During its open meeting earlier this month the Federal Communications Commission laid out some of its first proposals regarding the “IP transition” — the effort by major telecommunications providers to replace aging copper wire networks with Internet protocol-based infrastructure like fiber. According to a former Bush administration official, those rules will unfairly benefit smaller competing providers without their own networks, while slowing the transition and its benefits to average consumers.
“This transition will ultimately bring consumers new technology, billions of dollars in new infrastructure, and faster and better broadband services and applications,” Bruce Mehlman, former assistant secretary of Commerce for tech policy during the last Bush administration, and co-founder of the Internet Innovation Alliance (IIA), a broadband lobbyist group, wrote in a Bloomberg op-ed last month.
According to Mehlman, “old monopoly-style telephone rules” recently proposed by FCC Chairman Tom Wheeler could slow that transition currently underway by major providers like Verizon and AT&T, while giving so-called “interconnection” providers — smaller providers that borrow existing networks to compete instead of building their own — unfair advantages that will ultimately slow the transition and its benefits to consumers.
“The question before the FCC is whether or not we continue to encourage investment in fiber and advanced services, with the incentive of lower regulation on these advanced infrastructures,” Mehlman told InsideSources. “Or whether we bring the anachronistic copper network regulations and import them into the fiber universe, which would be a big change, and would discourage investment.”
That investment is needed to satisfy Americans’ increasing demand for bandwidth-heavy services like audio and video streaming, with particular regard to mobile broadband.
In the 1996 Telecommunications Act the FCC concluded copper networks were still a necessary part of the U.S.’s communications infrastructure, and major telecommunications providers were obligated to maintain and share them with smaller competitors at a regulated rate.
Cable and wireless providers were omitted, and in the years after, investment in next-generation networks transitioned on a much larger scale to cable and wireless. In an attempt to spur cross-platform competition, the FCC incentivized providers to build out fiber networks by abstaining from regulating the rates for sharing fiber — a proposal dubbed “new wires, new rules” adopted at the turn of the century.
Investment exploded into fiber networks on such a scale that today, copper networks are hardly used. Now, many major providers looking to forego them completely — hence the IP or “tech transition.”
That’s bad news for many smaller providers throughout the U.S., who instead of investing in building out their own networks, rent copper infrastructure at fixed rates set by the FCC to serve entities like small businesses, schools, libraries, government facilities, health clinics, etc.
During the FCC’s open meeting in August, the commission gave providers the green light to discontinue maintaining and using copper networks and replacing them with fiber — so long as they give smaller competing providers currently renting copper six months notice before shutting them off, and offer “replacement services” at “rates, terms and conditions that are reasonably comparable to those of the legacy services.”
“Carriers will retain the flexibility to retire their copper networks in favor of fiber without prior commission approval — as long as no service is discontinued, reduced, or impaired,” the FCC said in a statement.
The interim measure will stay in place until the FCC takes time to examine the marketplace and vote on a permanent rulemaking.
Republican Commissioners Ajit Pai and Michael O’Rielly voted against the measure, arguing it would slow down the tech transition.
“It appears that Chicken Little rules the roost,” Pai said during the meeting. “As I warned nine months ago when we commenced this proceeding, lobbyists are claiming that the sky will fall if fresh fiber replaces aging twisted pairs of copper.”
“Corporate interests have told us these new services threaten their business models. Companies are seeking to force their competitors to keep spending money on networks that those competitors no longer want to maintain. Why? So that these companies can continue to use their competitors’ networks! To state the argument is to reveal its absurdity. But today the FCC has put the interests of these corporate middle-men over the welfare of consumers.”
The IIA, which represents AT&T and a handful of network equipment manufacturers and conservative tech lobbyists, agrees.
“As those old copper networks go away, they want regulators to extend the obligation to share with competitors to the fiber networks,” Mehlman said. “Which would make sense for them, but would not make sense if the societal goal were more robust networks with higher levels of investment in cross-platform competition.”
“You should not go back and re-regulate the fiber networks that were promised fewer regulations when they were deployed.”
Wheeler argues such regulations are necessary to shore-up competition and service.
“Changing technology does not change responsibility,” Wheeler said earlier this month. “Fiber brings great cost savings, great efficiencies, and great opportunities for new services. But it does not bring the opportunity to walk away from the responsibilities that govern the relationship between those who build and those who use the facilities.”
Public Knowledge, a liberal lobbist group vocal in recent years for pushing Wheeler and the FCC toward Title II net neutrality regulations, applauded the Democratic commissioners’ interim stance on the tech transition, and said further FCC intervention is necessary to ensure public institutions and communities aren’t left with behind in next-generation communications.
“The transition of our nation’s communications networks has been ongoing for years,” Chris Lewis, vice president for government affairs at Public Knowledge, said in a statement following the FCC’s August meeting. “Ultimately, these transitions will provide new innovative services to millions of Americans. However, the FCC’s actions today are important steps needed to ensure that as the network is upgraded, no Americans are left with a downgrade in their basic communications.”