One Hundred Years After AT&T's Kingsbury Commitment, Benton Calls for a New Network Compact

On December 19, 1913, AT&T Vice President Nathan Kingsbury sent a letter to U.S. Attorney General George McReynolds in hopes of putting AT&T’s business practices “beyond fair criticism” of anticompetitive behavior. In the letter, AT&T promised to sell its stake in Western Union Telegraph, resolve interconnection disputes, and refrain from acquisitions if the Interstate Commerce Commission objected. The letter became known as the “Kingsbury Commitment”. One hundred years later, AT&T and other landline telephone carriers seek to retire the copper-based phone system. But the nation cannot retire the commitment Attorney General McReynolds understood to create “full opportunity throughout the country for competition in the transmission of intelligence by wire.”

Given shrinking wireline telephone subscribership, incumbent telecommunications companies and their supporters say it makes no sense for them to sink more dollars into “legacy” phone networks when the future is in Internet Protocol (IP) infrastructure. Of late, much attention has been focused on a petition filed last year by AT&T that asked the Federal Communications Commission (FCC) to move forward on what’s being called the IP transition. The FCC is now in the beginning stages of what will be a years-long process to improve the nation’s infrastructure to better suit America’s 21st century communications needs.

Eventually, all telecommunications infrastructure likely will be IP-based. And few doubt that the IP infrastructure of the future is the better technology and the better path for the U.S. in the long run. But what will become of the tens of millions of Americans who already face hurdles in accessing existing telephone and broadband networks? How can we ensure them easy and affordable access to future networks?

While the biggest telephone carriers are planning a transition to IP-enabled networks, most do not have plans in place to offer these advanced services to people in the poorest or most remote communities. Instead, the companies are rolling out services that are vastly different from what consumers are used to and pairing them in ways that consumers may not want. In some places, this means replacing today’s wireline telephone network with fiber infrastructure that can offer advanced broadband speeds, voice, video and data over the same network. However, in other places – especially less-populated and less-prosperous regions – this may mean relying on less-capable, all-wireless technologies. In such areas, consumers may not join in the leap forward. Any potential shortcomings must be addressed before unplugging yesterday’s telephone network, which millions of Americans currently rely upon for basic phone service. The question is: How can regulators ensure a fairness of opportunity for all Americans?

As we embark on what’s being called the IP transition, we need a new network compact for the 21st century that guarantees that the public, not just industry, benefits from the migration to digital networks. The FCC needs to consider a wide array of vulnerable communities that could be unfairly disadvantaged during this conversion. Depending on how this transition is done, these communities stand to benefit immensely or be disproportionately harmed. Only by fully understanding the possible pitfalls and opportunities of such a change can the FCC develop a set of “rules of the road” that will best serve all of the country’s residents.

In The New Network Compact: Making the IP Transition Work for Vulnerable Communities, released today, the Benton Foundation has identified 10 interrelated principles to help guide the transition to all-IP networks – whether they are delivered via fiber, microwave, coax, wireless or some other technology – in order to guarantee that all Americans have an opportunity to succeed using the networks of tomorrow. In sum, these principles are intended to guarantee that all Americans will have access to IP-enabled networks that are: 1) fairly priced, 2) offer a high quality of service with the capability of running essential applications, and 3) allow people -- regardless of age, ability, location, or economic status -- the chance to develop and share content as well as use and create new technologies.

The report highlights the concerns of vulnerable communities through the eyes of the individuals and organizations who work on a daily basis with children, people with disabilities, low-income families, communities of color, rural residents and senior citizens. As an integral part of their jobs, these advocates must understand the struggles of these vulnerable populations to help them overcome the obstacles they face. As such, they are well-suited to help the FCC make better, more-informed decisions about this transition.

Benton’s Ten Principles for the IP Transition

1. Ubiquity: Every American needs to have affordable access to high-speed fixed and mobile broadband networks.
2. Accessibility: The 54 million Americans with disabilities, and other vulnerable populations, must be able to make full use of broadband networks and the video and voice services that run over these networks.
3. Diversity: In addition to ubiquitous availability, Americans must have the ability to access and distribute content that reflects the country’s diversity of viewpoints.
4. Openness: Consumers must retain their rights to utilize any legal applications, content, devices, and services of their choosing on the broadband networks they use.
5. Competition: Policies should encourage new entrants into the emerging IP-enabled network market.
6. Interconnection: Regulators must ensure that competing network providers are able to interconnect in areas where there is legacy market power. Subscribers must be able to reach subscribers on any other network.
7. Trustworthiness: As technology moves forward, consumers must retain key protections that ensure a fair and safe experience.
8. Robustness and resiliency: To ensure public safety, consumers need to be able to rely on networks in emergencies.
9. Speed: Consumers need fast networks that allow them access to and choice of a full range of services to meet their needs.
10. Innovation: For consumers, the promise of the IP transition is new services and ways to collaborate and communicate that are better and more advanced than current basic telephone communications.

New FCC Chairman Tom Wheeler seems to understand that everyone needs to benefit from this transition. During his first day on the job, he told FCC staff they have a big job before them. “The challenge America faces, and that this agency faces, is to secure the future through the actions of the present – by encouraging investment and innovation; preserving competitive opportunities; protecting consumers; and assuring the opportunities of the new network extend to all,” he said.

