Telecom leaders, analysts debate IP transition regulations in Senate hearing

Industry executives and association leaders including Windstream's (Nasdaq: WIN) Jeff Gardner, COMPTEL's Jerry James, and NCTA's Shirley Bloomfield joined analyst Larry Downes and Public Knowledge's Gigi Sohn to testify Thursday in front of the Senate Commerce Committee in a hearing--the fourth in a series--on the impending transition off the traditional public switched telephone network (PSTN) to IP technologies.

Wireline senate hearing

(Left to right) Gardner, Bloomfield, James, Downes, and Sohn. (Screencap: U.S. Senate)

It was in every way a discussion about what's next for telecommunications. But the biggest issue lay in how much regulation, if any, should be created or revised as providers shift away from the PSTN.

While several topics were on the table--technology transition, FCC governance, rural access to voice and Internet services, the cord-cutting trend, and call completion problems--the question of maintaining competitiveness while continuing to both innovate and provide reliable services stayed at the forefront.

"We must create a pro competition industry for the IP era," said Gardner--also president of broadband advocacy organization US Telecom--who pointed out that wireless relies upon wireline technologies like backhaul. "The wireline network remains the linchpin. LTE (and other wireless technologies) all rely on robust wireline networks. Last year wireline networks handled 98 percent of total data traffic."

COMPTEL's Jerry James saw it as a simple technology transition. "This is not about the Internet, but just a different signaling protocol," he told the committee. The biggest issues from his organization's point of view are last-mile access and interconnection, but he felt that the current regulations, formulated in the 1996 Telecom Act, should continue to apply.

Analyst Downes said that regulating IP communications would stifle 15 years of rapid innovation and growth that have brought the industry to where it is. He said the FCC's proposed IP transition trials will answer many of the questions regulators and providers have about the migration.

"Many of those commenting (to the FCC) raise dramatic doomsday scenarios. But conducting the trials will make abundantly clear which (issues) are real and which aren't," he said. "Technology entrepreneurs believe the best solution to a technology problem is more technology. Not more regulation."

But Bloomfield and Sohn were deeply worried about the effect that nonregulated, competition-dependent IP services will have in rural areas that are typically underrepresented in these types of discussions.

"Some believe the transition should be a glidepath to eliminating FCC oversight," Sohn told the panel. Both she and Bloomfield pointed out that one of the worst problems for rural customers is dropped or incomplete phone calls.

On an IP-based network, latency or other issues sometimes trap calls and don't let them go through. "In a world ruled by competition, this doesn't get fixed," said Sohn, who said the FCC needs to enforce regulations on call completion while it still can.

Bloomfield said the "call completion epidemic" was part of several problems faced by rural carriers trying to navigate the Universal Service Fund, which is plagued by cuts, caps, and other restraints. She felt the FCC needs to review what is already in place for USF, and wait for an expected GAO report to be published, before making any more changes to the fund.

Sohn used the controversy raging around Verizon's (NYSE: VZ) Voice Link rollout on Fire Island, N.Y., as a prime example of the way critical services could be lost when transitioning to a new technology without thinking about its impact. She cited comments to the New York Public Service Commission from full-time island residents that outlined gaps in basic service on the Voice Link system, such as not being able to make emergency calls or get remote monitoring of pacemakers.

"These are not luxuries, they are necessities, and in many cases a matter of life or death," she said.

For more:
- watch the archived Senate hearing
- The Hill has this post

Related articles:
Voice Link isn't the magic bridge off the PSTN; broadband is
Frontier, FairPoint, others find new wholesale life with wireless backhaul
IP technology transition trials proposed by FCC met with mixed response