AT&T Inc. CEO Randall Stephenson. Reuters/Brendan McDermid
Since 2010, AT&T has been waging a deregulation campaign in several states across the country while aiming to move its traditional, wired telephone services to Internet Protocol (IP)-based services, which transmit voice communications digitally. With the help of corporate “bill mill” the American Legislative Exchange Council (ALEC), and support from companies like AT&T, state legislators have introduced a series of “model” bills aimed at preventing regulation of IP-based services in more than thirty states across the country, from Idaho to Georgia, Texas to New Hampshire. As the country moves to an IP-based telephone network, AT&T wants to completely retire its wired services and shed critical regulatory obligations that currently apply to legacy services. Now AT&T has taken that mission to the federal level.
Last November, AT&T filed a petition with the Federal Communications Commission (FCC) requesting regulatory relief in order to move its traditional wireline telephone services to IP-based services. The petition reflects many of the same principles as the state-level model bills, which strip states of any enforcement power over service quality and prices, and has been endorsed by ALEC. It would set a dangerous policy precedent at the FCC, as IP-based telephone services do not fall under any clear regulatory framework, and could have a dramatic impact on the future of basic telephone services. Public interest advocates say these changes would affect low-income people, people of color and rural communities most.
Although people are increasingly moving to wireless-only telephone services, roughly 17.5 million Americans depend on only landline service, according to the most recent statistics from the FCC released in 2010. Both the FCC and state Public Utilities Commissions regulate landlines: the FCC oversees interstate service and state commissions oversee intrastate service. This regulatory authority dates back to the early twentieth century and government efforts to foster competition in a telephone market that AT&T dominated. Since then, the federal and state regulation of wired telephone service requires companies like AT&T to offer basic services, such as emergency calling and directory assistance, and to ensure that customers have access to affordable, quality phone service. This set of “legacy” regulations has expanded telephone service to 96 percent of Americans at relatively affordable rates, but none of these landline regulations currently apply to IP-based service.
AT&T’s petition to move its traditional telephone services to IP-based services seems benign enough, but a closer look reveals troubling ramifications. In its petition, AT&T is asking the FCC to run tests of IP-based networks in certain, currently undetermined areas where it will phase out its landline services. In exchange for testing these networks and expanding its IP-based service, AT&T is asking the FCC for regulatory relief, claiming that the “burden” of these regulations is so costly as to prevent it from investing in next generation of networks.
“The trials we propose are intended to ensure that this transition takes place as smoothly as possible,” wrote Michael Balmoris, an AT&T spokesperson, in an e-mail to The Nation “They will allow consumers, service providers, and policy makers to identify issues that are raised by this transition, determine the best course to proceed going forward, and ensure that no consumer gets left behind in this transition.”
But the petition threatens to shed the very regulations that would protect consumers, say public interest advocates. Those “monopoly-era regulatory obligations,” AT&T argues, make “no sense” because they treat incumbents, like AT&T, as dominant providers in an IP-based broadband market that others lead. True, AT&T is not leading the broadband market, but it’s hardly struggling. Just last year AT&T was listed as the top Fortune 500 telecommunications company, with annual revenue of more than $126 billion.