The Internet Innovation Alliance (IIA), an industry advocacy group, says that the FCC's recent Further Notice of Proposed Rulemaking governing legacy copper and TDM-based networks to IP-based networks will cause more harm than benefit.
Bruce Mehlman, co-chairman of the Internet Innovation Alliance, told FierceTelecom in an interview that what's troublesome about the regulator's proposals is that it's a step backwards.
He said that competitive carriers should focus more of their attention on building their own network infrastructure versus trying to leverage existing facilities built by incumbent telcos.
"There are folks that have had a decade of notice that if they wanted more advanced structure they needed to be part of the solution of building network infrastructure, but they chose business models that were based on riding investments that were made by other folks," said Mehlman. "Everybody's has been notice for over a decade."
Citing the move by Google Fiber (NASDAQ: GOOG) to build out a new FTTH network infrastructure supporting 1 Gbps broadband and video services, Melhman added that "it seems like a mistake to offer a 'new wire, new rule' incentive to get all the investment you thought you would and then to say we're considering going to 'new wire, old rules.'"
Earlier this month, the FCC voted along party lines to approve a NPRM that it said will ensure consumers and businesses are not harmed as ILECs transition from legacy copper and TDM-based networks to IP-based networks.
The two pressing issues between ILECs like AT&T (NYSE: T) and Verizon (NYSE: VZ) and CLECs such as XO Communications are copper retirement and ensuring that competitive providers can get access to equivalently priced IP special access wholesale services.
On one hand, ILECs argue that being required to provide equivalently priced IP-based special access services that they offer over TDM today will impede their transition. CenturyLink and Verizon wrote in recent FCC filings that these rules should only apply to DS1 and DS3 services and not commercial services like Ethernet.
Telcos maintain that the requests by competitive providers like XO to ask for an extended period of notification of copper retirement will delay their deployment of fiber.
While many CLECs like Windstream and XO are aggressively building out their own fiber networks, the reality is that they can't build out or replicate the ubiquity of the ILEC's network to reach all of the business locations they serve.
Mehlman said that while the model of CLECs using wholesale services to build a service model initially worked as a way to open up competition, they should focus their attention on building their own networks.
"If we were running a CLEC and the model was that we don't want to spend money on infrastructure that was a business model that worked for a long time," Mehlman said. "Over the last decade as the 'new wire, new rule' policy encouraged infrastructure builders to build the infrastructure we need for the Internet that we got and want, those folks had to either conclude to ride it or they want to invest."
Mehlman pointed to how Verizon has been shutting down copper networks and selling off parts of its legacy network to other providers, saying it shows that ILECs don't want to be burdened by regulations in transitioning to fiber and IP.
"The more we impose these regulatory obligations you got to carry a lot of people along, the fewer people will invest in the networks we want," Mehlman said.
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