AT&T IP Transition Proposal Raises Competitor Concerns

"AT&T will be trying more honey than vinegar this time around,” said Public Knowledge Senior Vice President Harold Feld. He was struck by the “humble” posture AT&T’s filing (http://xrl.us/bnyhdx) appeared to take, compared to its “more aggressive tone” in past dealings with the FCC, such as during the company’s proposed buy of T-Mobile. AT&T talks about starting a dialogue and a pilot program, rather than their “usual language” about how the commission must take action or it will hurt investment and jobs, Feld said. “This is a chastened AT&T. They saw that [Verizon] got its deal with the cable guys through by working with FCC staff rather than trying to brow beat them."

AT&T’s assertion that the Act’s discontinuance requirements aren’t applicable when transitioning from legacy TDM-based services to “superior” IP-based ones brings up an “interesting issue” of the FCC’s jurisdiction under Section 214, especially since that impacts Verizon and other telcos, Feld said. As Verizon transitions people in its FiOS territories off copper and onto the fiber-based IP service, that telco and others are “going to want to play here to protect their interests,” he said. “It will be very interesting to see whether there are things AT&T would agree to but Verizon will try to block."

In AT&T’s proposed “regulatory experiment,” ILECs such as Verizon would be able to elect to participate in the deregulatory trial runs, proposing individual wire centers for the “beta test” (CD Nov 8 p11). Tom Tauke, Verizon executive vice president-public affairs, policy and communications, told us the telco was “certainly focused” on the impending industry transition to all-IP infrastructure. AT&T’s filing mentioned some of the issues to be considered, but he declined to make a recommendation as to “exactly what process the FCC should follow."

"Incumbent carriers are doing their best to muddy the FCC’s policy waters with fanciful claims about the competitive impact of packet mode network services,” and AT&T’s petition is “just the most recent example of this,” said Colleen Boothby of Levine Blaszak, who represents high volume purchasers of special access services. “But the incumbents can’t change the fact that packet services use the same infrastructure -- the same trenches, conduit, poles, copper loops, fiber strands, spectrum, rights of way, and building access, not to mention truck rolls, skilled workers, billing systems, and other expenses -- that incumbents accumulated over decades of monopoly status.” Whether traffic is digital or analog, TDM or packet, the same handful of incumbent telcos control the facilities that all traffic must use to reach end users, she said. “Until competition can emerge and thrive, customers need the FCC to police the access and interconnection ‘rules of the road’ for packet traffic, just as it does for existing traffic."

CompTel CEO Jerry James agreed the industry is moving to an IP-to-IP platform -- a position the competitive sector adopted earlier, he said. “We disagree, though, on how to get there,” he said, arguing the Act already calls for IP-to-IP interconnection rights. Several states have agreed with CompTel’s position, he said, and staff at the Ohio Public Utilities Commission recently ruled that IP interconnection rights are inherent in the Act, and that the Act is technology neutral, he said. The Liberty/Cablevision arbitration in Puerto Rico similarly called for IP interconnection, he said. As the industry moves toward all-IP, the commission has a role to ensure that access to wholesale inputs and facilities are still required under the Act, James said.

The IP transition will undoubtedly involve some disruption to existing services and require updated rules, said Fred Campbell, director of the Competitive Enterprise Institute’s Communications Liberty and Innovation Project, in a blog post Wednesday (http://xrl.us/bnyoji). “Such disruptions are an inherent part of progress and have been successfully overcome with minimal impact in the previous DTV and digital wireless transitions.” Campbell said he’s “confident” the FCC can make a “similarly smooth transition from switched telephone networks to all-IP networks, and now is the time to get started."

A telecom attorney said he’s wary of situations where an ILEC makes a decision to invest massive amounts of money to deploy network equipment in rural areas, because of a concern that the ILEC would seek a “quid pro quo” of reduced regulation from the FCC. But regulators aren’t concerned about quid pro quo deals, said Anna-Maria Kovacs, visiting senior policy scholar at Georgetown University’s Center for Business and Public Policy. They're concerned about ensuring attractive choices for consumers and businesses over the next decade or more, she said: AT&T will “have to keep investing, and it won’t be able to do that long-term under the current rules, much less if regulators revert to the obsolete regime the CLECs are trying to resurrect.”