FCC Adopts IP Transition Orders on Wholesale Competition, Backup Power

The competition order requires providers to notify customers of plans to retire copper networks and to offer competitors IP-based wholesale replacement services that are “reasonably comparable to those of legacy services,” said an FCC release. The replacement requirement covers both special-access (broadband) services and “commercial wholesale platforms” (providing voice-grade service), and will stay in effect until new special-access rules are implemented, said an FCC staffer at the meeting. ILECs resisted the requirements and sought a two-year sunset. Asked about Wheeler’s proposal to tee up five factors -- with questions derived from pricing safeguards and other principles proposed by Windstream, a CLEC/ILEC -- in reviewing reasonable comparability disputes, a senior staffer told us the factors were in the order. The FCC also approved a Further NPRM intended to clarify criteria for reviewing discontinuance applications under Section 214 of the Communications Act.

The Republican minority dissented. They said the FCC was focused on protecting competitors and preserving legacy networks, not on speeding the IP transition and broadband deployment. “Why is the FCC dead set on slowing it down?”asked Commissioner Ajit Pai. “It appears that Chicken Little rules the roost,” he said, referring to arguments “the sky will fall” if fiber replaces aging copper lines: “The FCC has put the interests of these corporate middlemen over the welfare of consumers.” Commissioner Mike O’Rielly said the FCC’s “reasonably comparable” factors left ILECs little flexibility in upgrading their networks and services. He was particularly troubled by the requirement that ILECs continue to offer commercial wholesale platforms they voluntarily negotiated as successors to the FCC’s UNE-P (unbundled network element platform) discount regime, which was overturned in court.

The Democratic majority said it was upholding basic competitive and consumer protections, not discouraging IP/broadband advances. Wheeler suggested some saw the IP transition as an opportunity to erase basic responsibilities of providers to users. “Rather than erasing, we are reaffirming everlasting principles in a compact between those who build and operate networks, and those who use them,” he said. “Changing technology doesn’t change responsibilities.” Commissioners Mignon Clyburn and Jessica Rosenworcel said the order struck an appropriate balance between facilitating IP-based improvements and protecting competition and consumers.

CLEC officials and allies lauded the FCC action. Comptel President Chip Pickering said, “Upholding competition policy, regardless of network technology" will spur “new network deployment, better customer service and continued innovation.” Windstream Senior Vice President Eric Einhorn said in an emailed statement that the order would “accelerate the IP transition” by ensuring it “isn’t misused to raise prices and inhibit competition.” Public Knowledge and the Broadband Coalition, which includes CLECs, also lauded the FCC actions (here and here).

ILEC officials and allies took a dimmer view. AT&T Vice President Frank Simone said in a blog that the order “threatens to stifle [the IP] transition by erecting new regulatory obstacles” that benefit “select companies” not consumers, investment, and competition. “The FCC cannot call on the industry to invest in more fiber deployment, raise the bar for what qualifies as a broadband service and then make it more difficult to retire services that do not even qualify as broadband,” he said. USTelecom Senior Vice President Jon Banks suggested the FCC’s tech transition orders will “handicap” his members delivering on a compact to invest in better services -- and “in the name of keeping a regulatory structure under which Fax machines provide a communication service of such importance that they must be preserved.” In emailed statements, the Free State Foundation offered similar criticism while voicing concern about tying the interim rules to the protracted special access review, and the Internet Innovation Alliance lamented the FCC actions as a “missed opportunity.”

The consumer-oriented order will require facilities-based fixed residential voice providers lacking independently powered systems to offer new customers an option to buy and have installed at least eight hours of backup power capability that can be used during outages, rising to 24 hours within three years, said FCC staffers and a release. Providers will also be required to notify customers every year of the systems’ power limitations and their backup power options. Rosenworcel said the FCC needs to encourage longer backup power capability. O’Rielly concurred in approving, saying he had concerns about industry burdens, the lack of cost-benefit analysis and the commission's hesitation to set a clear federal standard that would pre-empt differing state mandates.

The FCC's provided other details about the competition order. It requires providers for the first time to notify retail business and residential customers of their plans to retire copper networks at least three months in advance, and also requires providers to increase the notice for interconnecting competitors from three months to six months. “This requirement covers all parts of the copper network essential for providing service,” the competition order release said. It didn't expressly address Wheeler’s proposal to include “de facto” retirement in the definition of copper retirement, but it said carriers can retire copper in favor of fiber without prior FCC approval, “so long as no service is discontinued, reduced, or impaired.”

Pai said the agency was opting for “command-and-control regulation instead of permissionless innovation.” Clyburn said she was concerned some consumers would remain unaware of service changes, particularly if carriers are required to notify them only through “one neutral statement.” But she said she was pleased the order would encourage providers to work with their states and communities on outreach. ADT Security Service Vice President Paul Plofchan told us his company welcomed the “one neutral statement” requirement because it believed telco service-change notifications should be separated from marketing pitches to upsell products.

The Further NPRM to codify discontinuance standards tentatively concludes the criteria should include: “support for 911 services and call centers; network capacity and reliability; quality of both voice service and Internet access; interoperability with devices and services, such as alarm services and medical monitoring; access for people with disabilities, including compatibility with assistive technologies; “network security in any IP-supported network that is comparable to the legacy network; coverage throughout the service area, either by the substitute network or via service from other provider and a plan for outreach to affected consumers.”