By Paul Barbagallo
The telecommunications industry is sharply divided on whether the Federal
Communications Commission should regulate the high-capacity protocol-based
fiber-optic networks of tomorrow the same way it has the copper-based public
switched telephone network, with large incumbent players, like AT&T Inc. and
Verizon Communications Inc., opposing new FCC regulations and smaller rivals
In lengthy comments filed with the FCC Jan. 28, views varied on the role the
commission should play as phone companies continue building all-internet
protocol (IP) networks capable of offering consumers internet phone service, as
well as digital video and high-capacity internet access services.
The commenters, a diverse cross-section of the industry, specifically
addressed two petitions filed last November, one by AT&T and the other by
the National Telecommunications Cooperative Association (NTCA), a group that
represents rural providers.
In short, the AT&T petition calls on the FCC to establish test zones
where regulations left over from the Ma Bell era should no longer apply.
According to the company, the rules underpinning the old monopoly telephone
network should expire with an industry-wide transition to IP, and the FCC should
declare that these new networks are “subject to minimal regulation only at the
The National Telecommunications Cooperative Association petition requests an
agency rulemaking to “examine means of promoting and sustaining the ongoing
evolution of the public switched telephone network…to an IP-based infrastructure
through targeted regulatory relief and the establishment of tailored near-term
economic incentives.” Such incentives should include allowing phone companies to
recover the costs of carrying IP traffic on their networks and providing
“sufficient and predictable” universal service support for providing
“standalone” broadband internet service to rural America, the NTCA said.
“It is critical that the commission not permit legacy regulatory
obligations--designed for a far different communications landscape--to further
delay that transition,” AT&T wrote in its comments Jan. 28. “The commission
should reject proposals to bog down the…IP transition with interminable and
abstract deliberations about the appropriate regulatory end-state at the
conclusion of the transition. Instead, the commission should promptly begin the
limited regulatory trials proposed in AT&T's petition and use the real-world
data generated by those trials to inform the commission's approach to broader
Currently, the FCC regulates telecommunications providers under Title II of
the Communications Act, wireless carriers under Title III of the act, and cable
operators under Title VI, even though the distinctions between these companies
have blurred as telecom providers now offer video service, cable operators now
offer voice service, and wireless carriers offer both voice and data service. Of
the three provider “types,” the telecom providers--successors to the Bell
monopoly that was broken up by court order in the 1980s, including today's
AT&T and the local-phone units of Verizon Communications Inc.--are required
under state law to offer service to every residence. They must meet standards
for providing a quick dial tone, a sure connection, and resiliency during storms
and power outages. Newer competitors offering phone service over fiber-optic or
internet connections, including Comcast Corp., do not have to abide by the same
AT&T and Verizon also still must maintain their copper phone lines,
whether they upgraded to fiber optics or not, which the two companies say skews
the playing field.
Among the pressing questions for the FCC is whether the old rules governing
the interconnection of telecommunications networks should now carry forward in
an all-IP world.
AT&T said any regulation of interconnection between two providers of
IP-based services would be “needless and harmful.”
“Unregulated commercial arrangements between IP networks are nothing new;
they have long ensured efficient 'IP interconnection' and led to the
phenomenally successful modern internet,” the company wrote. “There is no reason
to expect a different result once all voice communications ride over converged
In addition, AT&T said, the commission lacks authority under Title II of
the Communications Act to regulate interconnection between two providers of
IP-based “information services,” as retail voice-over-internet protocol (VoIP)
services providers and internet service providers are now classified. Section
251(a) of the act requires every “telecommunications carrier” to interconnect
directly or indirectly with “other telecommunications carriers.” AT&T argued
that providers of VoIP and other IP-enabled services are not telecommunications
carriers. As such, Section 251(a) is therefore doubly inapplicable where both
the calling and the called parties are communicating via VoIP or similar IP
services, it said. Similarly, Section 251(c) does not apply to IP-to-IP
interconnection because, among other things, information service providers have
no interconnection rights under Subsection (c)(2), it added.
As for other provisions in the Communications Act, Section 201 “cannot plug a
jurisdictional hole” because it is restricted to relations between providers of
Title II “common carrier” services, AT&T explained.
COMPTEL, a Washington-based trade organization for smaller telephone
companies that compete with AT&T and Verizon Communications, disagreed.
In its comments, COMPTEL pointed out that incumbent local exchange carriers
have a duty to negotiate interconnection agreements in “good faith,” regardless
of whether the networks interconnecting are copper-based or IP-based.
“As the commission explained [in its ICC Transformation Order, adopted
October 2011], the 'duty to negotiate in good faith has been a longstanding
element of interconnection requirements under the Communications Act and does
not depend upon the network technology underlying the interconnection, whether
TDM [time-division multiplexing], IP or otherwise,” COMPTEL wrote.
“The most important step the commission can take to promote the transition to
an all-IP PSTN [public switched telephone network] is to confirm that IP
interconnection is subject to Sections 251 and 252 of the Act,” the organization
said. “This confirmation alone would give competitors a framework to negotiate
fair terms for interconnection with incumbent local exchange carriers, thereby
accelerating the transition to an all-IP network. Interconnection agreements
were a foundational stepping stone for competition from the beginning, and a
change in technology does not change the need for them.”
At the very least, COMPTEL said, the commission should require incumbents
like AT&T and Verizon to enter into IP interconnection agreements with each
impacted competitor, which are compliant with Sections 251(c) and 252, publicly
filed, and available for opt-in--before being allowed to shut down its copper
network, “even for a test.”
