Telco Executives Spar on All-IP Interconnection Obligations

The long-brewing disagreement over how telcos should, in an all-Internet Protocol world, handle interconnection agreements erupted Friday at a panel of executives the Telecommunications Industry Association hosted before its public policy committee meeting in Arlington, Va. “I don’t think state commissions are going to have a role at all,” said AT&T Senior Vice President Bob Quinn, who judged the transition to still be in its early phases. In an age of predominant IP-enabled services, there will be fewer interconnection agreements and they will look very different, unhinged from an era when there were calls that were local and long distance, he said. “LATAs are largely irrelevant to the entire world now, let alone the IP world where they were never relevant."

But executives from tw telecom and XO Communications resisted AT&T’s interpretation and insisted states should have a role. They pushed for regulatory oversight of interconnection agreements, citing Section 251 of the Communications Act.

"Nobody thinks this is the Internet -- it’s not the same structure,” said tw telecom Vice President Kristie Ince. “When you're sending voice over IP, you've really got to be able to manage it.” Tw telecom backs a Section 251-style “regulatory backstop,” requiring incumbents to negotiate agreements on reasonable terms, she said. Ince framed the conversation as “large versus small.” State oversight of interconnection is “vital,” she said. “You can’t have competition without interconnection -- or last-mile access, for that matter.”

"The market power and leverage still favor the incumbents,” said XO Communications Vice President Lisa Youngers. The voice services of AT&T and Verizon don’t touch the public Internet, she added. “We still think there’s a state role under 251.”

As the transition approaches, the FCC is looking for proposals for how to conduct trials, and AT&T first proposed an IP transition trial last fall. It’s not appropriate to assume that a shift in protocol or technology will automatically mean more competition or a lesser FCC role, said FCC General Counsel Sean Lev, leader of its Technology Transitions Policy Task Force, during a later speech. These tests will be important and may help identify what regulatory changes are needed, he said, describing the FCC proceeding and upcoming comments cycle. “We look forward to seeing such detailed proposals.” Technology changes shouldn’t alter the FCC’s mission and responsibilities, he said. There’s “room for debate” on how rules should be tweaked, he said.

The FCC transition notice is “much broader” than what AT&T put forth, Youngers said. “It’s not just as proposed by one party -- that’s important.” AT&T proposed its trial with a focus on consumer issues, Quinn said, with specific questions about what would happen to parts of the telco’s footprint that may move from copper to wireless. “I don’t think interconnection is really implicated by the trial we have proposed,” he added. AT&T wants “a forum for everyone to raise their issues” in examining a shift in which “we don’t know what services are going to break,” he said. AT&T has 4,000 wire centers to convert and would prefer a model forward to develop through this trial, he said. Tw telecom is “not opposed” to trials, but wants “a strict set of parameters about how the trials will be conducted,” Ince said. XO is “not certain trials are needed,” Youngers said.

Lev brought up New York’s Fire Island, where Verizon is replacing Superstorm Sandy-damaged copper with fixed-wireless Voice Link on the island’s western half. He said he’s glad Verizon filed for Section 214 authority to discontinue its landline service in those devastated areas. But Voice Link seems to pose a “significant distinction” from traditional landline service in some ways, Lev said, citing how it may affect small businesses that can’t process credit cards. Fire Island is now “open for business” due to Voice Link, Verizon’s Young said during the earlier panel: “This is a solution that fortunately we had in the works.” Sandy forced Verizon to speed up its Voice Link plans, he said. But Voice Link is “a major paradigm shift” in which “you're shifting the burden on to the consumer,” said Jeff Cohen, chief counsel at the Association of Public-Safety Communications Officials, during a separate discussion, referring to the battery backup the Voice Link devices require. Without a focused IP trial, the Fire Island case may occur elsewhere “by necessity,” Quinn said.

"There’s a real struggle as to what the state role is,” Quinn said. “I think since the [FCC’s 2004] Vonage decision came out, there’s been a vacuum to figure out what the state role is.” He advocated for a state focus on consumer protection, while noting Skype may not want to confront dozens of different state authorities. During the transition, the state role “may depend on the choices their legislatures made,” Lev said, saying many states have rolled back carrier-of-last-resort obligations and other regulations. States will potentially play a role in next-generation 911, he said, noting the “historic” involvement those jurisdictions have had with 911. The FCC wants state involvement “consistent in the choices” state lawmakers have made, he said.