Comcast’s Very Scary PSTN Filing

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I’ve been sorting through the various filings at the FCC in the Phone Network to IP transition docket. I single out the 7-page filing by Comcast as the filing that scares the absolute bejeebers out of me.

Why? Because everyone else – no matter what their financial interest or political alignment – paid lip service to the idea that we ought to have at least some kind of regulation. Whether it’s a general nod to a “minimal and light touch regulatory regime” or a specific shopping list, the vast majority of commenters recognized that when you have something as big, complicated and utterly essential to people’s lives as the phone system, you need some kind of basic backstop for people to feel comfortable and to address problems that will invariably come up.

Even AT&T has made it utterly clear that it does not see the future of phone service as a regulation-free zone. Even staunch free market conservatives such as TechFreedom and Free State Foundation acknowledge that, as a practical matter, there is going to need to be some set of rules – even if they hope to keep these rules to what they regard as the barest minimum necessary.

Comcast, and Comcast alone, suggests otherwise. Comcast alone thinks we can manage the phone system as the Libertarian Nirvana. This smacks either of unbelievable hubris (“we’re so big everyone will have to deal with us – what could go wrong?) or an incredible sense of market power (“we’re so big everyone will have to deal with us – heh heh heh”). Either way, this sends chills down my spine, because both signal loud and clear that Comcast – one of the largest providers of residential phone service in the United States, the largest residential broadband provider, and the single most powerful entity in U.S. telecom policy – simply doesn’t get it when it comes to the future of the phone system.

The thing that everyone else recognizes, and Comcast apparently still doesn’t, is that this has to work for everyone, including places Comcast doesn’t serve and doesn’t want to serve. It’s sad that Smalltown America doesn’t have broadband, unless they can find a convenient McDonalds or Starbucks.

Without broadband, these places miss out on our digital future. But if their phone connection stops working, they crash and burn now. We depend on the phone for 9-1-1 access, for human contact, for essentials of commerce so deeply embedded in our economy that we don’t even think about the possibility of it going wrong. And because this is a network, what gets screwed up elsewhere will eventually get screwed up for Comcast.

The expectation in the phone system is that it is fundamentally reliable, and that the thousands upon thousands of transactions and agreements take place against a background of regulation and well-established precedent. Comcast apparently believes you can totally upend that system and have it work just fine – at least for Comcast. 

We Already Have Problems

Unfortunately, we already have problems. Last week, the FCC released a Notice of Proposed Rulemaking on Rural Call Completion. Odds are good that if you are not one of the small percentage of Americans impacted by this issue, you have never heard of the “rural call completion problem.”

To provide the short version – as a result of the IP transition, the phone network is starting to unravel at the edges. Calls from urban areas to rural areas are increasingly not going through. Somewhere in the routing of IP packets and translation of this to the traditional TDM-telephone technology, enough latency and packet loss slips in so that calls stop working.

The FCC thought it knew the cause of the problem, something called ‘least cost routing,’ and addressed it in 2012. But it turned out that didn’t solve the problem and the FCC discovered it had no friggin’ idea why the phone system was starting to unravel at the edges, or how to stop it.

The FCC responded, rather sensibly and unanimously, by proposing reporting requirements that would allow the FCC to trace how calls get routed and figure out the problem. The FCC also made it clear that it would order providers to make sure calls go through to rural areas, and that the most onerous reporting requirements would phase out as phone service to rural areas became more reliable again. This proposal got a 5-0 vote, with even the Republican Commissioners noting that making sure that calls go through everywhere in the country is absolutely at the core of the FCC’s responsibility.

In the world that Comcast envisions, however, the FCC would do absolutely nothing – because it would not have any authority to deal with the rural call completion problem. Not because Comcast is necessarily causing the problem, or because Comcast hates rural people. Heck, all things being equal, I’m sure Comcast would love to see rural folks get all their calls. But it’s not Comcast’s problem, so Comcast  doesn’t really care (certainly not enough to incur any additional expense or acknowledge any FCC authority). Comcast’s footprint is entirely urban/suburban. Sure, some small percentage of Comcast customers get frustrated when they can’t call a bed & breakfast in a small town in Vermont or can’t call home to Smalltown, TX (population 150) on Mother’s Day. But that is such a tiny portion of their overall call volume that Comcast doesn’t even notice.

By contrast, actually keeping records on call routing is a very big deal to Comcast. It’s not really the money and inconvenience (although obviously Comcast would rather not spend the money or be bothered so it can complete 5-10 calls to Smalltown a month). Comcast’s big worry is that this means regulating voice-over-IP, which uses Internet protocols, and therefore such a regulation is perilously close to – gasp! – regulating the internet! Imagine if we blew away the magic IP pixie dust that repels regulators and made IP just one more technology for moving voice around? From Comcast’s perspective, that cannot be good. Ever.

So as between making sure folks in rural America get reliable phone service versus acknowledging the FCC needs to retain some authority over the IP-phone network, the rational Comcast reaction is: “Sorry rural America, we regard you as acceptable collateral damage to keep us regulation free.”

Nor does this end at rural America. The problem is (assuming we don’t care about rural America), this is a network. The problems are going to continue to proliferate. By the time even Comcast is willing to admit that something might go wrong, we will have the telecom equivalent of the subprime loan meltdown. Frankly, I’d rather avoid that – but I understand why Comcast thinks it’s worth the risk.

Why Do We Care What Comcast Thinks?

So if Comcast is the lone, whacky outsider, why do we care what Comcast thinks, especially at this early stage?

Let me start with why I personally find this so scary. My nightmare scenario is Comcast decides it won’t interconnect with someone unless it gets paid what it thinks access to its 10 million voice subscribers is worth – because that’s how things are done in the cable world. But this isn’t the cable world, where Comcast holding up Viacom over carriage rights can mean I miss The Daily Show for a while.

If Comcast holds up Frontier or AT&T Wireless, it means millions of people can’t call home, can’t call their businesses, and potentially can’t call 9-1-1. That’s not an inconvenience, that is a disaster.

Comcast needs to acknowledge that we need some kind of oversight so that phone calls to rural America go through, consumers can still count on their phone calls staying private, and the network bloody well works reliably and consistently.

Because whether it’s merely hubris or an actual intent to exploit its market power, the sad truth is that Comcast is the one company big enough to totally crash the U.S. communication networks through unilateral action of its own. Comcast is not simply too big to fail, it’s in a special regulatory category all its own called “too big to be allowed to screw up.”

The fact that Comcast can blithely start a proceeding of this magnitude and importance by essentially saying “we’re so big we’ll always be better off with no rules” is probably the best argument for making sure the FCC has the authority to deal with the inevitable disaster this kind of arrogance causes.

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