IP Interconnection a Major Sticking Point Among Iowa Stakeholders

Stakeholders outlined differing concerns about Iowa’s telecom landscape in reply comments before the Iowa Utilities Board this week. The board is considering how to change the state’s telecom rules, and in January solicited comments and replies in a notice of inquiry. Industry favored less regulation, with strong debates over the details of any Internet Protocol-enabled services regulation, as other stakeholders pointed to consumer concerns.

AT&T compared VoIP to wireless and encouraged no state regulation -- which, “far from advancing consumers’ interests,” will “harm consumers,” the telco said (http://bit.ly/15dAZnM). CenturyLink also cautioned against legacy regulations. “Overlaying a [Communications Act] Section 251 regulatory framework on the ILEC network as it evolves into an IP-enabled environment, as suggested by some commenters, will only serve to delay the build-out of a universal IP network by driving unnecessary cost into that network,” it said. CenturyLink discouraged such regulation of interconnection agreements and called VoIP regulation in general “ill conceived.” Verizon noted that 29 states have taken a “hands-off” approach to VoIP regulation (http://bit.ly/19RtgwR).

T-Mobile worried that AT&T and Verizon want to keep regulators off IP interconnection agreements. “Neither AT&T nor Verizon explicitly argue [in initial comments] that a regulatory hands-off approach for VoIP should extend to interconnection to facilitate the exchange of voice traffic between two carriers in IP format,” the carrier said (http://bit.ly/12EG4QK). “However, it is important that the IUB understand that that is exactly what AT&T and Verizon would undoubtedly pursue in Iowa, as they have elsewhere, under the guise of pursuing generic VoIP deregulation.” Even in states that have limited VoIP regulation, IP interconnection oversight remains an open question, T-Mobile said. It called the regulatory backstop of Communications Act Sections 251 and 252 necessary.

Minimal retail regulation of IP services is fine but “retain stronger regulation where there is a lack of competition -- where there are bottlenecks or for core functions, such as those identified as requirements for ILECs under Sections 251, 252 and 271 of the Act, that level the playing field for more entrants to provide retail competition,” Cox Communications said. Windstream is uninterested in weighing in on retail IP regulation but wants the board to be careful, it said, framing issues in light of the transition to all-IP infrastructure. “This Board’s authority over providers of IP-based services in the interconnection and intercarrier dispute realm is a different matter entirely, and it would be inappropriate to use general statements regarding retail services [from AT&T] to support policy reforms affecting wholesale services,” the telco said (http://bit.ly/120QJ9H). Sprint Nextel also wants “strong oversight of intercarrier relations” because that allows for competition, it said (http://bit.ly/11XJJhh).

"Board action purporting to impose such an obligation would exceed the Board’s authority,” Verizon countered regarding IP interconnection oversight. The FCC has not worked out these details yet, it said.

CTIA jumped in to question consumer advocate comments. “It is particularly surprising to see the OCA argue in a way that suggests possible re-regulation of wireless,” CTIA said (http://bit.ly/120QETv). “Nearly every commenter of every kind in this docket, including those in direct competition with each other, favors some additional deregulation.” It painted a picture of robust wireless competition and consumer protection in the state. T-Mobile called the consumer advocate’s concerns “misguided and dated,” missing the wireless competition out there. It discouraged further regulation.

Another point of contention was Iowa’s carrier-of-last-resort obligations. “As a result of the FCC’s recent changes to the USF program, ITA questions the fairness and viability of any ongoing state COLR obligation for ILECs or any other service provider,” the RLECs said. AT&T suggested killing the COLR obligation outright, and Verizon urged the state to eliminate the language. Any new COLR requirement would run “contrary to nationwide trends, which would compel stranded investment and wasteful duplication of facilities,” Verizon said. CenturyLink said the requirements are no longer relevant. Killing COLR would hurt Iowa’s universal service goals, the consumer advocate said.

Initial comments showcased disagreement on how aggressively the board should modernize, said ITA. ITA focused on broadband deployment, the IP transition and what the process means for consumers, referring to the “chilling effect of USF/ICC reform on broadband investment.” It advocated limited board oversight in the realms of public safety and health. Sprint cautioned against the state regulators jumping too heavily into universal service and broadband programs, saying it might duplicate federal efforts. Cox discouraged Iowa from creating a state USF “given that the impacts of transitions to federal funding through Connect America Fund are still unknown,” it said. “Similarly, the Board should not take steps to establish a direct fund for broadband deployment and should instead allow additional time to see how the efforts of the Connect America Fund and Connect Iowa play out.” Verizon also discouraged creation of a state USF.

"The time is ripe for Iowa to join the 25 (and counting) other states that have recognized that legacy regulations have long outlived their usefulness,” AT&T said, citing a recent National Regulatory Research Institute state telecom deregulation report. Sprint said the bulk of stakeholders prefer a more moderate path than AT&T, however, and allied itself with that majority. It wants the “continued evolution, expansion, and fine-tuning of the gradual deregulation process that the Board has been undertaking for years,” it said. Big companies push for deregulation in “bad faith,” favoring only deregulation that will enrich them, said the Rural Iowa Independent Telephone Association (http://bit.ly/15dVcKe). “The Board should focus the NOI on reforming its consumer protection activity,” CenturyLink recommended, suggesting regulators and consumer advocate partner.