Verizon Yesterday versus Today:
New Wires, Old Rules?

Posted by: AT&T Blog Team on June 30, 2016 at 11:55 am

By Caroline Van Wie, AT&T Assistant Vice President of Federal Regulatory

As comments in the special access proceeding (oops, I mean Business Data Services proceeding) roll in, I thought I would put together a few sentences which accurately capture AT&T’s views on this proceeding:

“[T]here is no basis on which to increase regulation of ILEC business broadband services, including legacy special access and Ethernet.  [T]here is no evidence supporting a finding that ILEC rates for traditional TDM-based special access services (e.g., DS1 and DS3) are unjust and unreasonable.  There is no factual basis to support a finding of market power or market failure in the business broadband marketplace.  According to the Commission’s data, competitors have deployed networks capable of providing high-capacity services in all metropolitan areas throughout the country that contain concentrated demand for these services. Although the Commission’s data understate the extent of actual and potential competition, even with these shortcomings these data show competitors have deployed networks capable of providing high-capacity services in all metropolitan areas throughout the country that contain concentrated demand for these services. Despite these problems [with the 2013 data], the record confirms competitors have deployed facilities in large and small areas throughout the country — not only in downtown areas, but in all types of locations where there is concentrated demand for high-capacity services. The record also shows a wide range of providers and significant new entry, including from cable operators, and that different types of competitors are succeeding in this marketplace, using a wide array of high capacity services. Even  based on the outdated and incomplete record here, the evidence of competition where there is concentrated demand includes steadily declining retail prices; mass migration from legacy technologies (TDM) to new ones (Ethernet and broadband IP) that offer greater quality and value; disruptive facilities-based entry by cable companies; growing use of alternative technologies such as best-efforts broadband and fixed wireless; the continued growth of traditional CLECs; and the indisputable competitiveness of downstream markets, such as wireless, in which providers use business broadband services as an input.”

“[T]he record demonstrates the Commission’s analysis should include all forms of high-capacity services that customers are using to meet their needs, which includes not just legacy TDM-based special access services but also Ethernet services and best-efforts broadband services offered by cable.  For many customers, best-efforts broadband service provides a greater value proposition than dedicated services of comparable bandwidth, and the need for features such as ‘99.99 percent uptime,’ ‘the ability to prioritize traffic among different Quality of Service (‘QoS’) levels for different applications,’ and low jitter and latency is not worth the premium. Cable companies routinely market their best-efforts broadband services as an alternative to dedicated services such as DS1, and many business customers view them as competitive alternatives to legacy TDM-based dedicated services. . . .  The Commission cannot simply exclude best-efforts broadband services because they are not functionally identical to dedicated services.”

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Wireline Bureau BDS Document Dump

Posted by: AT&T Blog Team on June 29, 2016 at 4:21 pm

The following may be attributed to Bob Quinn, AT&T Senior Vice President of Federal Regulatory:

“For months, the FCC has been pushing aside the APA and due process in this proceeding. This is especially troubling when the policies the agency seems to be pursuing will have such a devastating impact on the incentives of all companies to invest in fiber infrastructure in the United States. Over and over, the Commission has modified and updated data that are supposed to be the foundation of its analysis without allowing parties sufficient time to adjust to the constantly moving target.  Yesterday, the Commission released the peer review responses to its third-party economist’s study (the study which constitutes the analytical core of its NPRM) two months after they were received by the Commission, and on the same day comments on the NPRM were due.  The Commission did this despite having assured all parties that it would release the peer review data when completed, which should have been two months ago.

“To put it another way, the FCC released an NPRM which it knew (at the time of release) was based on a study that peer review had determined was flawed. It then required the industry to file comments on that flawed study. And once comments were filed, the Commission performed a huge data dump on the industry (which we will now have to unpack and comment upon) containing these previously withheld peer reviews and additional analyses that purport to respond to them.  Moreover, instead of having their hired third party economist address the comments from his peers on his paper, the Commission assigned that task to the same FCC staff which will write the final rules in this proceeding.  This is completely unorthodox and defeats the entire purpose of having a third party study in the first place.

