Regulation, Economy Said Need to be Addressed in Voice Transition

Traffic on PSTNs might be declining, but the economy based on PSTN is critical and regulation built upon traditional phone networks has guaranteed high-quality voice service, said Free Conference Call CEO Dave Erickson. Regulators need to make sure they don’t destroy service for the sake of technological revolution, he said. VoIP migration may be happening, but those services can’t function without the PSTN because they don’t interconnect, he said. “VoIP players need to step up.” Rather than putting PSTN down to get consumers to migrate to VoIP, the VoIP industry should focus on improving quality of service, he said. Addressing connectivity for mission-critical tasks needs to be a priority, he said, but a key issue is how to incentivize companies to deliver highest service quality possible. To figure out a pricing regime, cost data is needed, said Brad Ramsey, NARUC policy counsel.

The transition is happening, and the goal is to make sure regulations promote the transition, said Rebecca Goodheart, FCC Wireline Bureau associate chief. The current Universal Service Fund system is built on a public utility regulation model that doesn’t make business sense, said AT&T Vice President Hank Hultquist. The proposed new system would be based on a procurement process, he said. Transition needs to occur over time and not immediately, said Jennie Chandra, counsel with Windstream. For companies like Windstream, offering interconnected voice means deploying new broadband infrastructure, she said. How to recover the significant cost is an issue, she said. It’s important to have standalone voice in addition to broadband through rural America, she said. The Internet is better connected than a telephone switched network, said Eric Burger, a Georgetown University computer science professor. Hultquist agreed, saying the Internet is far more efficiently interconnected than PSTN. “If you want an interconnection model, take the Internet one.”

"Technological convergence needs to be matched with regulatory convergence” as seen by the advanced LTE and DSL competition and the lack of common regulation, said Michael Calabrese, director with the New America Foundation. New and improved USF is needed, said Staci Pies, a director with Skype. The more robust IT networks and the more end points on the network, the more people can use services like Skype, she said. If the FCC, which regulates interconnected VoIP, were to level the playing field by regulating non-interconnected VoIP, it would eliminate the investment and innovation on broadband, she said.

Various state and local taxes on telecom services are barriers to innovation, said CEO Dave Frankel of conference call company Zipdx. Some states are promoting their own USF to support deployment in high cost areas, he said. But states should play a minimal role in the interconnection system, he said. Consumers don’t care about the differences of receiving and placing calls, he said. State commissions are best positioned to deal with local issues, and that includes consumer protection issues, Ramsey said. “We are at a rare point where the FCC might do something” to fix the USF and intercarrier compensation system, he said. There’s enough in the FCC’s USF rulemaking notice that attracts all parties onto the same page, and that has never happened before, he said: This is the time when “something is actually gonna happen."

Sprint Nextel meanwhile continued its attack on the AT&T’s plan to buy T-Mobile. The deal has “much broader ramifications than just a wireless industry” effect, said Trey Hanbury, a director with Sprint. “We think a lot of parties from the investment community, the CLEC industry, the application developers and all down the line should be concerned as well.”