Group challenges regs requiring phone companies to maintain copper networks

AT&T has asked the FCC to permit trials for a move to wireless and IP-only

As the battle between cable providers and traditional telephone companies continues before federal regulators in Washington, a report issued Tuesday challenged old regulations that require companies such as AT&T to maintain copper-based legacy networks.

The report by industry analyst and scholar Anna-Maria Kovacs was issued by the Internet Innovation Alliance (IIA), a diverse consortium of 175 organizations that advocates for widespread broadband adoption. The alliance includes large companies like AT&T, some smaller carriers and nonprofit groups.

Among its findings, Kovacs' 45-page report found that only 5% of the nation's households rely exclusively on circuit-switched voice telecommunications over copper wires (commonly called POTS, for Plain Old Telephone Service). Meanhwhile, 38% of households rely on wireless communications exclusively and the remainder rely on a combination of wired and wireless services that include voice over IP.

Cable and traditional phone companies are battling over the same set of customers for Internet services that include video, social networking service and much more. Traditional phone companies are concerned they can't compete fairly because of regulations that they must spend billions of dollars providing a traditional wired network that only offers voice and slower data services.

IIA Honorary Chairman Rick Boucher, a former congressman, said in a conference call introducing the report that federal regulations require incumbent telephone companies to maintain their entire circuit-switched networks, even as wireless and other technologies have evolved. More than half of the $154 billion spent by those companies from 2006 to 2011 went for this "outdated network" based on copper, he said.

"Cable, by contrast, is not burdened by these regulations," Boucher said. "Freeing up the telcos would allow them to build ... and [they] would be a more vibrant competitor to cable."

Boucher stressed in a statement that federal and state policymakers "must modernize policies and create a level playing field for all competitors to invest and innovate."

Kovacs said the purpose of her report was not to make recommendations although she did endorse industry trials to convert circuit-switched homes and businesses to all-IP networks that would take place "in a few small controlled areas where we can retreat back to old technology if we need to." The IP platform would not have to run over wireless only, she said, but could be built on fiber or something like AT&T's U-verse service, which runs mostly over fiber with some copper in the final stretch to a home or business.

Over the past year, AT&T has urged the FCC to allow it to conduct trials in two cities that haven't been named.

On Sept. 24, AT&T CEO Chairman Randall Stephenson urged the FCC to move faster on AT&T's request for trials. AT&T has set a goal to build an all-IP, all-wireless, all- cloud network nationwide by 2020.

The IIA said the Kovacs report was not funded by any single member of its broad-based group. The group of 175 members includes companies in the telecom manufacturing area such as Alcatel-Lucent, but AT&T is the only large incumbent carrier. Other members include the Americans for Tax Reform, the American Conservative Union, the Coalition on Black Civic Participation and Touched by an Angel Ministries.

Matt Wood, policy director of the public interest group Free Press, said the report and the IIA's position are headed toward urging government support of a wholesale deregulation of all communications providers. "There's room to talk about modernization in the industry, but not a race to the bottom where we deregulate everybody," he said in an interview.

Traditional carriers "should not be required to offer copper, but they should offer universal connectivity and interconnections with other carriers."

Wood said the FCC and state regulators should maintain a commitment to service all people and businesses under universal service principles that don't discriminate on where a person or business is located -- whether it is on a remote Indian-American territory or a West Virginia mountainside. Free Press also supports interconnection principles, which means that if a customer has Verizon Wireless service, Verizon must connect with other services such as AT&T.

"Principles like universal service, nondiscrimination and interconnection are not outdated legacies," Wood said. "They are the foundations for competition in a strong economy and free expression in a democracy. We can talk about modernizing and even eliminating special regulations, but can't toss out any of these bedrock principles or the FCC's authority to enforce them."

Boucher said the IIA does adhere to the principles that Free Press espoused. "Nobody is proposing a flash cut [to free up carriers], and it would happen over time," he said.

"A number of consumer values must be addressed and protected and no one left behind. Universal service must be preserved. Everyone should receive a service at least as good as [their] service today. Everyone will have continued access to 911 and access for the disabled would have to be preserved for the vision and hearing impaired. And there needs to be a place to make complaints. The FCC needs to conduct trials," Boucher said.

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Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is

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