Pai Says ‘IP Transition Task Force’ Would Spur Move to All-IP Networks
FCC Commissioner Ajit Pai pushed for creation of an Internet Protocol transition task force to help modernize the commission’s “anachronistic laws” and accelerate the technological changes in the communications industry. “We need to adopt a holistic approach to confronting this challenge instead of addressing issues on a piecemeal basis as they happen to pop up,” Pai said Tuesday at an event on Internet transformation hosted by the Competitive Enterprise Institute’s Communications Liberty and Innovation Project (CLIP). “The work of the task force will be as daunting as it is necessary, for we simply cannot not import the broken, burdensome economic regulations of the PSTN [public switched telephone network] into an all-IP world."
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The proposed task force would recommend the repeal of “old-world regulations” that don’t make sense in a competitive, IP-based marketplace, Pai predicted. “That means scouring the Code of Federal Regulations to track down and remove all the tariffs, the arcane cost studies, and the hidden subsidies that distort competition for the benefit of companies, not consumers,” he said. “While these rules remain on the books, extending them to IP may just be too tempting."
The National Broadband Plan recommended that the commission begin planning the transition to an all-IP world. Pai wants to put this recommendation into action by establishing the task force, and establishing a nine-month deadline for the task force to issue recommendations, a Pai spokesman said. Ultimately it’s the chairman’s decision whether a task force gets established, an FCC official said.
Until the task force makes its recommendations, the commission should go a “substantial” way toward restoring certainty in the telecom industry by closing the Title II docket, Pai said. After the commission relieved wireline broadband services from Title II regulations in 2005, deployment increased and prices fell, he said. “Why would we even consider returning to the Title II world?"
The commission should also remove barriers to investment on state and local levels, Pai said, citing the bipartisan deregulation of VoIP services in California as an example of a broadband-friendly policy that should “serve as a model to those of us at the federal level” (CD Oct 2 p9). A dynamic telecom industry will be at the forefront of an economic recovery, he said.
Speakers at the CLIP event supported Pai’s task force proposal, but acknowledged the task force would have a daunting job. Its first order of business should be to figure out a time frame for action, and how to set up a process, while realizing that adjustments will likely need to be made, said CLIP Director Fred Campbell. The “impediment” now is “there is no task force,” and some stakeholders are resistant to change, he said. Medley Global analyst Jeffrey Silva suggested the task force start by considering the “number of interesting ideas” proposed by AT&T in August, including a proposal to “sunset” the PSTN.
The Telecom Act of 1996 was predicated on the idea of facilities sharing, but it’s no longer true that a local loop facility is a “bottleneck access facility,” said Wiley Rein attorney and former Wireline Bureau chief Tom Navin. The commission should examine any regulations on the books to that effect to see whether the rules are acting as an “investment disincentive,” he said. The idea that any provider providing voice service today is dominant is “ludicrous.” The act should ultimately be re-written, he said, because it’s “premised on an industry that no longer exists."
Speakers strongly supported Pai’s proposal to close the Title II docket, which contemplates reclassifying Internet services as telecom services subject to common carrier regulations. “It seems an absurdity” to keep the docket open, Navin said, since incumbent telephone companies got Title II relief in order to get them to invest in advanced networks. FCC Chairman Julius Genachowski told the House Communications Subcommittee in February he would “consider” closing the docket (CD Feb 17 p3).
The commission has to provide regulatory certainty to the telecom industry, which is investing $65 billion a year in broadband infrastructure, said Jonathan Banks, USTelecom senior vice president-law and policy. Companies are hesitant to allocate their investment dollars in networks without knowing what the regulatory framework for those services will be, he said. Regulation requiring telcos to maintain their legacy networks are “fundamentally unsustainable” because customers are leaving, and the average cost per subscriber is increasing, he said. “From an old school telephone company perspective, it’s time to really have this dialogue.”