Strategies to promote advanced telecommunications capabilities.

• Author: Rowe, Bob

1. INTRODUCTION

   "[Section 706 of the 1996 Telecommunications Act] is an invitation to `grab the brass ring' of new technology and should not be used simply as an opportunity to pick the low level fruit."(1) Section 706 of the 1996 Telecommunications Act (Act)(2) directs both the Federal Communications Commission (FCC) and state public utility commissions (PUCs) to encourage deployment of advanced telecommunications capabilities (ATCs) "on a reasonable and timely basis ... to all Americans."(3) Section 706 focuses on strategies that promote competition and remove barriers to infrastructure investment. It rigorously defines ATCs as capable of providing switched two-way voice, data, and video service.(4)

   Section 706 must be understood on its own terms and within the context of the purpose and structure of the Act. The House Conference Report states that the purpose of the Act is "to provide for a procompetitive [sic], de-regulatory [sic] national policy framework designed to accelerate rapidly private sector deployment of advanced telecommunications and information technologies and services to all Americans by opening all telecommunications markets to competition, and for other purposes."(5)

   Part II of this Article provides a brief background on section 706 efforts to date and notes the tendency to see broadband deployment issues as an extension of preexisting interindustry disputes. Part III suggests that promoting ATC deployment is a more complex matter than it may appear at first. Many ATC issues are primarily loop issues regarding which state commissions--and even local communities--have particular expertise and concern. Part IV describes the interests of state government in ATCs and methods various states use to promote them. Part V proposes a strategy for advancing Congress's goals in section 706 that would take advantage of various parties' strengths and should minimize the delay occasioned by interindustry disputatiousness and political wrangling.

2. SECTION 706 IS A CALL FOR ACTION, NOT AN INVITATION FOR ARGUMENT

   The FCC has considered section 706 in several proceedings, including the assessment required by section 706(b), and in action on petitions filed under section 706.(6) In its report on broadband deployment, the FCC concluded that deployment was progressing reasonably, but that the FCC would continue to pay attention to the matter and promote deployment.(7) Specifically, the FCC noted:

   We certainly have not reached the ultimate goal that all Americans have meaningful access to advanced telecommunications services. Indeed, at such an early stage of deployment of many broadband services, it is difficult to reach any firm judgment about the state of deployment. Nonetheless, we are encouraged that deployment of advanced telecommunications generally appears, at present, reasonable and timely. We base this conclusion, in part, on the large investments in broadband technologies that numerous companies in the communications industry are making. We expect that these investments will lead, in the near future, to greater competition in the broadband market and to greater deployment of these services in a manner that is more efficient and includes all Americans.(8) The report was greeted with some disappointment by rural advocates and others.(9)

   In 1998, the FCC tentatively rejected requests that digital subscriber loop (DSL) facilities be exempted from unbundling requirements, unless those facilities are operated by a separate data subsidiary.(10) On remand from the Supreme Court,(11) in November 1999, the FCC determined that incumbent LECs are not required to unbundle packet switching like DSL service at this time, except in a limited circumstances.(12) The states or the FCC may still require unbundling if they make other findings. Subsequently, the FCC did, however, require the incumbent LECs to "unbundle the high frequency portion of the loop" even where the incumbent LEC's voice customer is served by digital loop carrier facilities.(13) This means that a CLEC that wishes to provide DSL service does not incur the expense of purchasing the entire subscriber loop to provide DSL service.

