[governance] [Dewayne-Net] Shutting Down The Phone System Gets Real: The Regulatory Implications of AT&T Upgrading To An All IP Network

Thu Nov 15 12:46:29 EST 2012

I'm sure this is naïve of me, but I'm wondering what the difference (at the
level of principle) might be between arguing as below, for regulation (in
support of the public interest) for an IP based network through the FCC and
arguing for regulation of "the Internet" (in support of the public interest)
at the WCIT/the ITU (as per for example
http://gurstein.wordpress.com/2012/10/11/the-ituwcit-thinking-about-internet
-regulatory-policy-from-an-ldc-perspective/

(and please could we discuss this at the level of theory/principle while
avoiding US "exceptionalism"...

M

-----Original Message-----
From: dewayne-net at warpspeed.com [mailto:dewayne-net at warpspeed.com] On Behalf
Of Dewayne Hendricks
Sent: Wednesday, November 14, 2012 2:46 PM
To: Multiple recipients of Dewayne-Net
Subject: [Dewayne-Net] Shutting Down The Phone System Gets Real: The
Implications of AT&T Upgrading To An All IP Network

Shutting Down The Phone System Gets Real: The Implications of AT&T Upgrading
To An All IP Network.
By Harold Feld
November 13, 2012
<http://www.publicknowledge.org/blog/shutting-down-phone-system-gets-real-im
plicat>

I believe AT&Ts announcement last week about its plans to upgrade its
network and replace its rural copper lines with wireless is the single most
important development in telecom since passage of the Telecommunications Act
of 1996. It impacts just about every aspect of wireline and wireless policy.

For those who missed it in the morning-after blur of the election results,
AT&T announced that it will invest an additional $14 billion to upgrade its
wireline and wireless networks, so that it projects investing $22 billion a
year for the next several years in capital expenditures (CAPEX as they say
on The Street). At the end of the three year time frame, AT&T expects to
have converted its existing time division multiplexing (TDM) phone network
entirely to an IP-based network which will seamlessly mix its wireless,
remaining souped-up copper, and fiber (but not fiber-to-the-home). Since all
existing phone regulation governing universal service, consumer protection,
and competition rest entirely on the existing TDM/copper network, AT&T
simultaneously filed a petition with the FCC to begin a dialog on how to
address the regulatory issues raised by this shift and proposing some
entirely deregulated pilot programs to determine what regulations are
really necessary.

Setting aside my skepticism that these pilot programs offer anything of
value, I thank AT&T for beginning with an offer to talk. At the same time,
Im mindful we need to get the key elements of the new framework down over
the next year or two  which is practically nothing given the complexity of
the issues and the number of stakeholders involved. It puts a premium on
communities working quickly to come to internal consensus and on trying to
bring as many allies to the table as possible. Ideally, we would set
universal rules for all IP networks, but this would meet fierce resistance
from existing IP-providers. Nevertheless, AT&T raises a valid point of
concern if the rules for the TDM to IP apply only to it and other Local
Exchange Carriers (LECs) upgrading their networks. The FCC must balance
these concerns about competition and fairness with the broader questions of
what happens when our 100-year-old copper safety net gets replaced by an
essentially unregulated IP-based networks.

Whats At Stake? Everything In Telecom Policy.

To list just the headline questions:

	 What happens to the concept of universal service, particularly in
rural areas? AT&T itself says in its announcement that its new combined 4G
LTE and wireline IP footprint will cover "Ninety-nine percent of existing
customer locations." That loss of 1%, while small in absolute terms,
potentially means many thousands of people losing access to basic phone
service.

	 Even if AT&Ts wireless footprint precisely overlapped its rural
copper footprint, there would still be significant questions about
reliability and price.  Traditional phone service has minimum standards of
quality enforceable at the local level, and in most states a requirement to
offer basic voice service at a regulated price. This combination of a
requirement to serve everyone in the service territory, at a minimum
standard and to offer a basic, affordable voice option is generally thought
of as Carrier of Last Resort (CoLR) regulations. If AT&T transition to
IP-based networks and eliminates its CoLR obligations associated with its
traditional telephone service, what happens? In rural areas, wireless signal
might not have the same quality as existing copper, or it might become
unaffordable for poor subscribers in rural and urban neighborhoods where
low-income families rely on a low-cost basic voice service.

[MG>] (Snipped... Lot's of important stuff on regulatory/deregulatory
telecom/IP issues in the US 
....

Conclusion:

Every stakeholder community needs to carefully consider its position and
come ready for some hard bargaining. The traditional battle lines and
positions need to be carefully reexamined. The world is changing, and it
will make a radical change like this only once. This is not the time to
repeat the rote responses of the past. This is not going to be some
Libertarian nirvana where the regulatory state withers away and we shall
move from each according to his need to each according to his ability to
pay. Neither is traditional regulation going to remain unchanged. Anyone
taking either position is effectively removing him or herself from the real
conversation that must take place.

What we need to do, individually and collectively, is figure out how to take
the values of the 100-year old social contract in telecom that has served us
so well as a nation and decide how to express those values in concrete terms
for the next generation of networks. That wont be easy. But stuff that
matters never is.

Dewayne-Net RSS Feed: <http://www.warpspeed.com/wordpress>

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