FCC Will Support Industry to More Easily Retire Copper Networks: New Street
The current FCC is likely to support calls by USTelecom and its members for policies that allow carriers to more easily retire copper facilities in their networks (see 2501270047), New Street’s Blair Levin said Wednesday. FCC Chairman Brendan Carr “has always been in favor of assisting [incumbent local exchange carriers] in this transition,” he said in a note to investors.
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Levin cited Carr’s comments during a press conference after the commission’s February meeting (see 2502270040). “We need to find a way to create the incentives so that we can transition people to next-generation services and incentivize investment in new infrastructure,” Carr said at the time.
USTelecom also recently filed a petition seeking a change in FCC policy “that would facilitate retiring copper by allowing companies to discontinue voice services more easily,” Levin noted. Comments on the petition were due Monday, and so far, none have been filed. The petition requests a limited waiver of the “standalone” voice service requirements of the FCC’s “alternative options test,” Levin said. In addition, the petition argues that with "the state of the marketplace and consumers’ overwhelming adoption of and reliance on other technologies, particularly wireless, the waiver would reflect market realities and advance the test’s pro-deployment objective."
AT&T is “well on its way to facilitate its transition with a wireless voice substitute,” and the petition “would provide others, particularly mid-sized carriers, with the ability to turn off a stand-alone voice service where the voice service can be bundled and where there is good cell phone service,” Levin said. He noted that the states are likely to follow the FCC’s lead on copper retirements.
“One of the quiet issues faced by incumbent local exchange carriers is how to retire their aging, and, in today’s broadband market, inferior copper networks and their stand-alone voice services,” Levin said: “We expect the FCC to support steps to make it easier for incumbent local exchange carriers to make economic decisions to retire outdated networks and services. The [USTelecom] Petition is a modest but important step along that journey, and it has greater significance in terms of creating more attractive buying opportunities for those seeking to expand their fiber footprints.”
At a Deutsche Bank financial conference Tuesday, AT&T CFO Pascal Desroches said the company has “a copper network included in consumer wireline that is descaling and acting as a headwind to margins.” He predicted that AT&T will exit its copper network in the next five years.