   Concurrently, the National Telecommunications and Information Agency (NTIA) is developing information on penetration to retail customers of telephone service, computer ownership, and Internet access through modems.(14) The most recent study shows increasing penetration overall but dramatic disparities based on income, ethnicity, and location. Rural households at all income levels are less likely to have Intemet access than are urban counterparts. The report also shows a widening gap in home Internet access between Caucasian and African American households. The report includes a variety of recommendations, including support for community access centers.(15) Congress has also closely followed ATC deployment and access through oversight hearings(16) and through legislation which would take a variety of approaches to promoting more rapid deployment of broadband technology.(17)

   To date, many of the proposals have become enmeshed in preexisting interindustry battles, legal disputes, and more general policy debates. Among the combatants are Bell Operating Companies (BOCs) seeking partial relief from section 271 requirements for data services,(18) cable companies opposing cable unbundling or the imposition of common carrier requirements on their networks,(19) and competitive local providers opposing further regulatory relief for the large incumbents.(20) Sometimes lost in the cacophony of advocacy are the small rural providers--cooperatives and privately-owned companies--which often have compelling stories to tell about the advanced services they are providing or hope to provide.(21) Meanwhile, consumer advocates are reminding us not to forget about the large number of customers who still want only fairly-priced "Plain Old Telephone Service"(22) and low-volume long-distance.(23)

   The debate is illuminating. It focuses attention on broadband access and helps to sharpen issues. Thus far, however, it does not appear to have resulted in additional deployment. An outcome-oriented strategy focusing on solving specific problems is required. That strategy would, among other things, be based on a clear understanding of real conditions and needs "on the ground." It would draw on coordinated federal, state, private, and public resources. It would recognize the relationship between ATCs, universal service, and competition issues. In many instances, such a strategy would be able to advance deployment without being ambushed in other battles in the ongoing "Telewars."

3. ATC ISSUES LOOK DIFFERENT FROM ROUTE 66 THAN FROM THE BELTWAY

   Advanced technology needs will vary from location to location, customer to customer, and from one portion of the network to another. The following questions are suggested by extensive discussions with providers and customers and by review of various facilities maps and plans.

   1. Physical Layers of the Network

      Networks can be thought of in terms of layers. Telecommunications networks are generally divided into transport, switch, and loop. A layered understanding may be useful for other purposes as well, such as sorting through the complex jurisdictional separations process(24) or rethinking the particular question of reciprocal compensation for Internet Service Providers (ISPs).(25)

      First, it is important to distinguish cost barriers to using existing facilities from the physical unavailability of the facilities. If the issue is the transport or backhaul(26) cost for gaining access to an existing network one set of strategies might be appropriate, such as pricing without a backhaul charge or providing support for backhaul charges.(27) Second, it is necessary to know with some granularity what facilities exist, their capacity and interoperability. There may be particular needs in each layer of the network, transport, switch, or loop.

      Driving the Beltway instead of Route 66, it is easy to miss much of the work that has been done. It is important to identify the placement and capacity of BOC or national interexchange carrier networks and to maximize opportunities to use those networks.(28) However, this is only part of the story. A complete picture will include transport networks constructed by aggressive regional carriers such as Touch America, based in Butte, Montana.(29) It will also include the innovative work being done by many telephone cooperatives and other small rural carriers. Continuing with the Montana example, this state's telephone cooperatives and independent phone companies operate the Montana Advanced Information Network (MAIN),(30) which provides high-capacity transport to many parts of rural Montana. Vision Net, formed by five rural telephone cooperatives, operates over ninety interactive video sites, including state and tribal colleges.(31)

      Based on a concrete understanding of existing networks, high-end transport needs may appear both more complex and yet more solvable. Where are the specific gaps in the current "network of networks?" Do particular customers (or would-be customers) have needs they cannot meet? There is extensive fiber deployed, including substantial deployment in many rural areas. However, there are significant gaps in that network, leaving particular areas without the access needed and no economically feasible way to obtain it.

      A recent dispute concerned whether certain areas lacked Internet hubs, the so-called "on-ramps" to the Internet. A report prepared for the Internet advocacy group iAdvance identified twelve states which lagged significantly in the number of hubs deployed.(32) The presence of hubs was said to confer speed and cost benefits. The presence of redundant hubs was said to provide essential reliability.

      Switch issues include general upgrades where those have not occurred, software compatibility, and collocation and provisioning for competitive providers...