Critical of CAF in the 10th Circuit

Posted by: Hank Hultquist on November 20, 2013 at 11:42 am

Yesterday, more than two years after the FCC adopted transformational reforms of universal service and intercarrier compensation, critics of that order (which include AT&T on a single, discrete intercarrier compensation issue) finally had their day in court. And by all reports it was a long and exhausting day with more than two dozen lawyers arguing a host of issues.

It should not be surprising to anyone in telecom that this order has drawn appeals on so many different issues. This order represents perhaps the most significant step taken to date by the FCC to reform an outdated system of explicit and implicit subsidies to promote universal voice service, and replace it with a system of limited explicit subsidies to promote universal broadband service.

Of all the arguments being made in Denver, the one that is most threatening to the ability of the FCC to do its job leading the historic transition to broadband, IP networks (i.e., the job laid out by Chairman Wheeler yesterday), is the claim by some parties (most prominently C-Spire and US Cellular) that the FCC has no authority to use universal service to promote broadband. This argument, if accepted by the court, threatens the entire project of updating universal service for the broadband era. These parties, in effect, are trying to derail a process that was first outlined in the National Broadband Plan and then set in motion by this order. Early reports indicate that the judges were skeptical of this argument, though one can never put too much weight on what’s said in oral argument.

I don’t think, in the long run, these agents of stasis can succeed. The consensus in the telecom world that universal service should be used to bring broadband to high-cost areas is almost overwhelming. I believe that even if the court were to accept the argument of the agents of stasis, there would be bipartisan support to reverse such a decision through legislation. I hope such legislation does not become necessary.

In case you were interested, these are the parties arguing that the statute flatly prohibits the use of universal service support for broadband.

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AT&T Statement on FCC Chairman Wheeler’s Move to Begin IP Trials

Posted by: Jim Cicconi on November 19, 2013 at 4:05 pm

Today, FCC Chairman Tom Wheeler is directing the FCC staff to draft an order commencing geographic trials for the transition from aging communication platforms and services to new services based fully on Internet Protocol (“IP”). The following statement may be attributed to AT&T’s Senior Executive Vice President of External and Legislative Affairs, Jim Cicconi:

“We congratulate Chairman Wheeler for his leadership and vision. Today’s action is a significant step forward for the industry. But, importantly, as you can see from Chairman Wheeler’s blog, it is also critical for American consumers.

“Our current infrastructure has served us well for almost a century but it no longer meets the needs of America’s consumers. The transition to broadband and IP services that has already begun is driven by consumers who are moving to the Internet and choosing to connect in ways not imagined just a decade ago. Like any change it requires planning. The geographic trials directed by Chairman Wheeler will provide the real world answers needed to ensure a seamless transition. We’re committed to work closely and constructively with the FCC and with all stakeholders to ensure this process succeeds and the goals set forth in the National Broadband Plan are achieved.”

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TOPICS: FCC, IP Transition
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So, Why is there No Rural Email Completion Problem?

Posted by: Hank Hultquist on November 18, 2013 at 11:37 am

Just over a week ago, the FCC released an order intended to try and improve the rate at which long distance calls to rural areas are completed. That led to a somewhat cryptic tweet on which I now expand. (In today’s blog “email” is playing the role of Internet traffic in general.)

Have you heard the one about the five policy wonks who couldn’t agree on why there’s no rural email completion problem? The wireless guy challenged the premise of the question by arguing that it would only be an interesting question if the rural call completion problem actually existed. The ILEC guy said that of course there’s a rural email completion problem (that problem being that the ILEC is not getting paid to complete them). The Internet guy said that as long as there’s net neutrality, the end-to-end principle ensures that there can be no rural email completion problem. The right-wing think tank guy said that the free market prevents the emergence of a rural email completion problem. And the public interest guy said that even if there is no rural email completion problem, which he did not concede, the FCC should adopt rules to prohibit it. Ba dump bump!

