Industry at Odds on FCC Role in PSTN-to-IP Network Transition
AT&T asked the FCC to set a deadline to move telecom from circuit-switched to IP-based networks. The request came in comments this week on an FCC National Broadband Plan public notice that proposed the release of a notice of inquiry (NOI) on the transition. Small rural carriers cautioned the commission not to move too fast. Meanwhile, competitive carriers fought with Verizon over whether interconnection and traffic exchange requirements under Sections 251 and 252 of the Communications Act apply to IP networks. Wireless carriers said the rules should ensure regulatory parity.
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The public switched telephone network (PSTN) and plain-old telephone service (POTS) are “relics of a by-gone era,” said AT&T. “With an outdated product, falling revenues, and rising costs, the POTS business is unsustainable for the long run.” The government won’t achieve universal broadband quickly or efficiently if companies “are forced to continue to invest in and to maintain two networks,” AT&T said. The FCC should set a firm, ambitious deadline, like the one for the DTV transition, to move the industry completely to IP, AT&T said.
The transition “should be managed carefully and gradually,” said the National Telecommunications Cooperative Association. “A transition period will avoid rate shock, prevent service disruptions, and provide stability and certainty during the transition.” The association warned the FCC against any action that might “jeopardize the service that has been successfully deployed today."
USTelecom recommended against assuming that IP technology will “completely replace” the PSTN “anytime soon.” The group said, “Especially in lower-density, higher-cost areas of the country, the reliance on the existing PSTN network will continue to be the most economical wireline network technology for delivering both voice and broadband services to consumers.” A transition “should be neither rushed nor relaxed,” said the Independent Telephone & Telecommunications Alliance.
Several groups said the FCC doesn’t need to release an NOI, because it opened the issue for discussion five years ago in its IP-enabled services proceeding. “The Commission already has a mature, well-developed record in regard to the transition to an all-IP network which is actually ripe for an imminent ruling, or was ripe under the prior Commission administration,” said Qwest. The FCC shouldn’t “tether” decisions on IP-enabled services issues to the national plan, the company said. Level 3 agreed that an NOI isn’t needed. It asked the FCC instead to finish its overhauls of intercarrier compensation and the Universal Service Fund. “Once the economies of the public switched telephone network have been rationalized and implicit subsidies removed, the transition to an all IP-network will gather steam.” If the commission issues an NOI anyway, it should seek to resolve regulatory disparities among industries, because in an IP world, content and voice are just applications that may run on “any number of platforms before reaching the end user,” the company said.
Verizon asked the FCC to “reject proposals to extend legacy interconnection regulations to IP networks.” It said carriers already have interconnection arrangements for handling circuit-switched and IP traffic. Industry standards for exchanging VoIP traffic don’t exist, Verizon said. “The efficient way to allow these standards to develop would be to follow the tremendously successful example of the Internet, which relies upon voluntarily negotiated commercial agreements developed over time and fueled by providers’ strong incentives to interconnect their networks."
The CLECs replied, “The Internet did not have as its starting point a market dominated by incumbent local exchange carriers that are the product of decades of statutorily-protected monopolies.” ILECs have more than 80 percent of the local market, and the rest is divided among several competitors, they said. “The mere fact that an incumbent has changed its network architecture from a circuit-based to IP-format does not change its market position, and the important interconnection and non-discrimination protections of the Act do not disappear just because Verizon says they should."
Rural carriers and VoIP providers skirmished over intercarrier compensation. NTCA urged the FCC to require interconnected VoIP to pay access charges during the transition. “AT&T, Verizon, Qwest and other IXCs and wireless carriers will eventually take advantage of this loophole in the rules in the near future to classify all of their voice traffic as interconnected VoIP and refuse to pay access charges,” the association said. But the VON Coalition said applying access fees to VoIP would be “moving backward.” It sought a bill-and-keep system for all traffic, under which carriers recover costs from end users rather than from connecting carriers.
The National Association of State Utility Consumer Advocates said the FCC should release an NOI seeking further comment on many of the issues raised in the public notice. “While the Internet has wrought great and wonderful new services, from a technological and functional perspective, the distinction between Plain Old Telephone Service and the VoIP service offered by carriers such as AT&T (including but not limited to U-Verse), Verizon (FiOS), Comcast, Cox and Time Warner is practically non-existent,” NASUCA said. The group said that “there are reasons to conclude that many VoIP services and broadband services are, in fact, ’telecommunications services’ within the template and definitions of the 1996 Telecommunications Act,” and telecom regulation should apply.