Thursday
Oct302014

Wheeler’s Words, Words of Action

By Chip Pickering for the Broadband Coalition Blog

For consumers, customers and competition fans everywhere, a speech by FCC Chairman Tom Wheeler is music to the ears. This September, in his competition curtain raiser at 1776, Wheeler presented consumer data to drive his arguments for increasing broadband choices for more Americans.

It was a moment that also registered with business, nonprofit, and government customers and the competitive carriers that serve them. 

Earlier this month, Wheeler again hit the right notes in his address to COMPTEL in Dallas, providing details to policy areas that must be addressed to preserve and grow competition.

Below is a sample of those words – and how those words are laying the groundwork for upcoming action – action that has the power to protect and preserve competition for a new generation of networks. More choices, more networks, more competition. 

On the IP Transition:

Wheeler: “Let me be clear: transitions to IP are not a license to limit competition.”

Action: This statement alone, quite simply, crushes the arguments made by the largest incumbents, that upgrading one’s network justifies eliminating bipartisan competition laws – laws that have unleashed an American-led tech revolution – has always been absurd.

Their arguments are particularly absurd as a means of fostering investment and innovation as competitors that are, and want to continue, expanding and evolving their networks – such as XO, Windstream, EarthLink, Level 3 and tw telecom – need sound wholesale last-mile access and interconnection policies to grow, reach and provide more innovative services to even more customers. 

Enshrining the Values of Competition:

Wheeler: “Technology transitions are good and they should be encouraged. But advances in technology will never justify abandonment of our values…they include access, interconnection, public safety, consumer protection and national security.”

Action: Technology transitions are not only good, they are the normal course of events in an ever-evolving network architecture. Networks are not static, they are dynamic. The 1996 Act established a framework that provides flexibility for innovation. These values should not be changed each time a new network widget is introduced. 

By rallying around a set of network values – principles established collectively with other FCC Commissioners – Wheeler is building consensus for taking action. This action will benefit consumers and ensure public safety.   

Last Mile Connectivity/Special Access: 

Wheeler: “Communications policy has always agreed on one important concept: the exercise of uncontrolled last-mile power is not in the public interest. This has not changed as a result of new technology. That is as true for businesses and other enterprise customers as it is for consumers.”

“It’s hard to think of a business in America today that doesn’t use the Internet to serve its customers better. But whether the customer is a neighborhood pizza parlor, or a national pizza chain, the ability to enjoy the fruits of competitive networks often requires access to wholesale capacity.”

“As you know, special access lines are used by competitive providers to connect to customers over the last-mile. These lines transport massive amounts of voice and data traffic from cell phone towers and office buildings, as well as carry transactions from ATM machines and credit card readers. This is a critical issue for providers and customers, wired and wireless alike.”

Action: In asserting the need for access to last-mile capacity, Wheeler is making sure customers have access to more innovative choices, better service and better prices. That is what competition brings. Without the ability to purchase wholesale inputs for connecting competitive fiber networks to individual customer locations there is no real competition. Is competition really at risk? Well, earlier this year AT&T failed to address the needs of the wholesale market, even using “TBD” as an answer, in their IP trial filings. That’s a sign that action is needed to protect access to wholesale products, especially since AT&T is incentivized to eliminate wholesale connectivity – and by extension, competition – in its entirety.

Nonprofits, municipalities, schools and businesses of all sizes have chosen competitive providers for a number of reasons. Affordability is high on that list. Elimination of the wholesale market would raise prices for schools, local governments and small businesses. Thankfully, Wheeler has signaled that he won’t let that happen.

The FCC’s commitment to special access data collection, analysis and necessary market reform is also important. Wheeler’s words are good news. Reform of the special access market could save American business and institutions significant amount money.  These services are the bridge that many new, competitive IP network providers need to reach customers with disperse network location needs.

Interconnection:

Wheeler: “VoIP interconnection is an issue that needs to be solved so that customers – small and medium size businesses, anchor institutions like schools, health-care facilities, and libraries, and others – can enjoy the benefits of robust competition.”

