Recently, Hank Hultquist of AT&T posted some interesting food for thought on the evolution of voice services. His general premise is that the traditional public switched telephone network (PSTN) is as outdated and old-fashioned in the telecom world as the Edsel is in the automotive realm. Instead, we are moving to a world where voice service will be merely another application riding on a “broadband autobahn” of Internet protocol (IP) networks, and these IP networks will seamlessly interconnect without the need for pesky rules or government intervention.
NCTA agrees with many of the points raised by AT&T. For instance, it is true that many of the rules created for the PSTN, designed to address a monopolistic environment, are arcane and badly in need of updating. Nowhere is this more true than in the case of the intercarrier compensation regime, a complex set of regulations governing the payments companies make to each other to get a voice call from Point A to Point B. It’s no secret that these rules are badly in need of repair – the FCC has been grappling with their reform for nearly a decade. Given the challenges of applying these rules to modern networks, many in the industry agree that the Commission should consider eliminating these rules entirely, allowing entities to recover the costs of their networks from their customers, and handing traffic to other carriers who do the same.
But AT&T’s premise breaks down (to continue the automotive analogy) when it suggests that problems applying existing compensation rules to voice services provided over IP networks (VoIP) somehow lead to the conclusion that there is no need to apply any rules to VoIP, and in particular no need for interconnection rules. Although the telecommunications industry looks very different than it did when the PSTN was created, the Commission already has concluded that a number of key requirements, like E-911 and universal service fund contributions, should apply to voice services even when those services are provided over IP networks.
The Commission also is keenly aware that the ability to interconnect and exchange traffic with incumbent local exchange carriers (ILECs) is the cornerstone of a competitive voice market and that without some form of regulatory supervision, ILECs would have the ability to deny interconnection to competitors. For instance, while Mr. Hultquist sings the praises of IP networks in his blog post, his company has argued that it has no legal obligation to interconnect its IP network with the IP networks of its competitors or to exchange traffic with those competitors in IP format. Because AT&T is by far the largest provider of voice service with nearly 140 million total voice lines (six times more than the entire cable industry), this is a matter of great concern.
Furthermore, to facilities-based providers of VoIP services, voice is not just another data application riding over an IP network. Both cable operators and telephone companies, including AT&T, offer VoIP as a specialized service, separate from their broadband Internet access services offered to consumers. VoIP packets are separated from other broadband traffic to ensure the quality of service necessary to keep calls from breaking up or dropping. Without the ability to interconnect with incumbent networks, cable operators and other competitive VoIP providers would be unable to offer these voice services, which have generated billions of dollars in savings for consumers.
So, while it would be nice to be in a world where all VoIP providers could readily interconnect their IP networks, for now, some minimal rules of the road are required to ensure that the technology can reach its full potential.