A Year in Review: The FCC and the U.S. Phone Transition (Part II)

In part I of this article, we looked at the Federal Communications Commission's fast start under Chairman Tom Wheeler to address the transition of the phone system from traditional, landline service over copper wires to a broadband- and wireless-based system. With other issues pressing for attention at the FCC, momentum slowed during the summer of 2014.

I. The Full Plate

As we noted in Part I, Tom Wheeler had a sense of the huge agenda the FCC faced even before his confirmation. In addition to the telephone transition, the FCC was charged with fashioning an auction that would incentivize television broadcasters to sell spectrum -- the first regulatory body to attempt that. The FCC would also have to continue work to promote universal access to broadband and diversify media ownership.

A funny thing happened on the way to the (telecommunications) forum, however. On January 14, the United States Court of Appeals for the District of Columbia Circuit struck down key elements of the FCC’s Open Internet rules (commonly known as net or network neutrality) which required broadband providers to treat all Internet traffic equally. During his confirmation process, Wheeler had also vowed to protect the open Internet. So he now had a new, major undertaking. Then, on February 13, Comcast announced it had entered into an agreement to buy Time Warner Cable for approximately $45 billion. The FCC would have to determine if the transaction is in the public interest. That announcement was followed by AT&T's agreement to buy DirecTV for about $48 billion. That transaction would also require FCC review.

The momentum on the telephone transition, to say the least, was interrupted.

I. The Reboot

At a convention of competitive communications service providers on October 6, Chairman Wheeler delivered a powerful message about the transition: “transitions to IP are not a license to limit competition.” He identified three keys to preserving network competition -- access to last-mile facilities, the future of copper networks, and VoIP interconnection.

“Communications policy has always agreed on one important concept,” he said, “the exercise of uncontrolled last-mile power is not in the public interest. This has not changed as a result of new technology. That is as true for businesses and other enterprise customers as it is for consumers. There is no choice between embracing technological change and protecting values.”

Although telephone companies may be eager to end support for their aging copper phone networks in favor of next-generation fiber optic cables that are much more profitable and come with fewer regulatory strings attached, Wheeler said recent advances in copper-based broadband technology mean it's too soon to kill off copper for good. "Our goal should be to improve our copper retirement process to strengthen our core values, including competition.” Wheeler promised to introduce measures to make sure the nation's copper infrastructure is phased out responsibly -- part of a series of principles aimed at keeping incumbent phone companies from trampling over smaller, competitive carriers in the dash toward greener fiber pastures. The FCC would ask whether incumbent carriers should sell their copper to competitive carriers rather than simply leaving the technology by the wayside. The agency would also explore what maintenance requirements, if any, should be imposed on copper cabling that does not get retired.

The next day, Wheeler delivered the Everett C. Parker Ethics in Telecommunications Lecture and said, “There are those who argue that the move from analog networks to IP networks changes the principles of the Network Compact. They are wrong. The form these responsibilities take may change in an IP world, but the principles do not -- and should never -- go away. While our principles remain constant in the face of change, our policies to protect those principles cannot. I believe that to serve the public interest government oversight must evolve to reflect changes in technology.”

The proximity of these two addresses led Public Knowledge’s Harold Feld to conclude:

1. Chairman Wheeler wanted to shift the FCC back into working on the IP Transition even though AT&T would not have its pilot project ready until the second half of 2015.
2. While the nature and form of regulation will change, the FCC will continue to play a critical role -- during the transition and after the transition -- both in promoting competition and protecting consumers.
3. That Network Compact Chairman Wheeler keeps talking about? He really means it. When he leaves the FCC, he wants to leave an agency that still protects network users under this fundamental set of values.

II. The Transition and 911 Service

Later in October, the FCC released findings that the transition to next-generation 911 (NG911) emergency services based on IP played a role in an outage that prevented people in seven states from being able to reach emergency dispatchers. The FCC followed up in November by proposing rules to preserve reliable 911 service. The FCC noted that technology transitions, including the move to IP-based networks, can vastly improve 911 calling and help first responders during emergencies. However these transitions also present potential new vulnerabilities to 911 service. The process of routing and completing a 911 call now often involves multiple companies, sometimes geographically remote from where the call is placed. Outsourcing and consolidation of critical 911 network infrastructure means that a single 911 outage can affect more people in more places than before, and can also complicate restoration efforts. The FCC adopted a Notice of Proposed Rulemaking (NPRM) asking for public comment on specific proposals in four key areas to set the nation on a path towards reversing the trend of large-scale 911 outages:

1. Requiring 911 providers to make public notification of major changes to 911 service, so that 911 call centers and other stakeholders are aware of potential impacts, and to seek approval if they intend to discontinue critical 911 services;
2. Requiring entities seeking to offer new 911 capabilities and services to certify that they have the technical and operational capability to do so reliably;
3. Clarifying roles to promote situational awareness, information sharing, and coordination among multiple service providers during 911 outages; and
4. Updating the FCC’s 911 reliability certification requirements to account for new technologies and network architectures.

