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ACA: FCC’s Interconnection Mandates Apply To IP Networks

Technology-Based Exemptions Not Found In 1996 Telecommunications Act, Trade Group Says

PITTSBURGH, February 26, 2013 - The American Cable Association urged the Federal Communications Commission to reject a request to exempt Internet Protocol (IP) voice networks from bedrock interconnection obligations that Congress included in the 1996 Telecommunications Act to guarantee that the exchange of traffic among carriers of all sizes would spur competition in voice communications markets all over the country.

"Because of the market power of the larger incumbent local exchange carriers, the FCC should immediately affirm that the interconnection mandates [Sections 251 and 252] apply regardless of the technology platforms involved.  In addition, by taking this course, the FCC will provide the proper incentives for providers to continue to compete and invest in the market," ACA President and CEO Matthew M. Polka said.

ACA stated its position in comments filed Feb. 25 in response to a request to the FCC from AT&T that no interconnection regulations should be permitted with all-IP infrastructure. AT&T also proposed to have the FCC set up an IP interconnection trial-run experiment with no regulations.

In its comments, ACA said AT&T's main request was contrary both to law and FCC precedent, not to mention being a serious threat to voice competition that has been flourished, especially following the onset of VoIP service over managed networks deployed by cable operators. ACA said AT&T's proposal would limit voice traffic exchange for IP-based services and threaten the reliability of voice services provided to consumers.

ACA said the obligations placed on larger incumbent phone carriers under Secs. 251 and 252 are critical for managed VoIP providers because they require real time, full duplex communications throughout the duration of each call.  Unlike customers using over-the-top Internet VoIP calls, managed VoIP customers expect and require a high-quality service level for each call.  If adopted, AT&T's proposals would mean that cable VoIP providers would need to gamble on "best efforts" Internet routing, which, as over-the-top VoIP service users know quite well, can lead to dropped or degraded calls.

ACA said that AT&T was incorrect as a matter of law that interconnection requirements that apply to circuit-switched Time Division Mutiplexing (TDM) networks do not apply to IP networks. Interconnection obligations, ACA said, continue to hold regardless of the technology used to achieve such interconnection, noting that Sec. 251(a) requires all carriers to interconnect directly or indirectly and section 251(c)(2) requires incumbent phone carriers to provide interconnection to ‘any requesting telecommunications carrier ... for the transmission and routing of telephone exchange service or exchange access.'  The statute,  Section 251(f), also provides an exemption from these requirements for certain rural incumbent carriers in limited circumstances.

"The FCC should take this opportunity to clarify that the interconnection requirements apply regardless of the technology used to interconnect," Polka said.

Saying precedent supports its view, ACA noted that the FCC has previously stated that Secs. 251 and 252 apply regardless of the technology employed.  In the Connect America Fund (CAF) Further Notice, the FCC stated that "we observe that section 251 of the [Telecommunications] Act is one of the key provisions specifying interconnection requirements, and that its interconnection requirements are technology neutral - they do not vary based on whether one or both of the interconnecting providers is using TDM, IP, or another technology in their underlying networks." 

ACA said granting AT&T's request would harm consumers and competition because of the market power that AT&T and other large incumbent phone carriers still possess. Despite competition in select retail voice markets, larger phone carriers continue to dominate the interconnection and transit markets.  Large phone incumbents typically operate in and control larger geographic areas and the larger incumbents retain a dominant position in interconnection negotiations vis-a-vis competitive providers, who operate only in select areas, ACA said.

"Experimenting with no regulatory guidelines for interconnection is not only not permitted by the statute but would have a chilling effect on investment by managed VoIP providers as many providers would adopt a ‘wait and see' stance while the experiments take place," Polka said.

 About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing about 850 smaller and medium-sized, independent cable companies who provide broadband services for more than 7.4 million cable subscribers primarily located in rural and smaller suburban markets across America.  Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business.  For more information, visit http://www.americancable.org/

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