Telecom 2015 Will be Very Different But Still Need Regulators

PALM SPRINGS, Cal. -- The telecom market 10 years from now will be very different from today, but there still will be a role for regulators, said speakers at a panel looking toward telecom in 2015 that concluded the NARUC annual convention here.

Link Hoeving, Verizon asst. technology vp, said telecom customers in the future will be nomadic, multitasking people who will want total control of the content coming to them over multiple networks. He said the market will shift to “everything on demand, nothing scheduled.” He said this market will demand removal of all entry barriers, open connectivity, and innovative responses by providers. He said there will still be a purpose for regulators in assuring social responsibility by carriers and protection for consumers: “But regulators in these areas should react to market failures that occur, not try to anticipate them.” John Rose, OPASTCO pres., said consumers will continue to want affordability, access and fairness, but interconnection is the “failure spot” most likely to stand in the way of those desires. He said ensuring open interconnection “is the single most important issue for our future” and an area where state regulators can have the most impact.

David Svanda of the VON Coalition said “there’s a plethora of applications coming, with IP becoming the dominant technology.” He said there will still be matters involving carriers and consumers that will need regulatory decisions, and said he expects a continuing need for regulation at both the federal and state levels. Jim Casserly, cable consultant with Willkie, Farr & Gallagher, said the future market will be driven by customers “who want their content at any time, in any place, in any form, from any one who has it.” He said most predictions in 1995 that looked at telecom 10 years ahead missed companies like Google and eBay, instant messaging, music downloading and cellphone video. Bruce Mehlman of the Internet Innovation Alliance said the 3 biggest areas for growth and innovation in telecom are health care, education and entertainment. He said these areas offer the most potential for developing “killer applications” that every telecom user will want or need to have.

Earlier Wed., speakers on a NARUC panel addressing the FCC’s recent wireline broadband order Wed. generally saw it as positive. Jack Zinman, federal regulatory attorney with SBC Services, called the FCC wireline broadband order “a welcome event” that got rid of the old common carrier Computer Inquiry rules. “The FCC recognized this is a different world,” where companies should be free to compete head-to-head. He said the FCC shouldn’t step back into broadband regulation unless there’s market failure and then only as much as needed to address the failure. Michael Schooler, NCTA deputy gen. counsel, said the FCC order affirmed that “like services should be treated alike.” He said the FCC got rid of burdensome economic regulation of broadband, while leaving open the possibility of “social responsibility regulation” in areas such as 911, universal service and customer privacy. He said there may be need for “prophylactic regulation” relating to social responsibilities of providers but markets should first be given a chance to work.

Dave Baker, EarthLink public policy vp, said the order should promote competition against the incumbent broadband duopoly of cable and phone companies and spur infrastructure investment. But all outlooks weren’t positive. Jason Oxman, senior external affairs vp for CompTel, said the order is “a very dangerous decision” for providers and consumers: “The FCC reversed decades of regulation and jurisprudence by stripping itself and the states of authority over broadband, putting the Bells’ broadband out of regulatory reach.” He said the order took away federal and state regulatory authority over broadband disability access, customer account privacy, slamming and cramming, numbering administration and market exit and entry. He said FCC assertions of power to impose broadband social responsibility regulation, if needed, under its ancillary jurisdiction “begs the question: Ancillary to what?”

Jeff Citron, Vonage CEO, said the FCC broadband order will help speed broadband rollouts and secure consumers’ rights to use any device, unfettered by regulation. But in a departure from Vonage’s past stance against regulation, Citron acknowledged to a questioner that there may be a place for regulatory involvement in broadband. He cited Vonage’s problems in some states with obtaining access to 911 selective routing systems essential for E- 911 service. “The marketplace is failing in E-911 service, so regulatory intervention is required.”

Meanwhile, the NARUC board approved the 2 broadband resolutions passed by the Telecom Committee. The first urges states and consumer interests to file comments with the FCC by Jan. 17 in the FCC docket addressing whether to apply to broadband information services any consumer protection provisions developed for common carrier telephone services relating to privacy, slamming, billing, service quality, facilities, rate averaging, regulatory involvement and enforcement. The resolution had been stripped of language expressing specific NARUC consumer protection concerns, but no one on the board made an issue of the deletions.

The 2nd adopted resolution commended the FCC in its rulemaking for “recognizing and affirming the states’ interest in ensuring consumer protection and public safety goals are met.” The FCC also drew praise for seeking comment on a NARUC proposal in its July “Federalism in Telecom” white paper that federal and state jurisdiction over broadband consumer protection should be determined along functional lines that take advantage of each jurisdiction’s respective experiences and expertise.

The NARUC Telecom Committee launched a new policy subgroup on video franchising to study the issue and file a report at the NARUC winter meeting in Washington. “Video franchising reform has gotten a lot of attention this year,” said Telecom Committee Chmn. Tony Clark. “We haven’t taken a stand but we need to analyze this to see if NARUC needs to take some position.”

NARUC elected Ia. regulator Diane Muns to a full term as NARUC president. Muns had been first vp but took over the presidency in April after Marilyn Showalter had to resign because she wasn’t reappointed to the Wash. state commission. The group elected Comr. James Kerr of N.C. to a full term as first vp. Kerr rose to the first vp position in April, succeeding Muns in the post. Comr. Marsha Smith of the Ida. PUC was elected 2nd vp.