Protecting Consumers’ Ability to Call 911 during a Power Outage
Separately, the FCC proposed to update rules ensuring access to public safety. As noted in Part I, traditional phone service on copper networks usually works even during broader power outages because the copper wires are powered separately by the phone company. While modern fiber and cable networks have many advantages, they do not provide power to the handset. Instead, during a power outage, consumers must rely on a battery back-up in their own homes.

Another NPRM:

• Proposes a framework to establish reasonable expectations for when providers should bear responsibility for providing a backup power solution for the communications equipment at a customer’s home during a power outage;
• Seeks comment on different back-up power technologies and solutions in the marketplace today; and
• Examines potential strategies for providing back-up power during lengthy commercial power failures.

III. Consumer Protection and Competition Rules

Also in November, the FCC proposed to update rules protecting consumers faced with network changes and discontinuation of services and preserving wholesale access to last-mile networks by competitive providers serving businesses and large institutions.

Increased Transparency to Empower and Protect Consumers During Transitions
While new networks can provide a wealth of innovative features, many consumers and small businesses rely on services that may not be supported following a transition. The expected frequency of network changes and discontinuances requires the FCC to modernize its rules regarding consumer notice and input in the event of network changes and discontinuances.

This NPRM:

• Proposes greater transparency, consumer protection, and opportunities for consumer input when carriers are planning to shut down (or “retire”) their existing copper networks;
• Sets in motion a process to ensure that new services meet the needs of consumers before carriers are allowed to remove legacy services from the marketplace;
• Asks for facts and data about whether carriers are, in effect, retiring copper networks without giving notice simply by failing to maintain them; and
• Asks about allegations that carriers are not being clear with consumers about the options available when the copper network is shut down.

Preserving and Encouraging Competition
Small and medium-sized businesses, schools, hospitals, and other government institutions often rely on services delivered by competitive broadband and phone providers. Yet competitive providers may no longer be able to reach customers if incumbent carriers withdraw certain “last mile” services.

The NPRM:

• Tentatively concludes that carriers seeking to discontinue a service used as a wholesale input should be required to provide competitive carriers equivalent wholesale access going forward; and
• Proposes to update the FCC’s rules so that competitive carriers receive sufficient notice of when copper networks are being shut off, so that they can continue to serve their customers effectively.

Declaratory Ruling
The FCC also adopted a Declaratory Ruling clarifying that the circumstances under which a carrier must seek approval to discontinue a service depend upon the practical impact of its actions, not the fine print of an aging tariff filing. This ensures that there will be a public process to evaluate a proposed discontinuance before a choice is removed from the market, regardless of how the carrier has written its tariff.

Concerning these actions, Chairman Wheeler said, “This is not a matter of old vs. new technologies. Rather, it concerns a simple question: as we reach the tipping point at which the older networks and services are turned off, will the transitions to the next generation networks benefit all Americans or will we allow some to fall through the cracks? I firmly believe that we can facilitate the transitions, even while ensuring that the benefits accrue to everyone.”

Conclusion

Taken on whole, the FCC’s work this year – bookended by the major actions in January and November – represent great progress in both learning about and staking out the public interest in the telephone transition. Much more work needs to be done. Much more than just a technological change, the FCC, in guiding this transition, still must ensure, to quote the Communications Act, “a rapid, efficient, Nationwide, and world-wide wire and radio communication service with adequate facilities at reasonable charges.” As noted above, this is no small task and neither one that can be rushed nor expected to happen on its own.

Further Reading:
The New Network Compact: Making the IP Transition Work for Vulnerable Communities (Benton Foundation)

A Brief Assessment of Engineering Issues Related to Trial Testing for IP Transition (Public Knowledge)

Consumers and the IP Transition: Communications patterns in the midst of technological change (Public Knowledge)

Disconnected: What the Phone System’s Digital Transition Will Mean for Consumers (The Greenlining Institute)