FCC's Wheeler: IP transition is not a license to limit competition

DALLAS—FCC Chairman Tom Wheeler, like his commission colleagues, is a champion of the IP transition and the capabilities it will bring to service providers but wants to ensure it does not affect competition.

Tom Wheeler FCC Chairman

Wheeler

Speaking during the keynote session at the Comptel Plus Fall 2014 Convention and Expo in Dallas, Texas, Wheeler said that the transition to IP should be able to maintain key values such as access, public safety and national security.

"Interestingly, while the idea of tech transition trials was warmly embraced, there hasn't exactly been a land rush to put them in place," Wheeler said. "But we are looking forward to announcements of trials later this month. Let me be clear: Transitions to IP are not a license to limit competition."

Wheeler outlined that there are three elements they will have to address for competitive service providers serving businesses and consumers: last-mile network access, the future of existing copper and VoIP interconnection.

Last mile access has been a continual thorny issue since the dawn of the competitive industry emerged in the late '70s and '80s, but it has taken a new turn in recent years as incumbent telcos like AT&T have looked to eliminate long-term contracts on special access TDM-based circuits.

In December 2013, the FCC announced that it was halting AT&T's (NYSE: T) request to stop offering long-term contracts and the associated discounts on TDM-based special-access circuits it sells to CLECs and wireless operators. Following that action, the FCC's Wireline Competition Bureau began the process of reviewing data from ISPs and service providers on the state of the special-access market.

Having competitively priced special access services in place is essential so CLECs such as tw telecom and XO Communications can offer specialized services to both their small to medium business (SMB) and even larger multi-site enterprise customers where they can't justify building out fiber.

Wheeler said that when more competitive providers roll out more compelling services, it drives incumbents to try to invest more in their network to offer similar services.

"When CLECs offer competitive services, it creates an incentive for incumbents to invest more in their networks and offer better services to win their share of business customers," Wheeler said. "This is good, and another example of the virtuous cycle of network innovation."

The commission's wireline bureau began collecting data to conduct what it says is a comprehensive market analysis of wholesale access to last-mile services. Interested parties have until December to submit comments and concerns about special access.

"The deadline for submitting this data is December," Wheeler said. "That means in 2015 we can dig deeply into critical questions. Where is competition working to encourage broadband deployment so that you can bring the power of high-speed broadband to your customers? Is regulation needed to constrain market power and, if so, where? And where should regulation be removed to incent innovation in a competitive market?"

Hand in hand with the special access concept is gaining access to existing copper plant. A growing number of CLECs and even ILECs over the past 10 years such as XO Communications, MegaPath and Windstream have leveraged the copper network to deliver higher speed Ethernet over existing copper facilities.

"It's easy to say that old-fashioned all-copper networks are obsolete, but for business and other enterprise customers, advances in copper technology can deliver high-speed broadband over those networks--especially over short distances, as is the case in serving business office parks and downtown buildings," Wheeler said. "Technological advances are making DSL a powerful means of supplying broadband in some places for some purposes, at a fraction of the cost, and the ubiquity of copper creates competitive opportunity."

While a number of service providers such as MegaPath have 100 Mbps EoC services, emerging standards such as G.Fast can enable speeds up or near 1 Gbps. BT (NYSE: BT) recently conducted a trial in Adastral Park where it was able to deliver up to 800 Mbps using prototype G.fast technology.

Wheeler said he's curious how U.S. service providers will leverage these new enhanced copper technologies.

"I look forward to seeing what U.S. providers are able to do with this technology," Wheeler said. "Innovative advances like these offer providers options for speeding broadband deployment widely and more economically. And they underscore the importance of not rejecting everything old in our rush to embrace the new."

That's not to say that Wheeler is against the ongoing transition to fiber. He cited Verizon's $23 billion FiOS buildout and the entry of new broadband competitors like Google Fiber (NASDAQ: GOOG).

While Wheeler does not intend to impede the service provider industry's rollout of fiber, he wants a policy in place that can properly address copper retirement and its overall impact.

"I intend to propose a series of measures to address these and related issues, while ensuring that incumbents and competitive providers alike are not held back in fiber deployment," Wheeler said. "Our goal should be to improve our copper retirement process to strengthen our core values, including competition." 

Another large part of the IP transition is the ability for service providers to interconnect VoIP in a native IP-based format.

AT&T and Sprint (NYSE: S) have been embroiled in a battle over VoIP interconnection in Michigan, for example. Incumbent telcos have required service providers exchanging VoIP traffic to convert it back to TDM.

In March, AT&T was told by the Michigan Public Service Commission (PSC) that it has to file an IP service interconnection agreement with Sprint.

Wheeler said that requiring competitors to convert VoIP calls to TDM could be damaging not only to the service providers, but also to consumers and businesses trying to conduct daily calls.

"Losing the benefits of IP technology through needless TDM conversion is an annoyance today," Wheeler said. "But when we move to an all-IP environment, an incumbent's refusal to interconnect in IP will be a crisis for consumers and workers who find they simply can't place calls to some of their friends, loved ones, business associates, and so on."

For more:
- see the speech

Related articles:
FCC begins special-access data-collection process, but competitive carriers want fair prices
FCC flooded with over 3M comments about net neutrality rules
FCC's Wheeler: Competition will drive new broadband speeds, availability
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