A Personal Note

Posted by: Joan Marsh on October 3, 2016 at 1:39 pm

This week, I am privileged to take over leadership of AT&T’s Federal Regulatory team in AT&T’s DC office. I take the reins from my mentor, boss and friend, Bob Quinn, as he rises to succeed Jim Cicconi, who leaves us for the next chapter of his life and a richly-deserved retirement.

This opportunity comes to me at an important inflection point for our company, our industry and our country. We are on the precipice of a Presidential election that will, in all events, herald change during a time when communications companies are increasingly scrutinized through the lens of a dated regulatory code that is more and more untethered from the realities of today’s modern networks. We have moved well beyond trying to fit a square regulatory peg into a round regulatory hole to fundamental questions about whether pegs and holes are an adequate regulatory framework at all.

While I don’t know what issues will dominate the regulatory stage next year, I plan to proceed in my new role consistent with the high standards established by Jim and Bob – to engage in honest and fact-based debate, to listen in good faith to opposing viewpoints and to seek consensus wherever it can be found. Indeed, my many years of experience in DC teaches that the best solutions are often found not in the throes of a regulatory battle, but instead through collaboration and reasoned discussions with those most impacted by regulatory shifts. It was through collaboration that we unlocked the value of the WCS band that had been mired for a decade in regulatory limbo, that we found a workable and effective framework for improving wireless 911 location accuracy and that we resolved long-standing disputes around interoperability.

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The Next Logical Step in
Intercarrier Comp Reform

Posted by: AT&T Blog Team on October 3, 2016 at 10:42 am

By Matt Nodine, AT&T Assistant Vice President of Federal Regulatory

Turning around an aircraft carrier, if done correctly, takes lead time, requires great care and precision, and depends on a large crew with a variety of skills, all working together in harmony for a common cause.

Intercarrier compensation reform (ICC) is one such ship. Wisely, the FCC began this turn in 2011 with terminating access reform, working with a broad cross-section of industry, consumer groups and policymakers to decisively steer industry away from the arbitrage and schemes of unscrupulous actors, and toward what it termed “market discipline.” With the FCC’s course set, industry charted its path toward greater competition.

Now that we are several years into the FCC’s reforms, it is time to review the state of the marketplace, assess prior reforms, identify weaknesses and address next steps. With our petition for forbearance, which we filed Friday, the FCC can begin the next phase of reform we believe will benefit consumers, increase broadband investment and improve competition.

First, some background. In the 2011 USF/ICC Transformation Order, the FCC did its work well by adopting a regulatory regime that determined that a “uniform national bill-and-keep framework” would be the “ultimate end state” for all telecommunications traffic between carriers. The FCC’s action addressed some of the worst aspects of access arbitrage on the terminating access side, including what the Commission described as “access stimulation.” These so-called “traffic pumpers,” who consistently game the system to grossly inflate providers’ costs – and consumers’ bills – by hundreds of millions of dollars annually, were finally constrained. For many carriers, terminating end office switching rates complete the bill-and-keep transition on July 1, 2017.

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AT&T Statement on FCC’s Decision to Delay Vote on Set-Top Box Proposal

Posted by: AT&T Blog Team on September 29, 2016 at 12:06 pm

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

“In light of the limited information that has been publicly disclosed, AT&T supports the call for additional review and public comment on the FCC’s modified set-top box proposal. We have always said that this complicated technology mandate is unnecessary given the rapidly expanding applications-based marketplace.  No FCC proceeding in recent years has drawn more unified opposition and bipartisan expressions of concern. Important questions remain about the scope of the FCC’s authority as well as the complex framework proposed in this item, and about the significant impact it could have on existing statutory privacy, copyright and licensing protections.  These concerns all suggest that this proposal needs to be brought from the back rooms of the FCC into the sunlight to ensure that consumers continue to receive the innovative video products the marketplace has already been delivering.”

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Failing to Pass the Straight-Face Test

Posted by: Hank Hultquist on September 13, 2016 at 1:56 pm

Yesterday, AT&T filed comments with the Office of Management and Budget on the FCC’s woefully deficient analysis of the burdens associated with the so-called enhanced transparency requirements adopted in the 2015 Open Internet Order (OIO). The Commission’s analysis evinces a complete disregard for its responsibilities under the Paperwork Reduction Act. The FCC has not specifically identified the things Internet service providers (ISPs) must do to comply with the new transparency requirements; it has not separately estimated the burden of each requirement; it has not explained the benefits that would justify these requirements; and its lowball estimate of the overall costs is absurd on its face.

By way of background, the PRA requires agencies like the FCC to minimize the burden of required data collections. The FCC must obtain approval from OMB before any such collection can take effect. In this case, the FCC has had ample time to undertake a thorough analysis of the paperwork burdens of the OIO, yet has submitted a superficial, conclusory and slipshod analysis that OMB should reject. The treatment of just one of the new requirements, disclosure of packet loss, demonstrates the inadequacy of the FCC’s analysis.

To comply with the new transparency requirements, wireless providers will have to measure something they have not been required to measure or report previously (packet loss), in geographic areas where they do not currently take any similar performance measurements and may not have previously measured, and during undefined “peak hour” time periods. For AT&T, compliance with this requirement would cost far more than the FCC is estimating. Indeed, it could very well cost AT&T alone more than what the FCC has estimated for the entire industry to comply with all of the FCC’s transparency requirements because it could require extensive additional drive testing at a cost of many millions of dollars each year. Yet the FCC has estimated that the burden to the entire industry of all its transparency requirements, included those adopted in 2010, is only $640,000.

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Lies, Damn Lies, and Statistics

Posted by: AT&T Blog Team on September 12, 2016 at 11:35 am

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

As former British Prime Minister Benjamin Disraeli famously said, “There are three kinds of lies: lies, damned lies, and statistics.” Statistics are particularly concerning when they’re taken out of context or used to prop up policies which the body of the larger economic analysis would not support. When it comes to the Commission’s analysis of the Business Data Services market, basing policies on a handful of outlier statistical results while ignoring the weight of the evidence and the data’s deep-seated flaws would result in a disastrous outcome for broadband investment.

Over the past several months, the FCC – first through its hired economist, and later through Staff – has released over 100 regressions that purport to analyze the data the Commission has collected about the Business Data Services market. Each time, the FCC announced that the regressions show that ILECs retain market power for legacy DS1 and DS3 services. Each time, economists, including those the FCC asked to conduct peer reviews of the FCC regressions, observed that the regressions suffer from significant flaws that render them unreliable, including the severe correlation/causation problem that economists refer to as “endogeneity,” incomplete and incorrect data on pricing and the number of competitors, mismatches in the pricing and competitor data, and incorrect methods for computing the statistical significance of the results. And each time, we noted that some of the most significant of these flaws are not fixable because of the limitations of the data available to the FCC’s economists.

Undeterred, FCC Staff released yet another set of regressions in late August. These regressions address one of the problems with the earlier regressions – the flawed method for determining statistical significance. As a result of that correction, many of the prior results purportedly demonstrating the presence of market power in legacy DS1s and DS3s fell by the wayside. Those results now show nothing of the sort. But, no less important, as explained in a white paper filed last week by Drs. Israel, Rubinfeld, and Woroch, the revised regressions do not address the core, foundational flaws that continue to plague the entire exercise. Because of these deep-seated flaws, the regressions continue to produce wildly inconsistent and often anomalous results that in many cases conflict with basic economics. These erratic results confirm that the endogeneity and other data-related flaws are dominating the regressions, and thus they cannot be used to support any conclusions about ILEC market power for DS1s and DS3s.    

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