FCC Adopts Tech Transition Order With Fast-Track Discontinuance Option, New Test

The order created a new framework for telecom providers looking to replace legacy "TDM"-based voice services with IP-based or wireless services under Section 214 of the Communications Act. Such tech transition applications can be automatically granted in 30 days if they meet a three-pronged test to ensure replacement services are adequate, according to an FCC release that said: (1) network performance, reliability and coverage must be substantially unchanged for customers; (2) access to 911, cybersecurity and access for persons with disabilities must satisfy current rules and standards; and (3) compatibility must be ensured "with a defined list of legacy services still popular with consumers and small businesses, including home security systems, medical monitoring devices, credit card readers and fax machines, subject to sunset in 2025."

Any "material price increase for the proposed replacement service" over the price of the discontinued service will prevent streamlined treatment, said Megan Capasso, a Wireline Bureau attorney-adviser, who outlined the order at an agency meeting. Commissioner Mignon Clyburn said she wished the order had made "affordability" a "linchpin" of the discontinuance analysis but was comforted by changes to protect "vulnerable populations." Carriers still would have the option of being reviewed under a traditional five-factor test. The order included guidelines on customer education and outreach.

A declaratory ruling in the order granted USTelecom's 2012 petition to reduce ILEC regulation by declaring they are no longer dominant in the market for interstate switched access services connecting local callers to long-distance networks. "This means less red tape and a more competitive playing field," said Commissioner Jessica Rosenworcel, who said the number of traditional phone lines dropped from 85 million to 73 million in just a year. "This is what network change looks like -- and our decision today recognizes this reality and embraces this change." The order also made "a technical correction" suggested by TelePacific's petition for reconsideration of the timing of competitor service discontinuances when the local telco transitions away from copper.

O'Rielly disagreed new criteria are needed for streamlined reviews in voice transitions. "This particular technology transition is nearly over," he said. "If it were so important to adopt criteria to ensure consumers receive an adequate replacement, that train left the station years ago. The millions of consumers that have already abandoned legacy voice service seem to have their own criteria in mind, and there are a plethora of options that apparently meet those criteria. ... In general, the proper role for the Commission, at this stage, is to remove obstacles to innovation and consumer choice, not create new ones."

"When I think of a streamlined process for discontinuing legacy services, I envision fast tracking applications for services that are no longer widely used by consumers," O'Rielly said. "It would not entail things like three more prongs, network testing, cybersecurity certifications, promises to support fax machines for another nine years, or a 'totality of the circumstances' review, whatever that means. Only the FCC could create a process that imports all of the existing rules, adds some new ones, makes no assurances about timing, and call it 'streamlined' with a straight face. And let’s face facts that despite how it is portrayed, this new process is going to become the sole standard for getting Commission approval on such matters." He supported the actions on the USTelecom and TelePacific requests.

Pai said the FCC had been timid and he questioned the new process's importance. The order's highlights "include letting incumbents file certain tariffs a few days later, correcting a technicality regarding copper retirement, and automatically granting petitions to discontinue services with no customers. Not much action there," he said. "And the bulk of the order is devoted to laying out the various tests, numerous conditions, and multiple obligations of carriers that volunteer to undergo a 'streamlined' discontinuance process for voice services -- a framework sure to scare away most, if not all, volunteers and thus unlikely to have much practical impact."

"The move from traditional circuit-switched voice services running on copper loops to all-Internet Protocol (IP) multi-media networks offers the possibility of better performing and lower priced phone service for consumers," said FCC Chairman Tom Wheeler in a statement. "In embracing such advances we must not, however, erase the historic responsibilities of network operators to the users of their services. ... The Commission acts today to eliminate outdated legacy requirements that are no longer necessary, to develop the proper framework for the transition to new technologies, and to preserve basic network operator responsibilities."

The order ensures "consumers will receive in the future what they expect now: reliable and secure, voice service," Clyburn said. She said she is grateful the order "contains my suggestion to expand the availability of the consumer hotline beyond normal business hours, and to make consumer education materials available in other languages."

USTelecom welcomed the approval of its petition for relief and expressed hope in a statement the new streamlined Section 214 path would bear fruit. Public Knowledge issued a statement that lauded the FCC action and also released a separate joint statement with Verizon, Communications Workers of America, AT&T and USTelecom that said: "Whatever our disagreements about the process the FCC has adopted today, we agree that the transition of the traditional phone network to next-generation platforms has the potential to improve the lives of all Americans. Providers such as Verizon and AT&T continue to invest billions of dollars upgrading America's infrastructure, with the potential of creating thousands of new, good paying jobs and bringing the benefits of digital technologies to all Americans. We all agree that the next Administration will have a huge role to play in facilitating this transition. As the largest single user of telecommunications services, the Federal Government must be a leader, not a laggard, in embracing our communications infrastructure upgrade."