I’ve talked before about the regulatory see-saw: if industry acts in the public interest, FCC involvement will be low, but if the public interest is not being served, the Commission will not hesitate to act. VoIP Interconnection is a great example of the see-saw in action.”

Action: Without interconnection, you simply can’t make the network work. It won’t work for competitive broadband providers, it won’t work for streaming companies, and it won’t work for tech start-ups.  The next great competitive innovation – the next VOIP, or the next cloud, or the next Twitter – could literally be stuck on an innovation island without interconnection policy, never reaching consumers and business customers.

Recently, we have seen interconnection used as a weapon by those who hold market power.  If you want a faster Internet, you want the FCC to act fast. Enshrining competitive interconnection policy for the next generation of networks could become Wheeler’s lasting legacy.

Anticompetitive Market Lock-Ups:

Wheeler: “You have told us that lock-up provisions requiring large volume and term commitments in existing contracts are causing uncertainty, unreasonably raising costs, and delaying the transition to IP for your customers.”

Action: Being locked up in a contract can mean a competitive carrier is being “locked out” of buying wholesale services from another provider, or from deploying its own facilities to a business service customer (or for its own use). Many business customers face this obstacle to facilities-based competition in their office parks. A competitive market for special access will never develop if providers are locked into buying most of their special access services from a Bell provider year over year.

Future of Copper:

Wheeler: “An important aspect of network competition is access to copper plant.” “I don’t have to tell you how, even in a high-speed, fiber-driven world, copper pair are often the last leg of delivery.”

“Our goal should be to improve our copper retirement process to strengthen our core values, including competition.”

Action: Once again, Wheeler is debunking a huge Bell myth: the copper network is junk and has no value. Not true. Today – and tomorrow, competitors and the large incumbents will be dependent on copper through a wide range of technologies, including Ethernet over Copper to provide IP-based connections. Copper today allows for broadband connections over 100 megabits per second. These are speeds that will benefit consumers in rural areas, schools on a fixed budget, and business customers with multiple locations. Copper is available nationwide, affordable and scalable, and will be a staple in the broadband universe for years to come. Wheeler is making it clear that Bell plans for copper retirement aren’t an excuse for lowering the curtains on competition.

End Quote:

Wheeler: “Let there be no mistake: there has been competition before the transition, and there will be competition after the transition.”

Action: Amen.

Wednesday
Sep172014

Small Business, Broadband and Tom Wheeler

FCC Chairman Tom Wheeler will testify before the House Small Business Committee today. According to a recent FCC report, broadband and telecommunication service is essential to 97 percent of small businesses. So Chairman Wheeler’s testimony is a great opportunity to highlight the vital role that competition in the broadband market has played in boosting small business – the engine that powers the American economy.

Broadband has enabled small business to think bigger, act bigger and grow bigger.

As broadband providers upgrade their networks to the latest IP technologies, competition is the best way to ensure that small businesses continue to reap these benefits.  Competition has brought new innovations to market –such as VOIP, Ethernet and the Cloud.

In our recent Broadband Innovation paper, Driving Small Business Forward, we focus on the 27.9 million small businesses in the United States. While individually small, these businesses are aggressive adopters of new broadband services, and big IT spenders. From investing in cloud solutions to creating telework opportunities, small businesses are at the forefront of business broadband innovations.

In fact, small firms that adopt broadband and internet services are the fastest growing segment of the small and medium sized business market. They spend $293 billion of the $326 billion spent annually on IT budgets. It’s an investment in reliable, scalable broadband that allows small and medium sized businesses to be the growth engines of our economy.

At the Library of Congress this past June, the Broadband Coalition and COMPTEL launched Customers for Competition and paid tribute to the 1996 Telecommunications Act that unleashed a wave of competition. At the event, one of our highlighted customers, Pantheon Software, detailed how building a fiber line to their small business helped propel future growth while reducing costs.