“Whatever the FCC’s excuse for delaying the release of this critical data, the lack of due process only reinforces that this agency is driving to reach a pre-ordained outcome. This is the very thing that is not supposed to happen under the Administrative Procedures Act.  Rather than arriving at a sound policy decision based on unbiased factual analysis, the Commission seems determined to once again put its thumb on the scale, picking winners and losers in the market based on their own arbitrary predetermined interests.  Further, the agency appears to be ignoring the Commission’s statutorily required processes in order to achieve that desired result.   Actions like this ultimately tarnish the agency’s reputation and leave the Commission open to claims that it is merely carrying out a politically motivated agenda rather than acting as an independent agency operating in accordance with the APA.  The FCC may be in a hurry to check every box on its agenda before January, but that in no way excuses the process abuses we are seeing.”

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AT&T Statement on FCC’s Outage Reporting Rules for Submarine Cables

Posted by: AT&T Blog Team on June 24, 2016 at 12:29 pm

The following may be attributed to Bob Quinn, AT&T Senior Vice President of Federal Regulatory:

“Submarine cable facilities have important national security and commercial implications.  For this reason, a coalition representing cable providers sought to give the FCC constructive input on a meaningful yet reasonable cable outage reporting framework.  Today’s order, however, perpetuates flawed assumptions from the recent Part 4 Order on terrestrial facilities – such as requiring outage reports for events that simply affect redundancy of service – and woefully underestimates the costs and burdens of compliance. These new regulatory requirements and deadlines will do little to enhance the resiliency of submarine cable facilities.

“Under this new regulatory regime, providers will be required to file an initial report within eight hours of determining that an outage is reportable, decreasing to four hours over time, and an interim report within 24 hours of receiving a cable repair plan.  International undersea cables, which are often jointly managed by a large number of companies from many different countries, extend from continent to continent and are not easily accessible.  The adopted intervals for the initial report are insufficient given the logistical issues associated with international operations and the significant amount of coordination necessary amongst companies. And changing the interval over time needlessly increases the costs and complexity of implementing the new requirements.

“Further, the order’s conclusion that these new reporting requirements be implemented within six months is unreasonable and disregards industry input.  Given the amount of coordination, and investments in new technology for older submarine cables necessary to implement a new reporting system, members of the industry had sought as much as 18 months to put the new framework in place.  AT&T anticipates that it will require much longer than six months for many of our submarine cables, which are older and jointly owned with multiple foreign partners.

“This new framework will impose substantial costs and burdens on providers without identifying corresponding benefits during times when the principal objective should be repairing the undersea cable facilities, not completing unnecessary and redundant reporting to the government.”

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Special Access Doublespeak

Posted by: Frank Simone on June 22, 2016 at 10:23 am

I’m often struck by the doublespeak that takes place in DC and, particularly, at the FCC when companies come to the agency to argue that the Commission should regulate their competitors. The Special Access proceeding at the Commission is one of those special dockets that is a real breeding ground for what I like to call “both sides of our mouth” (BSOM) advocacy.  Whether it’s Verizon calling to regulate its cable competitors, BT arguing for lower special access rates than it charges its competitors in England, or Sprint-progeny Windstream arguing to re-regulate everyone’s retail rates but their own, this proceeding is a showcase for that special brand of BSOM advocacy.

But one company truly rises above the rest when it comes to saying one thing to the FCC and another to investors – Sprint.  Not even two months ago, Sprint came to the FCC and argued that it has no choice but to purchase business broadband services from incumbent carriers because only they provide those connections for the vast majority of buildings with business data service (BDS) demand in the country.

Imagine my surprise then when I saw a recent Fierce Telecom article on Sprint’s Ethernet strategy. Once again, a Sprint executive’s candid statements reveal the reality that betrays their FCC advocacy. In the article, Sprint stated that cable business data services, specifically Ethernet over DOCSIS, will provide them with a competitive alternative to existing special access services and fill out an Ethernet footprint that covers “95 percent of the country.” Yet at the Commission, Sprint continues to discredit cable DOCSIS services as an alternative to incumbent carrier special access services.

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AT&T Statement on U.S. Court of Appeals Net Neutrality Decision

Posted by: AT&T Blog Team on June 14, 2016 at 11:04 am

The following may be attributed to David McAtee, AT&T Senior Executive Vice President and General Counsel:

“We have always expected this issue to be decided by the Supreme Court, and we look forward to participating in that appeal.”

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