Saturday, August 27, 2016

Legacy telcos want out from under FCC's Title II universal service requirement -- for both voice phone and Internet

CenturyLink, heir to old Bell system, wants to be freed from state oversight - CenturyLink’s petition is a “first-of-its kind request in Minnesota to deregulate basic local phone service following legislation enacted by the Minnesota Legislature in 2016,” according to a PUC filing by the state attorney general’s office. “The company’s request is premised on the alleged existence of adequate alternative means of communication,” the filing said. “Significant questions remain as to the existence of those alternatives on a universal basis — e.g. in all homes, in all parts of the state, etc.” 

The dominant telephone and cable companies dislike the U.S. Federal Communications Commission's Open Internet rules issued in 2015 that reclassified Internet as a telecommunications utility subject to universal service and anti-redlining requirements under Title II of the Communications Act of 1934. For now, however, it appears they have little to complain about in practical terms given the FCC's lack of enforcement of the regulation. The regulatory agency's posture is if a customer orders Internet service and is denied it and complains, we'll just look the other way.

An emerging question is whether the FCC and state public utility commissions will take the same position on telephone service. Legacy telephone companies like CenturyLink also don't want to comply with the longstanding Title II universal service mandate requiring voice telephone service be provided to all customer premises in their service territories that order it.

For both voice and Internet service, the reason for the resistance is the same. It would require investing billions of dollars on fiber to the premise infrastructure to replace old metallic outside plant -- billions the legacy providers lack. Ditto newcomers like Google Fiber. There just isn't adequate economic capacity among investor owned providers to address America's telecommunications infrastructure deficit.

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