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Any Telecom Act makeover should be done with care

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Sean Buckley, FierceTelecomTwo House Republicans are calling on lawmakers to revamp the 1996 Telecom Act to better reflect the realities the communications industry is seeing in today's broadband and wireless era. But exactly what changes they want to make are not clear. Energy & Commerce Committee Chairman Fred Upton (R-Mich.) and Communications Subcommittee Chairman Greg Walden (R-Ore.) outlined their ideas during a Google Hangout event on Tuesday.

As both of these congressmen point out, a lot has changed since the statute was signed into law by then-president Bill Clinton in 1996.

Take Internet access. In 1996, surfing the World Wide Web was done with dial-up modems that could scale to 56 Kbps. Today, consumers can access the Web at speeds of 1 Mbps to 1 Gbps. This has enabled users to access a host of bandwidth hungry over the top (OTT) services such as Netflix (Nasdaq: NFLX) that provide consumers all the video content they want for a monthly fee.

The call to reform the act comes during a transitional time at the FCC. Former CTIA lobbyist Tom Wheeler became the regulator's new chairman in November and will play a large role in the process.

Both Wheeler and these Congressional leaders will grapple with three issues: net neutrality, the IP network transition, and special access reform.

Under former Chairman Julius Genachowski, the regulator's net neutrality plan in 2010 reclassified broadband as a Title I information service under the Act to a Title II common-carrier service, while agreeing to not impose the same rules that govern traditional landline telephone services. A key debate, which will continue with Wheeler at the helm, centers on how much authority the FCC has to regulate broadband systems under the 1996 Act.

After announcing the call for trials last November, Wheeler cited the TDM-to-IP migration as one of his key priorities. Calling it the Fourth Network Revolution, he proposed the regulator put out an order addressing the matter at its upcoming meeting in January.

The FCC will have to weigh the impact that transition experiments by carriers like AT&T (NYSE: T) would have on consumers and businesses. Jim Cicconi, senior executive vice president for external and legislative affairs at AT&T, has continually expressed frustration over the slow pace of change, but said of the IP transition, "Like any change it requires planning."

Hand in hand with the IP transition is how to handle TDM-based special access.

AT&T's proposal to eliminate long-term contracts on special access circuits has drawn fire from a number of CLECs that argue it is nothing more than the carrier abusing its dominant position in the market. Despite having built out sizeable fiber-based networks to serve business customers, the reality for competitive providers is that they can't reach every location economically with fiber, so they need to rent facilities from large carriers like AT&T.

The telco said that its initiative to transition its network to all-IP justifies its move. However, Windstream (Nasdaq: WIN), which has a sizeable network reach and operates as an ILEC and CLEC, argues that AT&T does not offer a similar service to address lower speed service needs for single site customers.

"In many cases, it is not economically feasible for Windstream, or any other competitive provider, to extend its non-incumbent facilities over the "last-mile," especially when addressing single-tenant buildings," wrote Eric Einhorn, senior VP of government affairs for Windstream, in a letter to the FCC.

Regardless of the debate between CLECs and ILECs, the real implications won't be felt until the FCC renders a decision.

Congressional leaders have set 2015 as the year to get these revisions done. While it's clear the statute is in need of being updated to reflect the realities of today's telecom industry, I agree with Rep. John Dingell (D-Mich.) that it should be done with great care.--Sean