Industry Feud on IP Interconnection Policy Reaches Capitol Hill

"A prescriptive interconnection regime is ill-suited to the IP world,” commented USTelecom, calling the matters of IP interconnection technical and better left to engineers. Any state oversight role is “anachronistic,” it said. The federal government’s promotion of interconnection should “entail case-by-case adjudication of interconnection disputes based on well-established competition standards under federal antitrust law (e.g., unreasonable refusals to deal), rather than ex ante prescriptive interconnection mandates,” USTelecom said.

"Despite clear guidance from the FCC that interconnection obligations are technology-neutral, many incumbent carriers contend that they are not required to negotiate under Sections 251/252 of the Communications Act for the interconnection and exchange of voice traffic using IP technology,” Sprint told Congress. “This reluctance to acknowledge a legal obligation to provide interconnection at reasonable cost-based rates is an ominous sign for competitive carriers.” Congress and the FCC should institute “broad national interconnection requirements for IP voice” that let state regulatory commissions arbitrate disputes, said the carrier. It dismissed the virtues of allowing contract law alone to guide such interconnection agreements.

T-Mobile agreed the FCC should retain sections 251 and 252 authority over interconnection agreements regardless of changing technology. It pointed to the power of AT&T and Verizon. It’s been “exceedingly difficult to, for example, negotiate IP interconnection agreements with ILECs on reasonable terms and conditions,” T-Mobile said. “This legacy interconnection architecture and competitive reality allows ILECs to exercise wholesale market power and impose excessive and discriminatory transport and tandem switching costs, as well as trunking and facility charges, on competitors seeking access to their networks and facilities.”

Comptel also backed such IP interconnection regulation. “If the provisions were as onerous as some make out, then the smallest incumbent local exchange carriers would confront the greatest difficulty complying with them,” Comptel said. “Consequently, their support for IP interconnection falling under the statute is compelling evidence that the administrative burden is reasonable, particularly in comparison to the absolutely vital protections that it provides."

Congress and the FCC “should make it clear that the Internet backbone providers and transport providers that connect service providers to the emerging Public Broadband Network are telecommunications carriers subject to Title II of the Act, particularly Sections 251 and 252,” said WTA. Disregarding the sections “poses real and substantial dangers that the Internet will become the exclusive or near-exclusive domain of large peering entities, and that RLECs and other smaller broadband service providers and their customers will be unable to obtain sufficient and affordable access to all of the information, services and people that should be available to all Americans over the public network,” WTA said.

'Unnecessary, Detailed Mandates'?

CenturyLink disagreed: “ILEC-specific interconnection obligations should be retired at the same time as the obsolete circuit-switched networks on which they are based,” the telco said, saying the IP transition means providers will have “incentives to negotiate commercial agreements.” It slammed the rules as “unnecessary, detailed mandates” that “would stunt innovation by calcifying inefficient interconnection arrangements” and “could inadvertently spill over to peering arrangements used for non-voice IP traffic, or cause providers to create redundant interconnection arrangements to handle VoIP traffic, simply to avoid triggering regulation of their Internet traffic.”

"Oversight and consumer protection” should be the role of Congress and the FCC, said ITTA. It encouraged policymakers to look to the IP trials for guidance, while noting it believes “in an all IP world regulating interconnection is unnecessary unless a market failure exists.” States should play a role in looking for those, it said.

The IP transition will “require a reexamination of the extent of these requirements" of Section 251, said the Telecommunications Industry Association (http://bit.ly/1u6YwEC). “A key challenge will be determining how the number of exchange points can be reduced, while still preserving competition. Preserving telecommunications competition, while also allowing for a natural reduction in the number of points for traffic exchange as a result with central office closures is a critical policy challenge for telecommunication policymakers.”

The Information Technology and Innovation Foundation trumpeted what it saw as the success of IP interconnection and warned against “the heavy handed regime” of Section 251. “The few sore thumbs, such as the 2010 dispute between Level 3 and Comcast and recent disagreements between Netflix and various ISPs, are best thought of as growing pains in the continuing development of ever more bandwidth intensive use of the Internet,” said ITIF President Robert Atkinson and telecom analyst Doug Brake (http://bit.ly/1ojNlGr). CenturyLink slammed the rhetoric of edge providers. They “increasingly argue today that ‘Net Neutrality’ principles should be extended to the exchange of IP voice and data traffic,” it said. “What they actually demand, rather than transparency or fairness, is the imposition of mandatory peering without compensation, which is akin to the highly regulatory mandatory bill-and-keep requirement that generally applies to common carrier voice traffic,” which is “archaic monopoly-era voice regulation to all IP voice and data traffic (without accepting common carrier regulation of their services).”

Interconnection policy in the IP era should be “noticeably different -- presumptively less interventionist -- in scope,” said the Free State Foundation (http://bit.ly/1B195er). Give the FCC “the authority to intervene to address only those specific interconnection practices that pose a substantial and non-transitory risk to consumer welfare,” it recommended.

Several stakeholders did not file comments or were still in the process of doing so. Comcast, Google, NCTA and Netflix did not, for instance, nor did the Computer & Communications Industry Association, their spokespeople told us. Others such as NARUC were still putting the finishing touches on theirs. AT&T and Verizon have typically opposed such regulation of IP interconnection but had not yet shared any individual company comments with us at our deadline. (jhendel@warren-news.com)