Today, this same wave of competition continues to bring choice, better customer service and affordable offerings to small businesses across the nation. We look forward to hearing even more examples from Chairman Wheeler today.

Friday
Jun132014

Windstream Letter a Game Changer.

It’s always easier to see both sides of an issue when you have one foot in each camp. That is the case for Windstream, a Broadband Coalition member who has business operations split nearly evenly between incumbent and competitive local exchange carrier operations.

In fact their CEO, Jeff Gardner, recently served as the chair of United States Telecom Association (USTelecom), the trade association that advocates for incumbent providers including AT&T and Verizon. He was also thekeynote speaker at the COMPTEL Plus show for the competitive industry this spring.

This deep understanding of both the incumbent business and the competitive marketplace is what makesWindstream’s recent letter to the FCC such a game changer in the debate over the Technology Transition and the IP Transition specifically. After close examination, Windstream called AT&T’s IP experiment proposal for communities in Florida and Alabama, flawed. 

Flawed, as in should be rejected flawed.

Now, Windstream makes it very clear the FCC should speed the transition from TDM technologies to IP technologies – an area where the company has taken a leadership role. They note that carriers like AT&T should not be allowed to invoke the IP transition as a pretext for shedding pro-competition requirements and an excuse to raise prices on business customers.

In urging the FCC to reject AT&T’s trial outright, Windstream notes:

--AT&T has no plan for wholesale customers. Zero.

--The trials as proposed violate the FCC stated core values: competition, public safety, widespread and affordable access and consumer protection.

--AT&T’s plan will lead to fewer providers, less innovation, and lower standards of service for consumers and business customers.

In their letter, Windstream hits on a key point in the debate: last-mile access.

“In the post-IP world, competitors still will need equivalent access to last-mile facilities and services to continue offering business services to millions of customers.”

Windstream recognizes that competitors can’t make a viable business case to replicate last-mile connections, except to serve the very largest customers. This is because of a variety of factors, including high sunk costs of constructing last-mile facilities (i.e., costs, once incurred, cannot be readily recovered), local government regulations that delay and raise costs for new deployments, and building owners’ refusing access to new carriers or seeking to charge competitors extending networks into their buildings.

Rather than working to cut off last-mile access, like AT&T is proposing, Windstream’s letter calls on the FCC to take immediate action to ensure that, at a minimum, the status quo for wholesale access is not undermined by incumbents seeking to invoke the IP transition as a pretext for dramatically raising the costs of the companies that are their biggest rivals in the business service marketplace. Without this reform, businesses, schools/libraries, hospitals, and government entities all will see their communications bills increase – as competitors’ will be forced to increase prices in response to higher last-mile access costs, and competitors’ prices will no longer provide a meaningful check on incumbents’ price hikes.

On Friday, during their June meeting, the FCC is scheduled to receive a presentation updating the commissioners on the IP Transition and AT&T’s IP experiments proposal. As a recent article in TelecomCompetitor suggested, the Broadband Coalition hopes Windstream’s letter, along with concerns raised by Granite Telecommunications, XO Communications, tw telecom, COMPTEL, Sprint and Level 3 (read here and here) caught the eye of the FCC.  

After all, the migration to IP networks is happening in the marketplace. This is a step forward for technology, a step forward for consumers, and a step forward for innovation. The Broadband Coalition members have been at the vanguard of this transition, rolling out IP-based services for over a decade. But as Windstream notes, we can’t afford to “flunk” a test along the way. And AT&T’s trials, absent a viable wholesale plan for last-mile access, threaten to disrupt technology advancements toward an all IP network. 

Tuesday
Dec032013

Competition Key to Upton, Walden Update

WASHINGTON DC (Dec. 3, 2013) – Today, House Energy and Commerce leaders Chairman Fred Upton (R-MI) and Subcommittee Chairman Greg Walden (R-OR) held a Google Hangout where they announced plans for an update to the Communications Act in 2015.  The House leaders indicated the process would include a number of hearings and white papers leading up to 2015.

