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

[michael gurstein]

Excellent point Norbert, thanks.

 

I'm wondering whether some sort of universal service obligation (and universal service funds/funding) might also fall within your category of "slow change"?

 

Perhaps as well it might be useful to quote directly the other items that Feld pointed to as being ones where some sort of regulatory response (or at least where some decision concerning an apapropriate response) might still be required…

 

    Copper is built to 99.999% reliability, the “five 9s” of a public utility. Wireless and IP-based networks do not come anywhere close to that. In the aftermath of Hurricane Sandy, New Yorkers without power for IP-based services or cell service went combing their neighborhoods for payphones – which continued to operate because they connect through independently powered copper networks. What happens in 22 states when that older, more expensive but more reliable technology is replaced with better, faster but more fragile technology? 

 

   What happens to the Universal Service Fund? The current AT&T telephone network provides a significant portion of the existing contribution to the fund because only traditional telephone networks are (at the moment) required to pay into the fund. DSL and other IP-based networks do not pay into the fund.

 

For years, contribution to the Fund has been eroding. AT&T’s proposed rapid transition of its entire network will dramatically accelerate this trend. Many states have separate state-based USF funds. AT&T territories, this will be even more impacted.

 

    A host of policies remain confined to the telephone world and not the IP-space. These include pro-consumer policies on privacy and billing, and pro-competitive policies such as special access and unbundled network elements (UNEs). To the extent these policies apply at all to IP-based networks, they do so as “ancillary” to existing telephone networks. Even access to phone numbers is technically limited by statute to “telecommunications providers,” and is assigned to IP-based networks by regulatory fiat. What happens to these policies when the telephone network that supports these policies disappears? What protections will consumers or competitors continue to enjoy with regard to things like privacy, truth-in-billing, and signal quality?

 

    Most importantly, the FCC must decide the question of whether IP networks must interconnect with one another. Right now, they do not. And every now and then we have a “peering dispute” where networks refuse to exchange traffic because they cannot agree on terms. What happens if AT&T and Comcast cannot agree on terms, and several million AT&T Wireless subscribers can no longer call home? If this seems unlikely to happen, I remind folks that no one ever imagined that cable systems or DBS providers might go for weeks or even months without local broadcast channels because of “retrans fights.” However, when DISH subscribers must make do without AMC or when Cablevision subscribers can’t watch Food Network, it’s merely annoying. When people with Comcast phone service can’t call AT&T or AT&T wireless subscribers, the impact – for the economy, for public safety, and for the individuals involved – is a hell of a lot more significant than missing “Mad Men” or “Chopped.”

 

    How will AT&T’s investment impact the digital divide and problems of digital adoption, particularly in minority communities? There is no question that, handled correctly, this massive investment in infrastructure could prove a tremendous boon to communities that have until now been in danger of marginalization. At the same time, we must also recognize the danger that a poorly handled transition to all-IP networks could cement the status quo, or even worsen existing digital inequities.

 

M

 

-----Original Message-----
From: Norbert Bollow [mailto:nb at bollow.ch] 
Sent: Thursday, November 15, 2012 11:45 AM
To: governance at lists.igcaucus.org; michael gurstein
Subject: Re: [governance] [Dewayne-Net] Shutting Down The Phone System Gets Real: The Regulatory Implications of AT&T Upgrading To An All IP Network

 

Michael Gurstein < <mailto:gurstein at gmail.com> gurstein at gmail.com> wrote:

 

> 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-in> http://gurstein.wordpress.com/2012/10/11/the-ituwcit-thinking-about-in

> ternet -regulatory-policy-from-an-ldc-perspective/

> 

> (and please could we discuss this at the level of theory/principle 

> while avoiding US "exceptionalism"...

 

I would suggest that the main difference is that the classical telephony network has a single, well-understood main purpose which is not changing over time. This makes it possible to have meaningful regulation that ties directly into this purpose.

 

By contrast, the Internet is designed to be useful quite generally without tying it to any particular intended main purpose. As a consequence, the Internet enables rapid innovation of new ways in which it can be used. This fast evolution is a significant difference in regard to practical feasibility of regulation. As a matter of principle, it is not possible to effectively address by means of regulation aspects can that change more quickly than the time that it takes to change the regulations, except of course if people are willing to accept regulation that significantly slows down the pace of innovation.

 

There are still issues that are sufficiently fundamental and therefore slow-changing that effective regulation is possible and in fact highly desirable. For example, I'm all in favor of a strong network neutrality principle which says that a company in the business of transmitting Internet protocol datagrams may define its price structure only in terms of properties of the service of transmitting these datagrams. (This allows to distinguish between a basic "best effort"

service and a more expensive service with stronger QoS guarantees, but disallows the various "profit maximization at the expense of the integrity of the Internet" schemes.) 

 

Greetings,

Norbert

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