But seriously folks, why is there no rural email completion problem? You’re probably expecting me to say that it’s because peering is unregulated, or because there’s no intercarrier compensation for email, or because email providers lack market power. And while all of those are true and important, I’d like to focus on a more fundamental distinction between the public switched telephone network (PSTN) and the Internet – the fact that there’s no such thing as “local Internet service.”

For a very long time (and to some extent even to this day), the voice world distinguished between “local exchange service” and “long distance service,” largely because they were regulatorily-driven constructs. The domain of the local service provider was required to end at some specific geographic point. It might be the exchange boundary, or maybe the LATA, or maybe even at a tandem switch. In any case, at that point responsibility for the transmission of a call, in either direction, passed from the local exchange carrier to the long distance carrier, or interexchange carrier (IXC). As a consequence of this distinction, long distance carriers became financially responsible for the transport path between rural exchanges and the rest of the PSTN.

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An Interesting Auction Down Under

Posted by: Joan Marsh on November 6, 2013 at 1:03 pm

Last week, T-Mobile, through its outside counsel, submitted into the incentive auction proceeding information about auction rules recently adopted in New Zealand.  Specifically, in connection with its 700 MHz auction that will offer 90 MHz of paired spectrum in nine 5 x 2 MHz blocks, the New Zealand Ministry for Communications and Information Technology ruled that no bidder would be permitted to acquire more than 15 x 2 MHz, or three 5 x 2 MHz blocks (or 1/3 of the 90 MHz available at auction). 

Although T-Mobile’s counsel submitted this information into the record, the contrasts between the even-handed approach taken in New Zealand and T-Mobile’s Dynamic Market Proposal could not be more stark. 

First, T-Mobile seeks a limit on all low band spectrum holdings, not just the spectrum newly available at auction.  New Zealand crafted generally applicable limits that apply only to the spectrum being sold.

Second, T-Mobile’s approach would skew the auction in its favor by limiting only those bidders that exceed its newly-proposed low band cap – namely AT&T and Verizon Wireless.  By contrast, New Zealand’s approach treats all bidders equally by imposing a limit on the amount of spectrum any one bidder can acquire.  In other words, while New Zealand’s approach would ensure that no one carrier could obtain all of the available spectrum at auction, T-Mobile’s proposal would allow a carrier like T-Mobile to do exactly that.

Finally, the limits proposed by T-Mobile would gate the disadvantaged bidders, in the first instance, to a single 5 x 2 MHz block – an amount that T-Mobile itself admits is not enough for an efficient LTE deployment.  New Zealand, on the other, permits all bidders to achieve up to 15 x 2 MHz position, which would allow for efficient deployment of LTE technologies.

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A Word about Chairwoman Clyburn

Posted by: Jim Cicconi on November 4, 2013 at 2:15 pm

There’s a lot of excitement today about a new FCC Chairman being sworn in, and rightly so. But there’s a unique Washington aspect to such occasions: I learned long ago that this town pays a lot more attention to the new arrivals than it does the recently departed. So, in the spirit of the day, I thought I’d take a moment to add another reason for excitement, and that is the record of Commissioner Mignon Clyburn during the five-plus months she led the FCC as its Interim Chair.

Many moons ago I spent a bit of time in government, and I learned that one of the toughest and most thankless jobs is to be named interim head of an important agency. The overarching impulse is to be a caretaker given the many uncertainties, not least of which is how much time you’ll have in the post. The Interim Chair position at the FCC is especially difficult. There are legal requirements and timelines. And sometimes you’re handed a monumental task that defines your tenure, like when Interim Chair Michael Copps had to oversee a successful transition from analog to digital television. While Chairwoman Clyburn didn’t have a digital television transition to tackle, she faced a number of formidable tasks. And looking back on those five-plus months, anyone familiar with the FCC has to be impressed by how much Chairwoman Clyburn accomplished.

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