USTA Convention Notebook...

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The final UNE rules the FCC plans to vote on in Dec. “won’t be a Christmas tree” with unrelated issues added to the order, Christopher Libertelli, aide to FCC Chmn. Powell, pledged at a panel Mon. at the convention. He said the agency will resist the temptation to add “issues that are not central” to the UNE remand order. He said one of his regrets about the Triennial Review Order that was remanded by the court earlier this year is that “we didn’t stick close enough to the experts” in the Wireline Bureau in writing it. Asked by panel moderator Mike Senkowski, a Washington attorney, to talk about the good and bad news about the current situation, FCC Gen. Counsel John Rogovin said “the bad news is the continued lack of stability” for the telecom industry, but the good news is “the lack of collegiality last time around need not repeat itself.” SBC Senior Vp Dorothy Attwood said Libertelli’s concern that the new order not be a “Christmas tree” was good news because “that was not what the court asked for,” the document should be “a simple construct.” ALTS Gen. Counsel Jason Oxman said the bad news is the UNE debate “is being framed as ILEC versus CLEC.” Facilities-based CLECs got lost in the last debate and it’s still “a challenge to get the FCC to pay attention” to these companies’ concerns, he said.

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BellSouth Vp Robert Blau leveled strong criticism at the Intercarrier Compensation Forum’s (ICF) plan to unify carrier payments on a panel here Sun., warning that parts of it would require a “legislative fix” but probably wouldn’t fare well on the Hill because “there is not a consensus.” Not so, said William Kreutz, regulatory strategy dir. for Valor Telecom, a member of the ICF who spoke on the same panel. Kreutz said it’s true that ICF members dropped from about 25 to 9, but those that didn’t sign off still are 80-90% comfortable with what came out of the 15-month ICF effort. “I think you're being optimistic,” Blau responded. Blau and others in Washington have questioned whether the FCC could preempt state regulators on intrastate access charges, which would be needed to complete the ICF plan’s unification of carrier charges. Blau, who sat in on the ICF before BellSouth dropped out, said the real solution may be “more deregulation that the ICF contemplated.” One of the ICF’s problems is “it’s a voice circuit-switched centric solution that doesn’t speak to fiber to the home,” Blau said. Blau said he agreed with AT&T Vp Joel Lubin, another panelist and strong ICF supporter, that the variety of current intercarrier compensation schemes were invitations to arbitrage, but he questioned “whether the solution is to require a regulated regime, which is what the ICF is.” Moving toward bill-&-keep, an ICF goal, is still a regulated regime,” Blau said. The model ought to be the unregulated Internet backbone, he said. “My concern is we may go down this path and find it’s not working” and not be able to step back in time, he said. Nuvox Senior Vp Jake Jennings said his company didn’t participate in the ICF negotiations because it felt there were too many political issues to overcome in order to gain approval for a unified carrier plan. “It’s one thing to conceive of a plan and other to execute it,” he said. However, Jennings didn’t buy Blau’s recommendation for Internet-style deregulation either. In the Internet world, there are “multiple platforms” to provide competition as a safeguard, he said. In the current telecom world ILECs like BellSouth retain market power, he said. Lubin said “there does not have to be a law change to get this done and I don’t think deregulation will help rural America.” The ICF worked hard to protect rural telco interests and even though some rural companies left, the compromises they forged as members remained, Lubin said. “When I hear Bob [Blau] talk about deregulation I don’t get it.” Lubin said during the 15 months of ICF talks, members sometimes got tired of the time-consuming process but when they went back to their companies and witnessed the continued disputes over carrier payments, they returned to the table in hopes of making the process better, he said. If politicians and regulators don’t have “the will to make the sea change,” then they have to tell the industry “if not this, if not now, then what and when,” Lubin said. -- EH

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It might make sense to have a separate universal service regime to encourage the buildout of broadband, but there would be litigation risk without congressional action, Matthew Brill, aide to FCC Comr. Abernathy, told the USTA conference Sun. The Telecom Act’s Sec. 254 doesn’t target broadband services for universal service support, he said. Sec. 706 of the Telecom Act encourages advanced services such as broadband, but if the FCC initiated a universal service regime under that section, the courts might view the action as setting up a “parallel universal service regime,” he said. A court could say the authority is in Sec. 254, so a parallel regime under Sec. 706 would create risk and uncertainty, Brill said. “We need to think not about universal service but universal access to networks,” said MCI Vp Richard Whitt: “We need to build out broadband platforms,” he said: “We need a separate fund to support broadband providers.” Trying to give Skye a universal service bill is probably impossible, so rather than concentrate on universal service, “the real issue is building actual networks,” he said. The industry needs to be more creative about how to support broadband, a task that perhaps could be dealt with in the Telecom Act rewrite, he said. Ken Pfister, vp of rural telco Great Plains Communications, said he agreed: “USF in an IP world needs to look entirely different.” Mont. PSC Chmn. Bob Rowe said regulators “have to figure out how to support networks” and not concentrate just on services because without a network there can be no services. The problem is the Telecom Act talks about supporting services not networks, said Brill: “It’s almost backward.” However, “any major shift in universal service will probably need Congress” to act, Brill said. On another universal service topic, Mont. PSC Chmn. Bob Rowe asked whether providing universal service support to wireless companies based on their own costs, rather than on the costs of the incumbent rural telco, might be worth considering. Of all the carriers receiving some sort of universal service support, “wireless is the only one with no cost model, he said. Western Wireless Vp Gene DeJordy said it would be “misguided” and wireless carriers might have higher costs, depending on how you measure it. At the very least, it would “be difficult from a practical standpoint” because it’s hard to measure those costs, Brill said. Pfister of Great Plains said a separate universal service fund for wireless makes sense. It would be better than “being at each others’ throats,” he said. Wireless carriers often are cited as responsible for the growth in the universal service fund, but payments to all segments have increased over the past 3 years, DeJordy said. The overall fund has increased $1.8 billion, with rural ILECs responsible for $650 million of the increase, the Schools & Libraries Fund growing by $780 million, Lifeline growing $180 million and competitive carriers such as rural wireless companies getting $225 million more, he said. Nonetheless, Brill said, a recent study showed “astronomical” growth in competitive carriers: “The amount of support appears to be doubling every 6 months or so.”

