Cable Allies Press Feds To Continue PSTN Interconnection Guarantees

Telecom Policy Report, Oct 2, 2006

Cableco-affiliated lobbying groups that support strong, equal public switched telephone network (PSTN) interconnection language in pending telecom- reform legislation have been trying to leverage their positions in the U.S. Congress, with federal regulators and at the state level with a recent market report that apparently underscores the value of choice and the pricing benefits of competition to subscribers in the United States.

Now in the midst of a short congressional recess that has the fate of telecom bills in the Senate and House of Representatives possibly falling into post-election, lame-duck session limbo (Telecom Policy Report, Sept. 17), cablecos and their allied groups are urging federal lawmakers to update telecom laws, with Voice over Internet Protocol (VoIP) services and providers being one of the key aspects of the lobbying focus. A major talking point of the effort is a recent cable-funded analysis by economic research firm Microeconomic Consulting and Research Associates (MiCRA) with positive outlooks about the competitive impact of cable VoIP in particular and facilities-based voice competition in general.

Leading the charge are the National Cable & Telecommunications Association (NCTA) and the Broadband Everywhere (BE) coalition, a group formed earlier this year with cable and multiple consumer-group backing to link video- franchise and telco-entry issues with equitable broadband user-access policies (TelecomWeb news break, April 21). NCTA and BE fixate on a range of PSTN open- access, interconnection and other equal-status provisos that would be provided to VoIP in the once-ambitious Advanced Telecommunications and Opportunity Reform (ATOR) Act and its less voluminous counterpart, the Communications Opportunity, Promotion, and Enhancement (COPE) Act of 2006 (both designated (H.R. 5252).

Propping Up Committee Chairmen

When push comes to shove and worrisome last-hour fragmentation of the bills possibly occurring because of the bitter network-neutrality issue, the groups are looking expediency in the eye and placing their support behind the maneuvers of Sen. Ted Stevens (R-Alaska) and Rep. Joe Baron (R-Texas), the key legislators who have sponsored ATOR and COPE, respectively.

"Congress can continue to fine-tune the telecom act to ensure that consumers realize even greater benefits," says NCTA President & CEO Kyle McSlarrow. "By extending historic interconnection rights to facilities-based VoIP providers - as Chairman Stevens and Chairman Barton are currently attempting to do - and avoiding costly, two-steps-back regulation of the Internet-like network neutrality, federal lawmakers can usher in the next generation of communications, education and entertainment. Further updating our telecom laws will further hasten consumer savings and benefits."

Likewise, BE's board members - which include representatives from the American Cable Association (ACA) - called on Congress, the Federal Communications Commission (FCC) and the states to "promote true phone competition" and "to ensure that nothing stands in the way of the robust deployment of facilities-based VoIP services." The bottom line, according to the group, is that passing the interconnection language in the current House and Senate telecom bills would be a huge win for consumers.

BE cites the 25-page MiCRA study for concluding that American consumers could save an estimated $101.5 billion dollars during the next five years if state and federal officials maintain rules requiring the connection of all phone networks, and that users have more phone-provider choices. Susan Molinari, BE's co-chair and a former GOP congresswomen representing New York (1990-97), maintains "Congress should act to guarantee that consumers - particularly low- income consumers - get these much needed savings."

For his part, Dr. Michael Pelcovits, principal at MiCRA and lead author of the study, said in a prepared statement that the study concludes the phone- choice savings can be ensured through meaningful interconnection rules, such as those being shepherded by Stevens, chairman of the Senate Committee on Commerce, Science and Transportation, and Barton, chairman of the House Committee on Energy and Commerce. "Ensuring that facilities-based VoIP providers can obtain interconnection on reasonable terms and conditions is the single most promising way of bringing competition and enormous savings to wireline telephone service, where incumbents still control roughly 85 percent of the residential and small business market," Pelcovits said.

Cablecos Vs. Telcos

Besides the legislative leverage, NCTA also uses the MiCRA report to tout cableco experience in delivery of competitive voice, data Internet access and video services, and to bash large incumbent telcos - primarily AT&T and Verizon Communications - for anti-competitive stances and alleged "empty talk" about innovation. "We've already made the investments in state-of-the-art networks, so we are ready for the future now," remarks McSlarrow.