AT&T petitions the FCC to facilitate experimental transitions to an Internet-based network.
The company recently announced it will invest $14 billion over the next three years to shift from outmoded wireline and mobile services to a single Internet Protocol (IP) network. AT&T also filed a petition with the FCC earlier this month urging the agency to facilitate the company’s transition by adopting what the company describes as “a twenty-first century regulatory regime.”
To transition to a quicker and more reliable IP network, AT&T says it will need to retire its traditional “legacy copper-networks.” According to the company, maintaining duplicative telecommunications networks is costly and inefficient, given that it plans to offer its services through Internet broadband rather than via increasingly obsolete landlines.
The inefficiency of duplicative networks is reflected in the FCC’s own 2010 National Broadband Plan, which recognized broadband deployment as “the greatest infrastructure challenge of the 21st century.” In its plan, the FCC acknowledged that requiring a company to maintain two networks “would be costly, possibly inefficient and reduce the incentive” for adopting modern technology.
However, AT&T claims that legacy wireline networks “remain subject to an array of monopoly-era regulatory obligations” which create obstacles to retiring old networks. AT&T’s petition to the FCC outlines a proposal to facilitate the implementation of a single IP network while still complying with existing regulations.
The company claims that FCC regulations create “a disparate regulatory burden” incompatible with today’s market of competing broadband technologies such as cable, voice-over IP, and mobile service providers who are not tasked with overseeing legacy networks. AT&T is calling on the FCC to fulfill its “promise” in the National Broadband Plan to “facilitate the transition” from legacy services to deploying broadband for all Americans.
However, the company claims that uncertainty over proper interpretation of telecommunications regulation has deterred investment by the private sector. AT&T indicates that it is “stepping up” to do its part as a private carrier. Its investment plan is primarily designed to expand AT&T’s 4G LTE mobile network to 300 million users, and its wireline IP network, which covers voice and television services, to 57 million consumer and business locations.
AT&T’s investment plan has been met with broad support from various commentators. Notably, FCC Chair Julius Genachowski lauded the investment as “proof positive that the climate for investment and innovation in the U.S. communications sector is healthy.” He said that AT&T’s petition to modernize telecommunications rules will be reviewed according to the principles of encouraging private investment, competition, and protecting consumers.
Nonetheless, AT&T’s bold proposal calling for the intervention of the FCC to facilitate its investment plan has its critics. The Broadband Coalition, a group of competitors that have invested in IP expansion, condemned the petition as “a re-run of a tired ploy to leverage the company’s dominance” and complained that “AT&T only invests in order to respond to competition, and competition is made possible by the very pro-competitive policies that AT&T seeks to eliminate.”
Susan Crawford, a visiting professor at Harvard Law School, voiced concerns that if the FCC acquiesces in AT&T’s proposal, the market dominance of wireline carriers will continue by “allowing private carriers to choose who has to rely on wireless and who gets a wire and who gets what type of wire.”
However, according to AT&T, the regulations it criticizes create hurdles to implementing new IP-based networks. An example of a lingering “monopoly-era” regulation cited by AT&T is mandated telecommunications service in certain geographic areas at regulated rates.
AT&T’s petition also highlights one Communications Act of 1934 regulation, which prohibits common carriers to “discontinue, reduce, or impair service to a community” without the FCC first certifying that the action will not adversely affect “public convenience and necessity.” AT&T claim that in implementing a new IP-based network, it is not “discontinuing” service within the meaning of the statute. Rather, AT&T argues, it is upgrading and enhancing the services available to consumers.
In its petition, AT&T suggests a novel solution to facilitate the IP transition: it urges the FCC to initiate “a number of geographically limited trial runs of the transition to next-generation services.” The petition notes the FCC’s authority to suspend regulations in any geographic market, especially if circumstances warrant a deviation that will further public interests. The geographic trials would be conducted on select wire centers chosen by participating “local exchange carriers”. Following a period of public comment, the FCC would permit the IP transition without oversight or requirements of continuing legacy service and implement reforms preventing customers from delaying the transition.
AT&T remains optimistic that “this regulatory experiment will show that conventional public-utility style regulation is no longer necessary or appropriate in the emerging all-IP ecosystem.” More importantly, the company claims, the experiment it proposes will demonstrate which legacy regulations should remain and which should be eliminated.