In response to the announcement, Chip Pickering, a spokesperson for the Broadband Coalition and a former Republican Member of Congress from Mississippi who helped draft the Telecommunication Act in 1996 as a Senate staffer, released the following statement:

“By design, the focus of the Telecommunications Act was competition, not technology. The rockets of innovation that have launched since the ‘96 Act have literally changed the world as we know it.  From Amazon to EBay, Twitter to Tumblr and Google to Facebook.

“The policy architecture put in place in the Telecommunication Act of 1996 is still working to this day, hatching new markets, new ideas and most importantly new jobs.

“Chairman Upton and Walden are both strong advocates for open markets and I would encourage them to keep competition policy as their guide and not be swayed by arguments that would favor one technology over another.

“New FCC Chairman Tom Wheeler has the tools he needs to protect and promote competition and innovation. We support his data driven approach, which removes politics and lobbyists from critical decisions about competition and market penetration. 

“We are confident the data being collected for the special access proceeding at the FCC will show that AT&T and Verizon have retained bottleneck control on business broadband service. AT&T’s current rate hike request before the FCC is exhibit 1A of their market power.”

Saturday
Nov302013

Small Business Saturday and the Broadband Ladder to the Top

Small businesses have many nicknames: America’s economic growth engine, mom and pop, pre-IPO, or startup. But no matter what you call them they are an indispensable ingredient to our economy.  Besides employing half of the private sector workforce in our country, the U.S. Small Business Administration says that these employers also create seven of every ten new jobs. 

On Small Business Saturday we thank them with our support, and join them in serving our communities. Over 50 percent of the dollars you spend at a small business stay in your neighborhood. And when you tweet about your purchase using the #Shopsmall hashtag, you both shop locally and share globally.

Twitter is a great example of a broadband fueled start up. The company that encourages expressions of 140 characters has thrived on access to ubiquitous and affordable broadband platforms – successfully completing its IPO earlier this month.  Without broadband we have no Twitter (or YouTube, or Pinterest, or Scribd, or…well you get the picture). 

The Broadband Coalition recently released a report called “Broadband Driving Small Business Forward.” Whether your company HQ is based in your home, garage, dorm room or an office park, the report details examples of how broadband makes the wheels of commerce turn.

But like with all other expenses, there is a disproportionate telecom cost for small businesses versus large businesses.  And to help curb those costs, we need to ensure that there is a properly competitive telecom marketplace that is responsive to the needs of our small businesses and helps to drive down the cost of this critical resource. 

Since their birth of the competitive telecom marketplace over a decade ago, when “broadband” meant a T-1 connection and speeds of 1.5 megabits per second (Mbps), competitive providers have been on the cutting edge of innovation, nimbly tailoring their services to the small businesses that are well below the radar of the big telecom megaliths. 

These competitive startups brought innovations like VOIP, Ethernet and the cloud to market. Today many have grown into household names by helping small business tailor their growth needs - providing telephone, high speed data and cloud computing. Competitive broadband makes it their business to serve businesses. 

Today, thanks to competition-fueled innovation, we talk about bandwidth speeds in the tens, if not hundreds, of megabits.  And thanks to the pro-competitive framework that Congress passed in 1996, many businesses that have their choice of providers.

But the big guys don’t always like the small guys. In the broadband industry, competition laws are always under assault. Just Monday, AT&T told the FCC it’s going to raise rates for high capacity business connections by 15 to 25 percent. The FCC only has until Dec. 10th to stop AT&T’s rate hike. If you are a small business and would like to help, please tweet and sign our petition at www.RateHikeSneakAttack.com now.

AT&T’s rate hike will put the 29 million small businesses across America at risk. Less competition means fewer choices as your business grows. It’s pretty simple. When there is true market-based competition, prices for broadband go down and small businesses can move up the ladder of success.