The Big Phone News from the FCC

The Federal Communications Commission held its December open meeting this week. The headlines-grabbing news was the FCC’s move towards allowing people to use cellphones on planes. (And, yes, if you look past the headlines and the screaming Facebook posts, you’ll learn that the FCC actually initiated a proceeding to consider a proposal that would permit airlines to install equipment on aircraft that could safely expand the availability of in-flight mobile wireless services to passengers. So, right, a long way from getting you a seat next to a chatty cellphoner on a crowed plane. And, no worries, other regulators are stepping in to make sure no one ever talks around you.) Or maybe you noticed the news that cellphone carriers agreed to allow customers to unlock their phones when they want to switch providers. But the phone news we’d like to highlight is about your home, landline phone. There’s big plans to help it move into the digital era.

You may be wondering about all the fuss over a phone you and your family may rarely use anymore. The FCC recently released research that found that last year, about one in seven households with plain old telephone service delivered over copper wires dropped their landlines. And over the last four years, 33.6 million (or 43 percent) of American households with copper landlines gave them up. Many households – 42 million in 2012 alone – have decided to subscribe to voice-over-IP (VoIP) service and now over 40 percent of all landlines are VoIP. Incumbent telephone companies and their supporters say it makes no sense for them to sink more dollars into “legacy” networks when the future is in broadband infrastructure. But millions of people still rely on traditional phone service and the FCC is now in the beginning stages of what will be a years-long process to help the nation switch from the old telephone network to broadband. Many are calling this the IP, for Internet Protocol, transition.

Significant concerns are being raised whether IP-enabled technologies can deliver the type of services consumers have come to expect in an affordable, open and competitive way. While, in theory, IP transition trials are being designed to demonstrate that IP networks can deliver the services that current phone subscribers depend upon and to hasten access to tomorrow’s technologies, speeding up of the IP transition without clarity on these vital consumer protections is worrying many stakeholders and public interest advocates.

At the FCC’s December 12 meeting, the commission’s own Technology Transitions Policy Task Force gave a progress report on its work. The Task Force is charged with recommending to the full FCC how to conduct real-world experiments that would inform the commission about the many issues that need to dealt with if the transition is to be successful. The Task Force reported that its goal is to “understand the impact of technology transitions on consumers through diverse experiments and open-data initiatives." The Task Force aims to help the FCC:

• Act -- with speed -- to support technology transitions that will benefit consumers and the economy
• Learn -- through the diverse experiments and research that will yield the data necessary for fact-based Commission decision making
• Protect Enduring Values: 1) Public safety, 2) Universal access, 3) Competition, and 4) Consumer protection.

The FCC’s next open meeting is January 30, 2014 and, by that time, the Task Force will draft an order for FCC consideration that would:

• Invite, on a rolling basis, service-based experiments with short timelines for submission, establish criteria for experiments that focus on the impact on consumers, and create a speedy process for public comment and FCC evaluation
• Recommend FCC actions to support targeted experiments and research
• Describe structured observations and data collection initiatives
• Establish a timeline for the adoption of a managerial framework to resolve the important legal/policy questions raised by the technology transitions

The Task Force reported that, in public comment already received by the FCC, stakeholders have raised concerns about the consumer impact of the experiments including: 1) Public Safety, 2) Disabilities Access, 3) Critical infrastructure and federal operations, and 4) Service quality, reliability, and consumer protection.

On the accessibility front, FCC Chairman Tom Wheeler and the National Institute on Aging (NIA) Deputy Director Dr. Marie A. Bernard signed an agreement to partner on research into the use of modern IP technology to improve and make more accessible phone service to Americans who are deaf, deaf-blind, or hard of hearing. Under the joint agreement, the FCC will collaborate with the NIA to develop and support research plans for assessing IP technologies that can benefit older adults with hearing disabilities or deafness. Such benefits could be incorporated into the FCC’s Interstate Telecommunications Relay Services (TRS) program, which enables people with disabilities to do what most Americans take for granted: make a simple phone call. The interagency Memorandum of Understanding establishes guidelines for the two agencies to work together on objective, rigorous research into the current and anticipated use of IP-based relay technologies to provide service to people who are deaf, deaf-blind and hard of hearing. Specifically, the research plans will assess and evaluate the effectiveness, efficiency and consumer response to current and future approaches to delivering TRS, including automated speech-to-text and video plus automated speech-to-text technologies.

Reaction to the FCC presentation was generally positive. We saw press releases from USTelecom, COMPTEL, and AT&T which thanked the FCC for the steps taken on December 12. Public interest advocates Public Knowledge, Free Press and the Benton Foundation also saluted the FCC, but were all quick to raise concerns about how best to make sure the transition benefits all Americans.

In addition, The Greenlining Institute released a report this week examining the IP transition from a consumer perspective. In Disconnected: What the Phone System’s Digital Transition Will Mean for Consumers, the authors find that today’s regulated telephone system includes strong protections for consumers, protections that may be endangered by the IP transition. Major telephone carriers argue that the government should have no, or extremely limited, oversight of digital communications networks and are advocating for the elimination of FCC and state oversight of IP networks. If the carriers are successful, The Greenlining Institute argues, the transition could harm all consumers, with disproportionate harm to communities of color. The IP transition could potentially reduce the availability of telephone service, leaving some communities without any service whatsoever. The Greenlining Institute recommends that policymakers clarify that digital phone services are telecommunications services subject to the jurisdiction of the FCC.

We also saw a report this week from the National Association of State Utility Consumer Advocates. In The IP/Broadband Transition – Public Policy Still Matters, author Trevor Roycroft identifies the following issues that demand the attention of policymakers:

• Affordability: Broadband and wireless services are increasingly viewed as necessities. Policy makers should consider whether steps are necessary to mitigate affordability concerns.
• Limited Competition: Duopoly wireline broadband markets, and consolidating wireless markets, should be monitored to determine whether markets are delivering economically efficient outcomes.
• Reliability and Service Quality: Legacy wireline voice networks have delivered reliable and high quality service, providing value to consumers and contributing to the fulfillment of critical public safety objectives. As broadband and wireless are now viewed as necessities, reliability and service quality standards for new technologies must be addressed.
• Access to Emergency Services: The transition to an alternative technology platform does not reduce the importance of robust access to emergency service providers. Policy makers should monitor the oversight of the transition to IP-based broadband, and ensure that the benefits associated with high-quality systems continue. The issue of backup power also requires careful attention.
• Carrier of Last Resort and Universal Service: Carrier of last resort (COLR) obligations, the requirement that local telephone companies make service available to all households in their service area, have ensured that affordable and reliable telephone service is available on reasonable request to all households. While voice services have been subject to COLR obligations, broadband services are not. Going forward, access to affordable, high-quality broadband services will be as important as access to legacy voice services has been. Determining how COLR costs will be recovered, and the criteria required to ensure broadband availability will be critical.
• Informed Consumers and Consumer Education: During the transition to IP broadband, policy makers should ensure that educational efforts are ongoing, so as to inform consumers of changes and the potential impact of changes, and to promote an open dialog regarding consumer needs during the transition.

As The Greenlining Institute report points out, if implemented properly, the IP transition can ensure that everyone in the U.S. continues to have access to one of the most reliable telephone networks in the world. But if the transition goes awry, we risk hanging up on consumers and broadening the digital divide.

Benton is closely tracking the IP transition. We’ll soon be releasing our own report on protecting vulnerable communities during this huge undertaking. ‘Til then, we’ll see you in the Headlines.