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AT&T held an analyst event in a still-Sandy-devastated New York City Nov. 7 to introduce Project Velocity IP (VIP), its plan for expanding and enhancing its wireless and wireline IP broadband networks and driving “continued increases in revenue.” Harold Feld, senior vice president of the consumer advocacy group Public Knowledge, has called AT&T’s announcement “the single most important development in telecom since passage of the Telecommunications Act of 1996.”
AT&T plans to spend $22 billion a year for three years, converting its time division multiplexing (TDM) network—the nation’s 100-year-old copper telephone network—to an IP-based network.
Feld applauds the investment. It will create a combined wireless and wireline network that’s greater than the sum of its parts. Plus, AT&T will invest to take on the challenge of cable operators, and in return cable operators and wireless carriers will respond with improvements and lower prices.
“This is how competition is supposed to work,” Feld wrote in a Nov. 13 blog post.
The complication—or the momentous aspect, if you’re feeling generous—is that government regulation of telephone services is entirely tied to TDM/copper networks. These regulations insist, for example, that all Americans have the basic right of phone service and at a low-cost rate.
Over a copper network, there are also rules about protecting consumers’ privacy.
“When you call on IP,” Feld told eWEEK over a call, “there’s nothing from stopping the provider from noticing how often I call out for pizza and starting to target me with pizza ads.”
The day that AT&T introduced Project VIP, it also filed a petition with the Federal Communications Commission (FCC) to “begin a dialog” about how to address the matter of regulations and to suggest a pilot program that might highlight which current regulations can be kept and which should be scrapped.
That some should be scrapped isn’t so outlandish. A post about the petition on Duke University’s Telecom Policy Blog points out that in some instances, AT&T has suggested the FCC do away with the lengthy approval processes in situations where AT&T is upgrading infrastructure and there’s no discontinuation of service.
What are Feld’s fears about how that dialog might proceed?
“My first basic fear is that we become the first nation to step backward on universal service. We said 100 percent service and we have 99.999 percent in this country now. We don’t have nearly that for Internet coverage,” said Feld. “To fund the last 2 percent [of Internet coverage] would cost as much as funding everything else. My fear is we’ll go from ‘100 percent’ to ’95 percent is good enough.'”
Other fears are that as a nation, the United States will care less about making sure that there’s a very basic level of service that’s affordable to everyone, and that the task of regulating telecoms could be shifted from the government to the private sector.
“I don’t think we can delegate something this big and this important to our lives to the private sector,” he said. “Somebody has to look out for the little guy.”
What are Feld’s hopes for how things proceed?
He’s hopeful, he says, that people will come together to work out a plan, but stressed the importance of the various groups resisting the temptation to play consumer groups off one another and of preserving the “core elements of the social contract” that the nation had in copper networks.
“At some point something really bad will happen—I don’t know what that will be—but something is going to happen, and when it happens, people are going to get upset and want a rule placed. And when you make policy in that circumstance, it ends badly,” said Feld. “People understand, I think, that it’s better to set up policy now.”
While there are some companies that would welcome a chance to abandon the old rules, Feld said that most acknowledge that having no regulations is unpractical, and that AT&T has been specific in acknowledging that “we can’t just walk away from what’s regulated us for the last 100 years.”
“I’m glad for the announcement,” Feld added. “It wakes us up to the fact that we need rules for a 21st century conversation.”