortage of labor caused by the Black Death. Criminal actions brought under these statutes may often have supplanted civil actions to obtain damages for any breach of a similar common law duty.] --[FCC 1981]
John Thorne, Peter W. Huber, Michael K. Kellogg, Federal Broadband Law 289 (1995) (chapter on common carriage)
P: 294: “A second layer of carrier-like responsibility derives from the antitrust law and ‘essential facilities’ doctrine. The landmark case is the Supreme Court’s 1912 decision in United States v. Terminal Railroad Association of St. Louis, 224 U.S. 383 (1912). For many years this doctrine remained a curiosity of antitrust jurisprudence. But antitrust decrees guaranteeing access to ‘bottleneck’ facilities have become central to telecommunications law in recent years.”
Criticism
Common carriers are considered to be private businesses which are "affected with public interest," to use the language of the U.S. Supreme Court's landmark case on regulation. Being essential, they are accorded special treatment.20 But the notion of an "essential" service as a prerequisite to common carriage is often circular. Telephones, for example, started out as a specialized service for a few users; its essentiality is as much the result of its broad use as the other way around. Essentiality is a factor for the establishment of common carriage, but it is neither a necessary nor a sufficient condition. -- Eli M. Noam, Beyond Liberalization II: The Impending Doom of Common Carriage, 18 Telecomm. Pol'y 435. Sec. III.2. (1994).
Cases
- German Alliance Insurance Co v Lewis, 233 US 389(1934) the business of insurance has very definite characteristics, with a reach of influence and consequence beyond and different from that of the ordinary business of the commercial world . . . To the insured, insurance is an asset, a basis of credit. It is practically a necessity to business activity and enterprise. It is, therefore, essentially different from ordinary commercial transactions, and, ... is of the greatest public concern.
