AT&T, Competitors Squabble Over Proposed IP Trials

By Josh Long

AT&T Inc. hopes that the Federal Communications Commission will authorize it to conduct network trials in the Deep South as part of a long-term strategy to phase out its traditional phone infrastructure.

But the Dallas-based telecommunications giant is facing resistance from competitors that partially rely on its network to serve customers.

The groundbreaking proposal entails offering only wireless and IP services to new customers in Carbon Hill, Ala. and Kings Point, Fla., and eventually upgrading traditional phone customers to an alternative technology.

With droves of customers abandoning legacy phone service in favor of such alternatives as mobile and voice over IP, maintaining a traditional network is expensive, AT&T has told the FCC. The communications world of the 21st century is evident in AT&T’s bottom line, with its wireless segment comprising more than half of annual revenue ($128.8 billion).

Meanwhile, more than 70 percent of consumers in AT&T’s 22-state territory have nixed POTS, otherwise known as plain old telephone service, and the phone giant is still losing traditional access lines to rivals, such as wireless, cable and VoIP providers.

“These trials will help the Commission understand the technological and policy dimensions of the TDM-to-IP transition and, in the process, identify the regularly reforms needed to promote consumer interests and preserve private incentives to upgrade America’s broadband infrastructure,” AT&T wrote in a 2012 filing submitted to the FCC.

Early this year, the FCC authorized companies to submit proposals for experiments to deliver IP-connected services. The communications regulator is seeking to balance its preference for technological innovation with the need to protect consumers and ensure competition and universal service.

In a statement accompanying the FCC’s order inviting companies to submit proposed trials, FCC Commissioner Jessica Rosenworcel cited the “blistering pace” at which “communications networks are changing.” For instance, she noted the number of switched access lines has plummeted from around 200 million at the turn of the millennium, to 96 million, while the number of VoIP lines has surged 80 percent since 2008, to 42 million.

The traditional telephone dates back to Alexander Graham Bell, who patented the device in 1876.

AT&T’s proposal to conduct the trials, which is undergoing FCC review, could set a precedent for a remnant of Old Ma Bell to retire its generations-old, copper-based infrastructure. AT&T has said it is seeking relief from burdensome and outdated regulations that effectively bar the company from retiring its time-division multiplexing (TDM)-based network in many states.

“Indeed, one of the great ironies of twenty-first-century telecommunications policy is that the Commission persists in treating ILECs as though 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 declared in the 2012 filing. 

The company hopes to shut down its entire legacy network by 2020 throughout its approximately 4,700 wire centers.

A number of telecommunications companies that rely on AT&T’s network for last-mile access to commercial buildings have questioned the impacts of the trials on their ability to service customers.

In an April 10 letter to the FCC, Cbeyond Communications, Integra Telecom, Level 3 Communications, tw telecom and the trade organization COMPTEL claimed AT&T’s proposal fails to ensure the trials will ensure “universal connectivity, consumer protection, public safety, reliability and competition.”

For instance, the companies said they lack sufficient details on the replacement services AT&T will offer wholesale customers during the experiment or the timeline for improvements to the replacement voice services that will be offered to business and residential customers.

“The proposal thus precludes wholesale customers from conducting the business planning necessary to serve their retail customers, including small and medium-sized businesses,” the companies declared through their attorneys. “It also fails to ensure that, consistent with the [FCC] Experiments Order, packet-based replacement inputs will be offered at rates, terms and conditions equivalent to those currently offered for TDM-based unbundled network elements and special access services.”

AT&T countered that its proposal complies with the FCC’s order, noting participation by wholesale carriers in the trials will be voluntary.

“No customer will be forced to migrate to alternative services or products, or to alter its current wholesale arrangements with AT&T,” the carrier declared in comments filed with the FCC that responded to competitors’ criticisms. “The UNEs and other wholesale services that currently are available in the wire centers will remain available there, at the same terms, conditions and rates — unless, of course, a customer that is purchasing such services on a commercial basis voluntarily negotiates a change to those terms, conditions or rates.”

Some critics of the trials, including XO Communications, contend they are too limited in scope to be helpful to the FCC, and raised a number of questions about them.

“The Commission should not consider approving any experiment until it can confirm that the experiment will provide valuable data not otherwise available from current marketplace activities,” XO wrote in April 10 comments submitted to FCC.

AT&T acknowledged it doesn’t have all the answers.

“But, that is the point of the trials AT&T has proposed — to provide a vehicle for identifying and addressing the very sorts of issues and concerns raised in the comments,” AT&T said. “Simply put, if we had all the answers, there would be no reason to conduct a trial.”

The FCC is expected to rule later this year, perhaps as soon as May or June, on whether to approve and/or modify AT&T’s trials. Iowa Network Services Inc., which is comprised of more than 150 locally owned companies providing fiber-optic technologies, also has proposed a TDM to IP trial.

If approved, phase one of AT&T’s experiment entails grandfathering in existing POTS customers and only offering wireless and IP-based services to new subscribers. AT&T said it will not begin the second phase – upgrading existing POTS customers to alternatives – until after the FCC has reviewed the first phase.

AT&T plans to offer 100 percent coverage to residents in Kings Point, Fla., a suburban wire center with a population density of 1,961 per square mile, where most residents are over 50 years old.

In Carbon Hill, a sparsely populated community in rural Alabama, AT&T intends to provide wireless and/or wireline broadband services to roughly 96 percent of living units. Companies that provide alternative voice and broadband services include Charter Communications, Dish Network, DirecTV, HughesNet, Sprint, T-Mobile and Verizon, AT&T said.

Joseph Lenski of Edison Media Research Inc. claimed wire centers in AT&T’s proposal fail to include sufficiently diverse geographic areas, population densities and climates to generate meaningful data. He also cited an absence of adequate information on the types of data that will be collected or the control groups that will be selected.

Others including CenturyLink have been supportive of AT&T’s trials. In comments filed on March 31 with FCC, CenturyLink asserted the proposal “focused on one of the critical challenges of the IP transition — how to manage the myriad technical and logistical issues entailed with actually converting defined geographical areas to IP.”