Archaic Telecom

ITExpo Regulatory 2.0: Shoot All the Lawyers

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There was one part of ITExpo I was able to attend remotely.

The Regulatory 2.0 sub-conference at ITExpo is an under-appreciated gathering of lawyers, FCC observers, engineers, and legally-savvy telecom entrepreneurs, who all had definite viewpoints on net neutrality and other regulatory matters.

Thank you Rich Tehrani and TMC (the organizers of ITExpo) for live-streaming the panel discussions of this “co-located” event to the millions of policy wonks who care about section 706 authority. 😉

Not knowing what to expect, I tuned into the “If Engineers Wrote the Rules” chat. It was less than an hour, but I thought someone on this panel would suggest how the telecom rules should be organized in a more logical, Spock-like way.

Other than wanting to remove lawyers with great prejudice from the FCC, the only policy recommendation offered was less rules.

While I didn’t agree with many statements coming from the panel, which included Richard Shockey, co-author of the SIP RFC and now board chairman of the SIP Fourm, it was a stimulating discussion and I learned a few things.

I quickly understood that none of the If Engineers … speakers were happy with the current division of telecom law into vertical silos.

So when the question was raised whether we’ll be able to talk about just The Internet—i.e., rather than cable broadband, wireless broadband, DSL, etc.— no one had any hopeful news. Margin note: Hey, guys how about a hat tip to Columbia University’s Tim Wu and his middle-ground “layers” approach. Just a thought.

A good deal of the discussion centered around some of the ugly arbitrage schemes that local exchange carriers (mostly rural) have entered into with semi-legitimate businesses (intimate talk conference calls) in which access fees are split.

This gaming of the FCC’s call termination payment system goes under the name “traffic pumping” or “access stimulation”, and has been covered even in main steam publications, as well as this blog.

Dave Frankel, CEO of ZipDX, a for-pay conference call service, was the chief grouch on the FCC-ruining-everything point. His gripe was that because of the Intercall ruling by the FCC in 2008, conference call companies like his are considered telecom providers, not end-users, which now have to chip into the Universal Service Fund based on the FCC’s operator formula.

And don’t get him started on the FCC mileage based compensation schedules used by local carriers, or Google Voice’s messy call paths, or Skype’s support of toll-free calling.

In my mind, the bigger point behind the anti-rules, anti-tax mindset of these engineers is finding a model that will support universal broadband service, which includes serving unprofitable areas. The USF’s  higher payments to rural LECs was an attempt to do this. But at this point, the fund has now entered the crazy-aunt-living-in-the attic territory.

In their National Broadand Plan, the FCC has proposed to reform the USF, steering monies to rural broadband, rather than maintaining bronze-age class five voice switching computers.

I get it: the regulated POTS has inefficiencies, the FCC is clueless at times, and engineers have solutions.

What I didn’t hear from Shockey, Frankel, and lawyer-engineer Todd Daubert is how to unleash innovation in the context of a less than competitive  marketplace and one in which market forces have not been keen to serve low-density or low-income areas.

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2 Comments

  1. David Frankel

    Thanks for watching and commenting!

    I’m sorry you didn’t feel there was much constructive out of our panel. To put it in the context of your challenge (“how to unleash innovation in the context …”):

    I think the issues that we presented and you summarized are HUGE barriers to innovation, so the mantra about less regulation (and thus less administrative burden, less convolution of routing and peering schemes, etc.) really is meant to foster innovation (if you can “foster” something by NOT doing something else!).

    I believe everybody on the panel is supportive of serving low-density & low-income areas. But that challenge needs to be recognized for what it is, at least in part: a SOCIAL issue. None of us have a technological (or regulatory) magic wand we can wave that will deliver a simple and cheap solution.

    Given the (general but perhaps not universal) perception that society benefits from getting those areas served, we should do so with an EXPLICIT subsidy (we did mention vouchers). I think you heard us talk about “ideally” funding such a program out of general revenues, but since that’s “politically infeasible” the next best thing is an “assessment” on layer-1 connections.

    Keep it simple and transparent. DO NOT contort the entire “system” with obscure and hidden payments and complex “jurisdictional” partitioning. It doesn’t make sense for some guy building a Voice-to-Twitter app to have to worry about how we get broadband to the badlands of South Dakota.

  2. Editor-one

    Thanks for responding. Your points are taken. I didn’t mention the voucher idea, which was brought up and is a policy recommendation, though perhaps not a viable one today. Simplification of intercarrier compensation rates –as in making them uniform– was another. All good.

    The FCC, in their National Broadband Plan, is in harmony with ICC and USF reform, and even addressed direct support of broadband projects. The FCC has been sketchy on some of the details in the Plan.

    But as luck would have it, Mr. G is supposed to announce a new program today for USF rule changes and a new $8 billion plan for rural broadband. (see http://www.nytimes.com/2011/02/07/business/07fcc.html?_r=1&ref=technology) There may be some good signs, as reported, in terms of phasing out of the current ICC schedules.

    In writing this comment I took a closer look at the FCC’s Intercall Order, which you brought up during the session. I don’t agree with Intercall. It’s a symptom of a regulatory agency that’s struggling to maintain superficial consistency, building a paper trail that will help them in some future order or law suit. It’s hard to reconcile that audio conferencing services are in very general way “telecommunications” with the fact that cable modem, in a very narrow way, isn’t. 😉

    I did truly enjoy the discussion. I am a big fan of voice conferencing services and hope this industry segment will continue to thrive and innovate.

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