The Competitive Carriers Association (CCA), which represents small wireless
carriers, agreed, saying the FCC must reaffirm incumbents' obligation to
interconnect their networks and exchange traffic on “just, reasonable, and
cost-based terms and conditions.”
“Ensuring a seamless transition…to IP-based networks is an important priority
for our national telecommunications infrastructure, but the commission shouldn't
reinvent the world of telecom,” Steven Berry, CCA president and CEO, said in a
news release Jan. 29. “The certainty provided by provisions such as the
interconnection requirements of Sections 251 and 252 of the [Communications] Act
facilitate investment and growth in the wireless marketplace.”
Deregulation is appropriate, Berry continued, when there is an overarching
regulatory framework providing carriers certainty to invest and deploy
“AT&T provides a sensible approach with respect to some outdated
regulations,” he said. “But it makes no sense for the commission to eviscerate
the long-standing interconnection policy and framework. In fact, compelling
interconnection as the fundamental prerequisite fostered a competitive market,
allowing operators to enjoy 'light' regulatory treatment.”
Weighing in on the matter, the Independent Telephone and Telecommunications
Alliance (ITTA), which represents mid-sized phone companies such as CenturyLink
and FairPoint Communications Inc., said any IP-based interconnection obligations
should be limited to situations where IP networks already have been
There should be no obligation for providers to interconnect on an IP basis if
it means deploying new technology to replace existing equipment or facilities,
the organization told the FCC in comments Jan. 28.
“The transition to IP networks is happening nationwide in an organic fashion
as incumbent local exchange carriers upgrade their legacy equipment,” the
alliance wrote. “Yet even so, the IP transition will require incumbents to
invest billions of dollars, which cannot be done overnight. It is settled law
that the FCC can require access 'only to an incumbent LEC's [local exchange
carrier's] existing network--not to a yet unbuilt superior one.' ”
More broadly speaking, the ITTA said the commission should rely on industry
guidelines to govern IP-to-IP interconnection obligations, while preserving the
option for providers to pursue resolution of controversial matters through the
FCC enforcement processes.
“Given that the…IP transition is an ongoing and evolving process, it makes
sense for the commission to take a light regulatory approach and allow IP
interconnection rules to develop over time as the marketplace and networks
evolve,” the alliance said.
As for the cable operators' views, the National Cable and Telecommunications
Association (NCTA) offered support for the AT&T proposals to begin phasing
out legacy network equipment, but said FCC oversight will be essential to ensure
“This technological transformation generally should not trigger any need for
new retail regulation,” said NCTA, whose members provide phone service to more
than 26 million households in the country, the vast majority of which through
The association noted that the FCC already has extended many of the key
elements of the Title II regime to VoIP providers, including “911,” outage
reporting, local number portability, privacy, and disabilities access.
“These decisions ensure that consumers that switch to VoIP services--whether
provided by incumbents or competitive providers--are provided with the same
protections as consumers of traditional phone services,” the association
But, to public interest organizations, the transition to IP is an important
consumer issue, first and foremost, which the FCC should not take lightly.
In comments, Free Press lashed out at AT&T for trying to push the
commission into a “state of veritable regulatory limbo.”
“Because AT&T has previously convinced the commission that the mere use
of IP places a service outside of the laws governing two-way communications
networks, the otherwise unremarkable progression of telecom technology from
circuit to packet switching could now, under the commission's current framework,
result in a state of total deregulation,” Free Press wrote.
Public Knowledge likewise raised caution flags, outlining “five fundamentals”
of the current telephone system that the FCC should uphold throughout a
transition to IP.
First, the commission must ensure that the benefits of internet technologies
flow to all Americans--regardless of race, color, religion, national origin, or
Second, competing networks must continue to accept each other's traffic and
terminate each other's calls in a manner that “both preserves call quality
throughout the country and actively promotes a robust and competitive
Third, the commission must ensure that consumers are protected by resolving
their complaints--both throughout and after the IP transition.
Fourth, the FCC and industry must provide some surety that, even in a natural
disaster, consumers will be able to make phone calls and stay connected.
And fifth, consumers should be able to call 911 in any emergency with
confidence that the call will be connected.
“We stand at the current crossroads not because the commission lacks
authority to act, but because the commission refuses to act,” Public Knowledge
wrote in its comments. “AT&T is absolutely right to demand certainty as it
embarks on a multi-billion dollar upgrade of its systems. This lack of certainty
comes because the commission has failed to resolve the numerous proceedings
pending before it that would answer the fundamental questions of the IP
transition. In particular, the FCC's stubborn refusal to classify [VoIP], or at
least facilities-based 'interconnected' VoIP, as a Title II telecommunications
service has created a confusing hodge-podge of asymmetric responsibilities of
dubious enforceability. The treatment of identical services turns too often on
irrelevant differences in technology or provider. This invites arbitrage and
confusion, privileges some providers while disadvantaging others, and leaves
consumers vulnerable to abusive billing practices and shoddy service. Whatever
virtue existed in delaying critical decisions to another day has clearly ended.
The IP transition is no longer a hypothetical matter taking place in the distant
future. It is upon us.”
Filings in docket 12-353 can be found at http://apps.fcc.gov/ecfs/comment_search/input?z=qglon.
To view additional stories from Telecommunications Law Resource Center™ register for a free trial now
SIGN UP FOR OUR FREE NEWSLETTERS >>>>