Jameson Dempsey co-authored this post.

With the new year upon us, the FCC will soon be receiving comment on one of the “big picture” issues facing telecom regulation: addressing the evolution of the Public Switched Telephone Network (“PSTN”) from “legacy” time-division multiplexing (“TDM”) systems toward an Internet protocol (“IP”) based network. The transition from the traditional PSTN to IP has been a hot topic at the Commission and within the industry, as consumers increasingly “cut the cord” on landline copper networks and rely on mobile wireless or IP-enabled communications technologies running on broadband networks. However, consumer groups and small carriers have warned that in recognizing the inevitable transition toward IP, the FCC should not abdicate—and in some cases must increase—regulatory authority over communications networks. Later this month, the FCC will receive comment on two divergent petitions proposing responses to the transition. These petitions provide the first opportunity for the FCC to frame the debate over IP-enabled communications in Obama’s second administration.

The first petition was filed by AT&T on November 7^th, 2012, the day after the 2012 Presidential election. AT&T’s petition seeks a rulemaking that would allow ILECs to host trial runs of specific regulatory reforms in discrete areas where legacy PSTN networks have been retired in favor of all-IP networks. AT&T argues that these trial runs will demonstrate that conventional public-utility style regulation is no longer necessary or appropriate. The petition also highlights a few areas where AT&T believes reform would limit regulatory uncertainty and increase investment in IP networks. Among other rules, AT&T seeks reform to (and essentially elimination of):

Section 214 discontinuance requirements
Notice-of-network-change rules
Federal and state service-obligation rules
Remaining “equal access” obligations
Dialing parity rules
Legacy copper loop requirements

AT&T’s petition comes on the heels of an earlier ex parte letter that it filed with the Commission on August 30, 2012. That letter included a proposed “checklist” of similar reforms to promote the transition to IP-enabled networks. The National Association of State Utility Consumer Advocates (“NASUCA”) opposed AT&T’s letter, contending that the proposed reforms would severely limit the ability of the FCC to effectively regulate communications networks, and would harm both consumers and the broader telecommunications ecosystem.

The second petition was filed by the National Telecommunications Cooperative Association (“NTCA”), an association representing rural ILECs. The NTCA does not propose deregulatory trial runs, but instead seeks a more traditional comprehensive evaluation of the regulatory scheme to be applied to IP networks. NTCA argued that the FCC should adopt a “smart regulation” approach to the TDM-to-IP transition that would protect consumers, promote competition, and ensure universal service. In particular, the NTCA proposed that the FCC: (1) develop a list of existing regulations that are not applicable to IP-based services; (2) seek comment on which of those regulations should be eliminated, retained, or modified; and (3) set a firm but reasonable deadline for completing reform.

The NTCA petition also proposed near-term solutions that would create incentives to promote the IP transition. First, it asks the FCC to confirm that all interconnection is covered by the Communications Act regardless of technology, and to allow carriers to recover the costs associated with exchanging traffic through such interconnections. Second, the NTCA argues that the FCC should reform its universal service rules to provide rural and small carriers with funding for broadband-only customers, and to offer universal service support to “middle mile” network facilities that transmit data between “Internet points-of-presence and distant high-cost areas.”

The FCC has set a comment deadline of January 28, 2013 and a reply deadline of February 25, 2013.

FCC Opens the Year with A New Look at the Transition from TDM to IP Networks