Pai Supports Wire Center IP Trials

Pai is the first commissioner to publicly endorse the idea of wire center trials, proposed by AT&T as part of its “Project Velocity IP” announcement of a new $14 billion investment in wired and wireless infrastructure (CD Nov 8 p11). Pai set out some “basic principles” for the program: (1) It should be voluntary for carriers and states “willing to embrace the IP transition.” (2) It should take place in a wide variety of places throughout urban and rural communities so the commission learns as much as possible about what effects an IP transition will have. (3) Residential customers who currently have fixed telephone service should continue to have voice service available to them when based in IP.

Pai pointed to the wide support for AT&T’s pilot proposal, from big ILECs to minority organizations to Blair Levin, “the father of the National Broadband Plan,” who has encouraged the commission to move forward with the project (CD Jan 31 p2). “Moving forward with an all-IP pilot program would send a powerful message to the private sector” that the commission “won’t force carriers to invest in old and new networks forever,” Pai said. AT&T put the deregulatory proposal on Pai’s radar, but the commissioner set forth how the program should be structured, an FCC official said. The proposal was informed by the latest round of comments, the official said, adding that Pai wanted to “not be wedded to every jot and tittle” of AT&T’s filing.

In response to our question about the future of carrier-of-last-resort obligations in an all-IP environment, Pai said he didn’t think there’s “any reason for concern,” because under his plan anyone who currently has voice service would continue to get it. With respect to new customers, Pai thinks that “in conjunction” with recent USF reforms to encourage broadband deployment throughout the country and drive costs down, the commission will have a good opportunity to reach those customers, he said.

Free market groups praised the proposal. “I expect incumbent telephone companies will embrace the opportunity to participate in the IP transition beta trials and work closely with the FCC to define where those trials should be conducted and do so in an open and transparent way,” said Fred Campbell, director of the Competitive Enterprise Institute’s Communications Liberty and Innovation Project. “Conducting local IP transition beta trials in wire centers will give the Commission, industry, and consumer groups an opportunity to see first-hand what works and what doesn’t work, and successfully come up with a path forward to modernize the regulatory landscape, increase competition, and bring new choices to consumers for high-speed wired broadband services."

Free State Foundation President Randolph May said he thought Pai’s principles were “generally” right, but May wouldn’t rule out the possibility of mandatory carrier participation. “In order to fulfill his other suggested condition concerning conducting the tests in a variety of places with a diversity of populations and geographies, it might be necessary, for example, to require participation by some carriers, or ‘induce’ participation, as the Commission might say,” May said. “The key here is to recognize that these are tests, so the Commission needs to retain some degree of flexibility to adjust as the tests unfold."

Pai declined to answer an audience question from an “end user” about what to do about power outages in an IP world, because the FCC is still in the fact-gathering process to determine that question, he said. But any “gaps in the resiliency of IP” is something the FCC needs to understand, and that’s one of the benefits of having a pilot program, he said. “We can understand what happens in an emergency. ... Were consumers in fact harmed when a public safety emergency happened because that network didn’t serve them? We need to know that."

Not everyone was thrilled about Pai’s proposal. “How on Earth is the FCC going to design and administer an IP Transition pilot program?” asked Public Knowledge Senior Vice President Harold Feld. “Given the difficulty the FCC had in designing the Lifeline/Linkup pilot program, I'm surprised that Commissioner Pai is proposing the FCC step in here and play such an active role.” Feld criticized “the absolute incomprehensibility” of Pai’s stated principles, which he said won’t lead to real data or have appropriate safeguards. Pai’s pilot program “betrays either a lack of understanding of what a pilot program actually is, or a deliberate effort to obfuscate the intention to utterly deregulate the phone system under the guise of a ‘pilot program,'” Feld said.

"Pai’s proposals might improve AT&T’s tests, but they don’t improve the test subject,” said Free Press Policy Director Matt Wood. “AT&T wants to misuse a technological upgrade on small portions of its network to jettison any meaningful protections for consumers and competition. We agree that customers who have service today should continue to have it when the service is based on IP; but if the Commission abdicates its responsibilities under the Act, it will have no way to ensure that result. The Commission needs to set its authority straight and recognize its continuing obligation to enforce the law before blessing any dangerous experiments designed to blow it up.”