IP Transition Should See Light Regulatory Touch, ILECs Say

As the FCC tackles the IP transition, it should be guided by three overriding principles, CenturyLink Vice President-Federal Relations Melissa Newman told the USTelecom-sponsored Hill panel. First, any new regulations should be “narrowly tailored” to address a specific problem that “needs to be solved,” she said. ILECs already have “asymmetric” burdens in the time-division multiplex world, but with IP “everybody’s in the same place,” she said. Second, the FCC should refrain from applying regulations counterproductive to growth in IP, she said. “Most legacy regulations should not be applied to next-generation IP services.” Finally, the commission should establish “flexible guidelines” for the IP transition, realizing that each carrier faces “unique circumstances” as it migrates to IP, Newman said.

As TDM-based hardware is upgraded to IP, many policy issues will be implicated, said Quinn. “We're not smart enough to be able to tell you we even know what all the issues are.” That’s one reason to approve the AT&T deregulatory wire center trials, he said, as the FCC can oversee a “laboratory” to flush the issues out and offer a basis to resolve them. At that point, AT&T can come up with a plan to “operationalize” what it’s learned in its one or two test wire centers, and apply those lessons to its 4,500 wire centers nationwide, he said. “It’s going to take several years,” he said. “No one’s going to lose service tomorrow."

Quinn said the company is considering a rural wire center for one of its test beds. It will cause more problems, he said, but AT&T has to “see the harder case” so it can address all the issues. AT&T will need about six months to put together a “detailed plan” to map TDM services to IP services that could replace them, he said. “It’s going to be incumbent on us to point out all the different alternatives” that are available “on other providers who offer a similar type of services,” he said.

The industry needs a national policy to deal with IP networks, said David Young, vice president-regulatory at Verizon. IP networks are “inherently interstate,” and shouldn’t be subject to 50 different state regulations, he said. The U.S. needs a national policy that will set a good example for the rest of the world, he said. A lot of the “urgency” around the IP transition comes from the “fear of regulatory inertia,” said Jonathan Banks, senior vice president at USTelecom. Traditional phone companies are still regulated by the FCC as if they were monopolists, but there’s no antitrust thinking that suggests someone can have a third of the market and still be a monopolist, he said.

The FCC took “first steps” last week with its adoption of an order last week granting Vonage direct access to phone numbers (CD April 19 p1), Quinn said. The industry is at “the very early stages” of IP-to-IP interconnection, he said. As such interconnection becomes the default architecture that all carriers need to get to, “I can’t tell you today what it’s going to look like, but I doubt it’s going to look like [Section] 251 interconnection,” he said of the Telecom Act. “There’s no need to force every carrier to establish an interconnection point in 250 locations in the United States.” Quinn thinks fears of “black holes” of Internet access that simply doesn’t connect are overblown. “Really what it comes down to is nobody has any interest in having to say, ‘You can’t call that company because I don’t have a relationship with them,'” he said.

CLECs and states like to call for IP interconnection policies through Section 251, Banks said, but that’s a very voice- and monopoly-centric view of interconnection, he said. The economics have changed “radically,” and the idea of having one-to-one discrete interconnection throughout the U.S. is “long outmoded,” he said.