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Having 50 separate state regulatory regimes isn’t a bad thing, Mich. PSC Comr. Robert Nelson said, speaking Mon. on a panel about VoIP regulation at the conference. State regulators are closer to the customer and offer a place for regulatory experiments that can benefit consumers, he said. Asked by the moderator, ex-NTIA Dir. Nancy Victory, if states might find common ground on VoIP issues if there’s no preemption by the FCC, Nelson said probably, but for now many states are waiting to see what the FCC does before installing permanent VoIP rules. Nelson said there’s not as much urgency to get regulatory certainty on VoIP as some think because there still are investment dollars waiting for VoIP companies. However, pulver.com Gen. Counsel Jonathan Askin said “we are chomping at the bit, we have products ready to release and are terrified to release them because we don’t know what the regulatory environment will be.” Motorola Senior Dir. Jeannine Poltronieri said “a lot is in flux” and the delay could be difficult for small players. The panel spoke in a meeting room so crowded that dozens of chairs were brought in for the overflow and some attendees still stood in the doorways or sat on the floor. Asked whether the FCC would welcome legislation, Jessica Rosenworcel, aide to FCC Comr. Copps, said “refreshing” the act is a good idea because “we are struggling in a digital age with an analog act.” She said the FCC could be more “proactive on this.” As the expert agency, the FCC “has access to a lot of facts we could be sharing with the Congress, making a slate of options,” she said: “I think this would be a productive thing for us to do and make it more likely legislation will pass.” Asked if social goals such as E- 911 availability or law enforcement access could be voluntary, Nelson warned that “agreements voluntarily reached can be voluntarily withdrawn.” Askin said “most social goals are solved by market pressure” rather than regulation.

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Backup power is a “big issue” for telcos as they move to fiber and VoIP, particularly in the wake of this year’s major storms, said BellSouth Vp Richard Burns. Even though most customers “don’t think about” power issues when they purchase new technologies, BellSouth does have power issue “exposure” in the loop now, he said: “We've been looking at power for a while now,” including switching to solar power. Right now, BellSouth is “not finding a good solution,” Burns said. He said the RBOC also considers privacy and security issues in an IP world “very important… We don’t want to put the BellSouth name on anything that’s not secure enough.” But he said BellSouth believes that with encryption IP networks are “roughly as safe” as landlines, which “aren’t impenetrable either.” -- MF

The evolution of home networks is “probably more important than VoIP itself,” said BellSouth Vp Richard Burns. He said “someone” has to administer home networks, and the RBOC -- with its trained personnel, back office and rolling trucks -- sees itself in a good position to provide that service, probably on a subscription basis: “This is a real value proposition.” Burns said BellSouth hasn’t been able to make VoIP work on a home network as well as it wants, but “I think we are close.” Making the home network work for VoIP also is important to BellSouth’s brand image, he said: “The name BellSouth brings a whole new set of expectations to VoIP. Things that are acceptable for Vonage and others are not acceptable from BellSouth.”

MPhase announced the release of the 3rd generation of its TV+ System for offering IP video and data services via both copper and fiber-to-the-home networks. It includes independence of the type of transport media used, as well as an improved maintenance environment, mPhase said.

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WiMax “probably won’t replace” DSL or cable modems in urban or suburban markets soon, said TMNG Vp Susan Simmons during a panel sponsored by TMNG and Bear Stearns. She cited competition and capital spending requirements of $2,139 per square mile served and competition. But she said WiMax would be more competitive in rural markets. Long term, mobile services may be the “best opportunity” for WiMax, Simmons said. Most speakers said the big emphasis would be on licensed spectrum for WiMax because that would free it from interference and attract investors. They also said firms were moving carefully on WiMax because of hard lessons learned about new technologies during the 1990s. Bear Stearns’ Rich Nespola said regulators had a “high level of interest” in WiMax: “It will be supported from the public policy perspective.”

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Comcast has averaged 23 monthly video on demand (VoD) purchases per customer in its Philadelphia market test, said Vp Tom Nagel during a J.D. Powers panel at the USTA convention here. He said Comcast was achieving 15.7% high-speed Internet access penetration rate. One concern is the lack of a wireless product, Nagel said: “Obviously we're evaluating the need for wireless in the bundle, but we may not need a perfect bundle today. The ILECs have to make a strategic decision whether to compete with us on video, and we have to do the same on wireless.”

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The convergence of wireline, PCS, cellular and WiFi networks is “necessary if carriers are going to be able to deliver a seamless stream of communications,” said Susan Miller, pres. of the Alliance for Telecom Industry Solutions (ATIS), announcing the group’s work plan for new mobile wireless industry standards. Most senior telecom executives have endorsed the plan, ATIS said. ATIS said it had been working on the plan more than a year, including assessing existing protocols and standards and identifying areas where more work is needed.