BT Overreach: Stale Data
Yield Rotten Results

Posted by: AT&T Blog Team on March 29, 2016 at 9:41 am

 By Rich Clarke, AT&T Assistant Vice President of Public Policy 

BT Americas (BTA) has repeatedly beseeched the Federal Communications Commission (FCC) to revoke its regulatory flexibility granted to DS1 and DS3 special access – and now argues that all U.S. Ethernet services should be similarly regulated if they are to perform as well as those in Europe. Further, BTA often asserts that the performance of its Openreach subsidiary supplying special access services in the UK is far superior to U.S. performance.  While BTA’s past claims have been repeatedly refuted by AT&T, its recent Reply Comments introduce a new “study” purchased from European telecom consultancy, WIK. This study argues that Ethernet prices are distinctly higher in the U.S. than in Europe, and that this unhappy state is due a lack of competition and competent regulation in the U.S.  A little detective work shows these claims about Ethernet to be as fanciful an overreach as BTA’s prior claims about DS1 and DS3 services.

WIK’s February 2016 report presents two sets of Ethernet price “data.” The first comes from another consultancy, Ovum, and dates from August 2013. WIK uses these Ovum (2013) data to estimate Ethernet prices for the U.S., the UK, France, Germany and the Netherlands.  Based on this comparison, BTA and WIK conclude that Ethernet prices are higher in the U.S., and that Ethernet adoption is lagging in the U.S.

When drawing this conclusion, it is unfortunate that BTA and WIK apparently were unaware that on Sept. 28, 2015 Ovum published an update to its 2013 report. Examination of Ovum’s 2015 report reveals major changes in the Ethernet market over the intervening two years.  In 2013, Ovum reported U.S. prices for 1G metro Ethernet to be $31,060 per year.  Just two years later, this price had dropped by 36% and was $19,879.  Declines in U.S. 10G service prices were even greater – dropping by nearly 58% from $61,237 in 2013 to $25,873 in 2015.  But even more telling, Ovum’s 2015 report projects that by the 2018-20 period, U.S. prices for 1G and 10G Ethernet service will be no higher (and sometimes significantly cheaper) than the prices from the four European champions that WIK selects as comparators to the entire U.S.  Further, over the 2015-20 time period, Ovum (2015) projects that U.S. metro Ethernet lines will grow at a compounded annual rate of 16.9%, while the four-country European growth rate will be only 9.2%.  The moral here, if you rely on stale data, expect rotten results.

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Something Amiss in Washington

Posted by: AT&T Blog Team on March 24, 2016 at 9:38 am

By Len Cali, AT&T Senior Vice President of Global Public Policy

Last week, I had the privilege of participating in the Digital Economy: Chances and Challenges conference in Prague. The Czech national regulatory authority, Česky telekomunikační úrad (“CTU”), under the leadership of Chairman Jaromir Novak, organized the conference jointly with ICANN.

The gathering offered me an opportunity to share AT&T’s view on innovation and regulation. Even more importantly, it allowed me to learn firsthand what policymakers and industry stakeholders are doing and thinking in eastern Europe. It should be no surprise that in this vibrant and technically sophisticated region of the world, much is underway with respect to smart cities, the transition to next generation networks, and extending broadband to all citizens.

Nonetheless, I was surprised to learn that Croatia has already completed the transition to an all-IP network and shut down its legacy PSTN central offices.  I was also impressed by the cutting edge work being done in Slovenia around innovative fixed wireless broadband technologies and services.  Most encouraging of all, I found many policymakers looking forward, aiming to safeguard consumer interests and address the challenges of the 21st century without looking backward or trying to pick winners and losers in the marketplace.

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CLEC End Game is
Ethernet Re-Regulation

Posted by: AT&T Blog Team on March 16, 2016 at 9:01 am

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

There’s no question that copper-based TDM services are in rapid decline.  AT&T’s access lines (copper last mile connections) are no exception – they have declined by almost 65% (more than 30 million lines, if you can believe it) since 2009.

