What AT&T has proposed is a series of “trials” where they cut over a whole metro area to IP. A cynical observer might say that such a trial hardly seems temporary. There is no language in these proposals to cut the city’s network back to TDM if there are any glitches.
Wheeler stumped for policy that would set forth the best process that the FCC can initiate so that, in parallel, it may decide the legal and policy questions raised by this change. The other FCC commissioners agree that it is an important initiative. It likely will happen in some form.
Wheeler admits that the future of networks can be hard to see, especially in moments of great change. He offered the following historical note: “When Alexander Graham Bell offered Western Union all rights to his telephone patents in 1876, the response was a curt dismissal. A Western Union memorandum concluded that “[t]his ‘telephone’ has too many shortcomings to be seriously considered as a means of communication.” The way forward is to encourage technological change while preserving the attributes of network services that customers have come to expect, Wheeler said in a blog post.
All of that would sound great to many customers, but what about those charged with providing the services?
The big names in telecommunications services — the ones alarm companies purchase from — are not singing the same song. The former Baby Bells are in favor of dumping TDM and, with it, the regulatory oversight that the FCC has exercised on price controls. CLECs (competitive local exchange carriers) and others worry that they — and their customers — will be priced out of the market in a non-regulated environment.
“Our current infrastructure has served us well for almost a century, but it no longer meets the needs of America’s consumers,” Jim Cicconi, AT&T’s senior executive vice president of external and legislative affairs, said in a prepared statement. “The transition to broadband and IP services that has already begun is driven by consumers who are moving to the Internet and choosing to connect in ways not imagined just a decade ago.”
Their stance is that we are in an IP universe and that the Internet works so well that there is no need for regulations under an IP-based network plan. Here, then, might be the “reason-behind-the-reason” for the major players’ strong desire to see the world go to IP: An opportunity to free themselves of pesky regulation.
“We fear a monopoly or duopoly without price controls,” McKee says, pointing out that AT&T and Verizon today control 80 percent of the telecom revenue in the United States and that even the competitive carriers must purchase lines from the LECs. “One of our concerns is that those carriers will have incentive to use market power to increase costs to the enterprise customer.”
He adds that he fears the LECs will use a transition to IP as an excuse to duck existing regulations that cover TDM-based services, especially pricing rules. “We share the CLECs concerns,” McKee says. “There is a need for the FCC to continue to provide for interconnection to the LECs at a reasonable and affordable rate.
“AT&T is using the IP transition as cover to eliminate regulatory oversight,” McKee continues. “They are effectively using removal of copper to remove any obligation to the last-mile connections,” he says. He fears that AT&T will argue that the old regulations covered TDM and copper. “If the network is no longer copper, then is there no need for FCC jurisdiction?
Much of the FCC’s broad plan is supposed to be aimed at underserved geographic areas. This will require substantial capital investment by telcos in many cases. “Like any change, it requires planning,” Cicconi said. “The geographic trials directed by Chairman Wheeler will provide the real-world answers needed to ensure a seamless transition.”
Wheeler’s idea is neither original nor is he the first to voice it at FCC; in fact, the odds of action being taken are bolstered by the number of senior Commissioners who have already pushed for IP before Wheeler’s time.