AT&T Pushes FCC to Lift Legacy Phone Regs

Says that is path to converged broadband-delivered video, voice, IP world that FCC seeks

By John Eggerton -- Broadcasting & Cable, 11/8/2012 10:30:44 AM

AT&T has asked the FCC to start the process of converting the country to the IP-based networks that can handle the merged video, voice and data distribution the commission has been pushing via its National Broadband Plan.

At the same time AT&T was announcing its $14 billion in investment in broadband infrastructure on Wednesday, the company asked the FCC to open a proceeding into removing regulations that require incumbent local exchange carriers (ILECs) to maintain legacy facilities and services even after it has deployed new, IP-based networks.

It points out that as the FCC migrates Universal Service Fund subsidies to those legacy facilities in high-cost, rural areas, it will be even harder for ILECs to maintain those legacy networks and the investments those regulations require to be put into redundant service .

AT&T says rules that discourage incumbents, and incumbents alone, from investing in new or upgraded IP networks are "irrational and counterproductive" and make no sense because they treat those incumbents as dominant providers in an IP-based broadband market that others lead.

"[O]ne of the great ironies of 21st century telecom policy is that the Commission persists in treating ILECs as thought they were still monopolists even though, in today's convergent broadband environment, they have been steadily losing ground to cable and wireless operators."

AT&T suggests that the FCC select some of the incumbents' systems as test beds for transitioning from legacy circuit-switched to next generation services.

Reacting to that FCC petition to launch the proceeding, industry analyst Larry Downes praised the move in Forbes Thursday, calling it is essentially the launch of "Internet Everywhere," which he defines as the "the final stage of convergence for old proprietary voice, video, and data networks to the open standards of a single IP network."

Competitors to AT&T were not about to strew flowers along the ILECs path to that convergent future.

"AT&T's announcement today that it needs regulatory intervention from the FCC in order to invest in IP technology is a re-run of a tired ploy to leverage the company's dominance," said the Broadband Coalition, comprising competitive carriers. "AT&T only invests in order to respond to competition, and competition is made possible by the very pro-competitive policies that AT&T seeks to eliminate."

"We already know that AT&T's claim that IP will somehow alter the laws of economics and lessen its dominance is patently false," said coalition spokesman and former Congressman Chip Pickering. " Clearly, AT&T's proposed changes are not necessary to achieve widespread IP deployment, but the retention of competition policy is."