Yet, despite all the evidence pointing to the end of the copper era, the competitive local exchange carriers (CLECs) seem hell bent on championing the imposition of greater regulation on quickly disappearing copper-based TDM special access services.  On its face, this appears to be a peculiar use of energy, resources, and political capital.  And, sure enough, recent statements by the CLECs participating in this proceeding confirm that their agenda has changed.  Notwithstanding that this proceeding was initiated to address the regulatory status of TDM services, CLECs are now asking the Commission to take a sharp left turn and use this proceeding to impose old fashioned, monopoly-era rate regulation on incumbent local exchange carriers’ (ILECs’) last mile fiber Ethernet connections.

If the Commission wants to consider that change, of course, it would have to initiate a new proceeding that tees up that issue; it cannot simply bootstrap that issue into a proceeding about TDM services.  But even then, undoing the FCC’s grant of forbearance for fiber Ethernet services now would be a very heavy lift. Forbearance was not designed to be an on/off switch that can be flipped at the Commission’s whim, but to provide permanent relief when regulations are no longer necessary.

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Lifeline is Headed in the
Right Direction (We Hope)

Posted by: Jim Cicconi on March 14, 2016 at 2:18 pm

The effort to modernize the troubled Lifeline program appears to be moving in the right direction.  AT&T has long supported the need to fix the program’s glaring administrative problems while allowing Lifeline eligible consumers to use their $9.25 discount on Internet access services. Last week, the FCC’s fact sheet outlined plans for a National Eligibility Verifier that should take eligibility decisions out of service providers’ hands, which truly has the potential to be a transformative change if properly implemented.  It could close the door on provider-initiated eligibility fraud and help re-focus the program on the consumers it was intended to serve.

What’s not clear in the fact sheet, however, is how long it will take before providers can stop performing all of these functions and whether the National Eligibility Verifier will take over any of the other administrative functions that providers are currently required to perform.  Our fingers will remain crossed until we see all the details, and we may not uncross until we get further down the road to implementation. But Chairman Wheeler and Commissioner Clyburn should be commended for championing this approach.

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TOPICS: Consumers, FCC, Lifeline
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Privacy Regulation:
Symmetry or Asymmetry?

Posted by: Bob Quinn on March 9, 2016 at 1:51 pm

Last week, the five associations representing virtually all wireline and (non-WISP) mobile ISPs submitted a joint proposal to the Federal Communications Commission (FCC) on how to address the implications of applying Section 222 to broadband Internet access in the wake of the FCC’s ill-advised 2015 Title II Order.  As the filing explains, ISPs do not currently live in a “regulatory-free zone” when it comes to privacy, nor are we asking to live in one in the future.  Prior to the FCC’s Order, wireline and mobile ISPs provided service in accordance with the Federal Trade Commission’s (FTC’s) privacy regime (which prohibits deceptive and unfair trade practices).  That regime also governed – and will continue to govern – the privacy practices of search providers, OS providers, browsers, apps, email providers and other tech companies who operate in the Internet ecosystem whether they collect and use customer data to provide services or to monetize that customer data  through advertising.

Under that regime, all major ISPs have enacted privacy policies which explain to consumers the information that ISPs collect and how that data is used.  At AT&T, we’ve continued to simplify our policy, including several years ago when we went to a single comprehensive privacy policy that describes plainly and simply the information we collect, how we collect it and how we use it.  I served several years as AT&T’s Chief Privacy Officer (until I was succeeded by Lori Fink, our current Chief Privacy Officer, last July) and can tell you first hand that we take customer privacy and how we communicate our polices to our customers seriously.

The FTC privacy regime presented a uniform approach to privacy that focused on customer transparency, disclosure and customer choice.  In fact, after the EU courts vacated the safe harbor provisions that had been in place governing data transfers between the U.S. and Europe, the U.S. Government went to great lengths to highlight to their EU counterparts that privacy enforcement by the FTC was equal to or stronger than privacy enforcement in Europe.  As privacy oversight for ISPs transfers from the FTC to the FCC as a direct result of the Title II Order, AT&T has and will continue to advocate for a framework that is based on the FTC approach.

Some groups, however, have argued that in fact the FCC needs to go much further than the current FTC framework in its treatment of ISPs. To get there, those groups have characterized ISPs as “gatekeepers,” asserted that ISPs (as opposed to companies like Google) are the real leaders of targeted advertising and, finally, argued that the Federal Trade Commission is, in essence, incompetent at policing privacy given the tools they have available.  With all due respect to those groups, their arguments are just not borne out by the facts. 

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