First and foremost, people must have affordable access to high-speed IP networks to make the transition successful. Other countries – including developed countries such as Sweden and Japan, as well as less-developed ones like Portugal and Russia – are well on their way to replacing their standard telephone connections with state-of-the-art fiber-optic connections that can boost speeds and lower costs to consumers. America is woefully behind Azerbaijan, Qatar, South Korea, Australia and many other countries that are advancing fiber-based IP networks capable of 100 megabits per second (Mbps) to every home and providing vast consumer benefits. Major commercial rollouts of fiber-based IP networks like Verizon’s FiOS service, which generally serve more affluent communities, have stalled. Often U.S. providers are not extending these networks to rural, poor or minority populations. The Communications Workers of America notes:

1. In Boston, areas without access to Verizon’s FiOS service are home to 52% minority populations, compared with wealthier suburban areas with access that are home to populations that are just 23% minority.
2. In Buffalo, areas without access to Verizon’s FiOS service are comprised of 45% minority populations, compared with wealthier suburbs with access that are just 5% minority.

In some places, such as Hurricane Sandy-ravaged Fire Island (NY), Verizon attempted to deploy a service that appears to be inferior to the PSTN network. It is impossible to make a successful transition without truly high-speed IP networks.

Although there are some promising municipal and other gigabit speed IP networks being deployed that are capable of carrying high-quality voice, video and data services, American communities often lack the kind of high-speed IP networks that would most benefit consumers, thereby making the IP transition successful.

Beyond access to physical networks, the U.S. still has Internet adoption issues, and efforts to close this gap appear to be plateauing. Even though 76% of U.S. adults use the Internet at home, 9% of adults use the Internet, but lack home access. These Internet users cite many reasons for not having Internet connections at home, most often relating to issues of affordability. Some 42% mention financial issues such as not having a computer, or having a cheaper option outside the home. And, as of May 2013, 15% of American adults ages 18 and older do not use the Internet or e-mail at all. Asked why they do not use the Internet:

• 34% of non-Internet users think the Internet is just not relevant to them, saying they are not interested, do not want to use it, or have no need for it.
• 32% of non-Internet users cite reasons tied to their sense that the Internet is not very easy to use. These non-users say it is difficult or frustrating to go online, they are physically unable, or they are worried about other issues such as spam, spyware, and hackers.
• 19% of non-Internet users cite the expense of owning a computer or paying for an internet connection.
• 7% of non-users cited a physical lack of availability or access to the Internet.

If the IP Transition is to be successful for all Americans, then, broadband networks must be available, accessible, affordable, trustworthy, and relevant to new adopters.

For consumers, there are also a number of technological hurdles to address if the IP transition is to be a seamless one. As new FCC Chairman Tom Wheeler pointed out in a memo on stranded telephone network investments sent to then-FCC Chair Julius Genachowski before Wheeler took charge, “Many homes and businesses still use devices that depend on specific characteristics of the [public switched telephone network] (e.g., auto-dialers, alarm systems, ATMs, PoS terminals).” Wheeler cautioned that “[t]hese services and devices will have to be replaced and the accompanying construction and inspection 'codes' revised.“

In addition, under current law, consumers have many protections that guarantee them affordable access to quality telephone service no matter where they live or how much they earn. They can call whomever they want – regardless of the receiver’s service company – and be confident the call will be completed. They have state regulators who represent them and are empowered to make sure local phone companies are following the rules protecting consumers.

As it stands now, while consumers can benefit from newer technologies, policymakers must answer a number of critical questions to make sure that the newest of technologies can support some of our oldest values – including basic consumer protections:

• Will consumers have access to reliable, redundant and resilient IP networks from more than one provider?
• How do we ensure that these networks will be accessible and affordable for minorities, low-income families, rural residents, people with disabilities and senior citizens?
• Will consumers have access to truly high-speed IP networks that allow for competition in voice, video and data services over those networks?
• Will consumers have barrier-free access to competitive choices for innovative new voice, video and data services over these advanced networks, even when those services directly compete with the incumbent IP provider’s own offerings?

Simply put, how do we ensure that every American can benefit from advanced IP networks that are fast, open, competitive, innovative and accessible?

Top lawmakers are asking these same fundamental policy questions. “As we look to the future, we must make sure that comparable communications services are available at comparable rates for everyone in the country, no matter who they are and no matter where they live,” Senate Commerce, Science and Transportation Chairman John D. (Jay) Rockefeller IV (D-WV) said at a recent hearing. “Even as networks evolve and as companies upgrade their technology, the principles undergirding decades of communications law and policy remain.”

No one can be left behind in this great movement away from the telephone networks we rely upon to connect to emergency services, businesses, friends and family. All children must be able to use the new networks for learning, all seniors must have access to health services and information, and all adults must be able to look for jobs or start a business using the new high speed networks. The nation’s future depends on it. How can we truly say the U.S. offers opportunity for all if the 21st century’s main knowledge tool isn’t available for everyone?

Ted Gotsch is a freelance writer with more than 20 years of journalism experience, including a decade covering telecommunications and technology policy for Telecommunications Reports, the nation’s oldest telecom trade publication. A graduate of George Washington University, he currently serves as communications coordinator for the International Brotherhood of Teamsters in Washington (DC).

Kevin Taglang is Executive Editor for the Benton Foundation.