Telecom Execs Frustrated by Government Shutdown, Outdated Laws Requiring FCC Permission
AT&T and T-Mobile executives are frustrated by government shutdown, now well into its second week, they said at the Telecommunications Industry Association conference. The FCC’s work on spectrum auctions, getting spectrum from the Department of Defense, the broadcaster incentive auction -- “all that work has stopped,” said Thomas Sugrue, senior vice president-government affairs for T-Mobile. “One week? Sure, we can all make that up,” he said. “But once it gets a second week, and if we're talking about a third, there could be some real negative impacts on the timing of that.” T-Mobile is “fortunate that we don’t have an intensive, major deal pending,” like AT&T’s bid to acquire Leap Wireless, Sugrue said.
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"I'm frustrated by it,” said Jim Cicconi, senior executive vice-president at AT&T. The government would help its own credibility if there were more “rational consistency” on how it deals with a shutdown, he said. When the federal government barricades open-air memorials and scenic overlooks off the highway, and the FCC closes its website while other agencies have left theirs open, “it engenders a disrespect for the process, I think, when you have these sorts of anomalies in implementation.”
There’s a danger in getting too caught up in politics, in the process avoiding the more important questions about policy challenges, said Craig Silliman, Verizon senior vice president-public policy. Silliman was more interested in talking about how to “get the right framework in place,” rather than “process on the Hill,” he said. The answer is not getting the government to move faster -- “you can’t move at the speed of technological change,” he said. But the question has to be “how do you get the government away from building regulation and policy on technology-specific pillars so that the industry can innovate and invest?”
Silliman and Cicconi cited Google’s fiber projects as an example of regulations impeding progress. “When Google built fiber and decided they didn’t want to offer voice services ... that should be a wakeup call to policymakers all over the country,” Silliman said. That’s just the tip of the iceberg, he said, “just the one you know about.”
With the massive technological convergence of networks, the problem is “uneven regulatory barriers,” Cicconi said. When the cable industry moved to DOCSIS 3.0, it didn’t have to get FCC permission, he said; in the wireless space, AT&T doesn’t need permission to move from 3G to 4G to LTE. “Yet if we want to upgrade a TDM facility ... we're not allowed to do that. We have to go get permission from the government in order to do it,” he said. “It drives investment and innovation into other areas. Frankly, we need these decisions to be based much more on market forces” rather than on the fact that one has legacy regulations and the other areas don’t, he said.
No one’s seeking a “regulation-free zone,” Cicconi said. There’s a range of areas where regulations are appropriate, such as in public safety, he said. One of the hardest things for government is to rethink its mission from time to time, and that’s what the FCC faces today, he said. In 1996 Congress recognized the Internet revolution was coming and gave the FCC “some very unique powers of forbearance and waiver authority with regard to their own regulations, to keep them updated,” Cicconi said. The FCC hasn’t been using the power as Congress intended, but it has the authority to update and modernize, he said.
"I completely accept the fact I'm going to have 911 obligations,” said Bob Quinn, AT&T senior vice president, at an IP transition panel. An important issue in modernizing the regulatory structure is whether to take the 1996 Telecom Act’s Title II regulatory model for interconnection and impose it onto VoIP interconnection. AT&T has 5,000 interconnection agreements domestically in the U.S., because the Section 251 model said each carrier can demand interconnection from an ILEC in each LATA, he said. That model is not sustainable in the IP world, he said.
"Interconnection is working remarkably well,” said David Young, vice president-federal regulatory affairs at Verizon. The global Internet has evolved all without any government requirement or intervention, he said. But interconnection rules that developed to help monopoly providers transition to a competitive environment have no place in an IP future, he said: State-based, LATA-based regulatory backstop would be “totally inappropriate” for the current situation.
Quinn cited a new paper (http://bit.ly/1fjIdgz) by Georgetown visiting senior policy scholar Anna-Maria Kovacs, commissioned by the Internet Innovation Alliance, that said only 5 percent of people rely exclusively on the POTS network. U.S. communications has almost completed its transition to IP, with legacy switched traffic amounting to less than 1 percent of IP traffic today. “The regulatory framework, however, has not caught up to the marketplace reality,” the paper said. “The least-regulated platforms -- Internet, cable, and wireless -- are the most successful, because they have been free to innovate and to invest their capital efficiently. The most regulated -- the incumbent telephone companies (ILECs) -- have been forced to waste both capital and operating funds on obsolete networks, thus limiting their ability to upgrade their infrastructure,” it said.
Where interconnection really matters is in managed voice, said Lisa Youngers, vice president-federal affairs at XO. The FCC has to clarify that Section 251/252 requirements apply to IP interconnection, she said. “The only thing the CLECs are asking for is a regulatory backstop in the negotiation of those interconnection agreements.” What’s most important, said Kristie Ince, vice president-regulatory affairs at tw telecom, is access to last-mile facilities at just and reasonable rates. “Interconnection is fundamental to protect competition,” she said.