State Regulators Told That IP Interconnection Agreements Need Oversight.
As state regulators fret over their role during the IP transition, representatives from Sprint and Time Warner Cable said this week there’s a need for the bodies to police IP interconnection agreements just as they did with old time-division multiplexing connections. Speaking on a panel Wednesday on IP interconnection at NARUC’s Winter Committee Meetings, Charles McKee, Sprint vice president-government affairs, federal and state regulatory, said “incumbents have an incentive and the ability to suppress” new competitors. They may not refuse to interconnect, he said, but they could set prices exorbitantly high without a requirement to negotiate in good faith. IP promises improvements to customers, including HD Voice, he said. “But both sides need to have access to it,” he said.
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Time Warner Group Vice President-Chief Regulatory Counsel Julie Laine also told regulators that state bodies have a role to play in arbitrating disputes over the agreements. Safeguards are needed as “a regulatory backstop,” she said. The comments came amid a dispute over the role state bodies should play in interconnection agreements, and as some states are signaling they have authority over them. Despite AT&T’s contention that the 1996 Telecom Act’s requirement to provide interconnections does not extend to IP, the Michigan Public Service Commission took a different view in December. It reversed an arbitration panel determination and required AT&T to provide Sprint with IP interconnection. It’s unknown if AT&T plans to appeal the ruling. The company did not respond to press inquiries on Thursday. The MPSC decision gave AT&T and Sprint until Tuesday to reach an agreement, but AT&T on Monday asked for an extension until Feb. 25, a commission spokeswoman said. The MPSC may take up the request for an extension at its meeting next Thursday.
On Wednesday’s panel, AT&T Vice President-Federal Regulatory Hank Hultquist said sections 251 and 252 of the Telecom Act did not apply to IP interconnection agreements but was said he was open to some form of regulatory framework.
In a pending case before the Massachusetts Department of Telecommunications and Cable, a group of CLECs is contesting private interconnection agreements Verizon New England is negotiating. The CLECs, which include EarthLink Business, Cbeyond Communications and two data services, are asking the commission to require Verizon to seek commission approval of the agreements. It also asks that the carriers, if they want, be able to sign the agreement on the same terms that it’s being offered to other companies. MDTC is investigating whether the agreements fall under Section 251. “Absent the ability to interconnect and exchange traffic in IP format, the Competitive Carriers, other competitive facilities-based providers, and their customers will experience higher costs, degraded service quality, and slower deployment of IP technology,” the carriers said. “Such an outcome would harm public welfare.” Verizon argued, however, the state does not have authority over the agreements and an FCC ruling on whether it does is pending.
The cases could be significant, said economic consultant Joe Gillan, who was also on the NARUC panel. The Michigan ruling, he said in an email, asserted that states can arbitrate IP interconnection disputes and that AT&T cannot use its corporate structure to evade its interconnection obligations. “It was ground-breaking and, hopefully, will help other states move forward,” he said. A Massachusetts decision to intervene could also encourage other states to intervene in such cases, he said. “As a practical matter, you can only hold back the dam so long, but this is finally moving. I do believe that these state decisions will eventually produce appellate decisions that resolve the question,” he said.