The IP transition could significantly reduce long-term costs...

the deregulatory direction sought by the carriers,” he said. That would be “clear long-term positive” for ILECs like AT&T, Verizon, CenturyLink, Windstream and Frontier, he said. Gallant cited a paper by Georgetown visiting senior policy scholar Anna-Maria Kovacs (CD Oct 10 p8), which said only 5 percent of American households rely exclusively on circuit-switched telephone service (http://bit.ly/1fjIdgz). That number will likely decrease, yet a government mandate that ILECs continue operating their ever-shrinking TDM networks “siphons billions in capex that could otherwise be devoted to broadband expansion,” Gallant said, summarizing the Kovacs paper. Incumbents appear “well-positioned for success” in the oncoming regulatory battles, Gallant said. The FCC previously signaled “cautious support” for shutting off the TDM network in its 2010 National Broadband Plan, and the agency itself is “moving toward an IP/broadband focus,” Gallant said. Wheeler was chairman of the Technical Advisory Council when it recommended a 2018 TDM turnoff date. “That does not bind him to any particular course of action” as FCC chairman, but his leadership of TAC on this issue “would seem to suggest at least general support for enabling carriers to redirect support toward broadband service, provided consumers and competition are protected,” Gallant said. In the long run, Gallant expects a court challenge over the FCC’s ability to order interconnection and unbundling of IP-based services. “CLECs may well need to re-make the case that their competitive presence is an important policy worth preserving,” he said.